As the country stares at a deficient monsoon for second straight year, the government has allowed the continuance of an interest subvention scheme, under which farmers get crop loans up to Rs 3 lakh at a subsidised rate of 7% per annum, in the current fiscal.
“The Cabinet has given its approval to the continuation of interest subvention to public sector banks, private sector commercial banks, regional rural banks, cooperative banks and Nabard to enable them to provide short-term crop loans of up to R3 lakh to farmers at 7% per annum during 2015-16,” said a source. It has also approved an additional interest subvention of 3% per annum for those farmers who repay on time (within one year of disbursement).
The decision comes as a relief to farmers as seasonal showers trailed the benchmark long-period average by 7% up to Tuesday. Wide-scale dry spell in central and southern India is the latest in a series of miseries for farmers, who were already struggling to recover from losses due to unseasonal rains in the last rabi season and a global commodity crash.
The government has also decided to provide interest subvention to small and marginal farmers with kisan credit cards for loans against negotiable warehouse receipts after harvest at an interest rate of 7% per annum for six months. It approved the expenditure of R18,110 crore as interest subvention for the current fiscal, of which R15,778 crore could go to public sector banks.
The Cabinet, chaired by Prime Minister Narendra Modi, also agreed to provide relief to farmers affected by natural calamities, where the interest subvention of 2% will continue to be available to banks for the first year on the restructured amount, said the source.
The government has raised the target of agriculture credit to R8,50,000 crore for the current fiscal from R8,00,000 crore in 2014-15.
No restriction on rice bran oil export
The Cabinet Committee on Economic Affairs has also allowed unrestricted exports of rice bran oil and organic edible oils. Since India imports around 60% of its annual edible oil requirements, the exports of such oils had been banned since March 2008. However, the govenrment later allowed the outbound shipment of only organic edible oils with a quantitative limit of 10,000 tonne a year.
Since the consumption of both rice bran and organic oils are limited in the domestic market, unrestricted exports of these items are unlikely to affect edible oil availability, sources said. They said the move to allow smooth exports of rice bran oil is also aimed at improving realisations of farmers growing paddy — the most important kharif crop — especially when the weather office has forecast a 12% drop in monsoon shower from the benchmark average. Rice bran is an oily layer in between the paddy husk and the white rice, out of which the oil is extracted.