The Bihar government should bear the 4 per cent interest rate on crop loans to ensure farmers who repay timely get interest-free loans, Union Agriculture Minister Radha Mohan Singh said today.
Under the interest subvention scheme, farmers get short-term loans of up to Rs 3 lakh for a period of one year at an interest rate of 7 per cent. Those repaying on time get the loan at 4 per cent.
“Singh today called on Government of Bihar to bear the 4 per cent interest on loan to farmers so that they can get loans at zero percent interest,” said a statement issued by the Agriculture Ministry.
At present, farmers in Bihar get crop loan at 7 per cent interest rate, of which 3 per cent is borne by the central government, he said.
The Minister was addressing a conference organised by Indian National Cooperative Union in Motihari in East Champaran.
On cooperatives, the Minister said that the Primary Agriculture Cooperative Societies (PACS) are the fundamental base for the development of agriculture.
“There must be a provision of reservation in PACs to ensure partnership of weaker section of the society like scheduled castes, scheduled tribes, backward class and most backward classes,” he said.
He stressed on bringing institutional improvement to develop the PACS in the form of development centre of rural economy. Through these PACS, farmers are provided seeds, fertilizers, agri-equipment along with short term loan.
The attempts are on to computerize all 8463 PACS in Bihar. “This programme will cost almost Rs 2000 crore. 50 per cent of which would be borne by the central government through NABARD,” he added.