The Commission for Agricultural Costs and Prices (CACP) has recommended to the Centre to extend interest subvention to non-crop agri loans to boost farmers' investment in technological upgradation.
"In a recent Niti Aayog meeting with the Prime Minister, we have recommended extending the benefit of interest subvention even for non-crop agri loans," CACP Chairman Vijay Paul Sharma said here today.
Speaking at Bharat Chamber of Commerce organised interactive session on emerging trends in agri-business, Sharma said there was no need to differentiate between crop and non-crop loans and hence had also recommended it to the Finance Ministry for the upcoming budget.
Government offers interest subvention of 3 per cent on crop loans, which accounts for 85 per cent of the total agricultural loans expected to touch Rs 9 lakh crore this fiscal, he said.
Justifying extension of interest subvention to non-crop loans, Sharma said "We felt offering interest subvention will encourage farmers to invest in technology and equipment for farming."
Government is targeting sustainable growth for agriculture which suffered in the recent past years. However, with good monsoon this season, the agri sector is expected to grow at 4 per cent.
Sharma said the Centre wants states which are engaged in decentralised procurement of agri produce under minimum support price mechanism to also cover storage and distribution.
West Bengal is among the states which procure paddy through decentralised system.
This will help states cover more farmers and have a more efficient distribution system than Food Corporation of India, Sharma said.
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