In a clear indication to the government?s resolve to scale up farm financing in a big way, the Union finance minister P Chidambaram said that the public sector banks have set a target to disburse R6 lakh crore as agriculture loan during the current fiscal. The banks which had collectively targeted to disburse R5.75 lakh crore have revised upwards the lending towards agriculture by around R25,000 crore.

Speaking at the inauguration of a new rural training centre at Amaravathipuram, Karaikudi, set up by Indian Bank, Indian Overseas Bank and Nabard, the finance minister said that in 2011-12, the farm lending target was at R4.75 lakh crore. Similarly in 2012-13, the target was set at R5.75 lakh crore and the banks have now raised it.

?Last week when I met the chairmen of the banks they said they will disburse R6 lakh crore in 2012-13 at 7% interest,? he said.

The interest rate will come down to 4% for farmers who pay the loan and interest on time and 60% farmers are charged 4% as they repay their loans on time.

In a bid to suggest means and ways to shore up farmers income, Chidambaram urged farmers to look at non-farming activities. He was of the view that agriculture has been becoming a tough job today and ryots can?t depend on it for the full year due to uncertainty of rain.

While speaking on the role of Rural Training Centres (RTC) in skilling farmers for non-farm based additional income generation activities, he said RTCs play a major role in providing training to farmers to undertake activities like poultry farming, dairy farming, sheep rearing, embroidery, tailoring, two-wheeler repair, mobile phone repair to supplement their farm income.

Underscoring the need to take up non farm income generation activities, he said that 60% of Indian population employed in farm sector face several challenges including depleting ground water, failure of monsoon leading to increasing operational costs. ?Big countries like India and China unlike small state like Singapore cannot meet their food requirements by imports and hence farmers should remain in farm sector for food production and further augment their income by resorting to non-farm activities,? he said.