The Reserve Bank of India should release a sector-wise break-up of agricultural credit, experts said on Thursday, stating that this would help result in a more productive use of the funds for the sector. Currently, about 70% of the farm credit, according to RBI data, are crop loans, while there is no disaggregated data on what the balance amount is used for.
Sector analysts fear that the credit disbursed to the MSME sector and micro-finance institutions may be getting categorised under “agriculture credit”. They are of the view that there should be a better monitoring system to ensure that these funds really are used in the farm sector.
The government had exceeded the agriculture credit target of Rs 10 lakh crore for 2017-18, of which about Rs 6.5 lakh crore were disbursed to farmers under crop loans which carry lower interest rates, former agriculture secretary Siraj Hussain said.
While the remaining credit amounts were disbursed as term loan, which do not entail any subsidised interest, the RBI doesn’t release the list of beneficiaries, he said at a conference — Food Systems Dialogues — organised by Bharat Krishak Samaj here.
Nabard chairman Harsh Kumar Bhanwala said: “Credit flow monitoring is very important as investment in the agriculture sector is not much despite the interest subvention.” Monitoring will help in more productive use of the agricultural loan, he added.
Bhanwala also said the farmers producers’ organisations (FPOs) need an anchor agency on the lines of the National Dairy Development Board.
Speaking on connecting farmers to value chain, noted agriculture economist and former chairman of Commission for Agricultural Costs and Prices (CACP) Ashok Gulati said there is massive investment required in marketing infrastructure since the value chain of each product, like grain and milk for example, is different. He further said farmers need to grow what the consumer is looking for whereas the current practice is to grow a crop and then look for the market.