Interest on cooperative crop loan slashed to 3%

Agriculture credit targeted at Rs 9,165 crore

The Orissa government has slashed the interest rate on agriculture loans in the cooperative sector from the existing five per cent to three per cent while continuing the two per cent interest subvention on farm credit.

The move is expected to encourage farmers across the state to take up large scale cultivation and ensure transparency. The state government has set a crop loan disbursal target of Rs 1600 crore in the cooperative sector in the current financial year.

“We have decided to allow the bonafide farmers to repay their loans at a nominal interest rate of three per cent. This will further encourage the farmers to take up cultivation on a bigger scale and ensure transparency”, said the state agriculture minister, Damodar Rout.

It may be noted that commercial banks lend to the farmers at an interest rate of seven per cent.

The ruling Biju Janata Dal (BJD) had promised to provide farm loans at 3 per cent interest rate in its election manifesto last year.

Meanwhile, the state government has set an ambitious agriculture credit target of Rs 9165 crore in 2010-11, which is a surge of 72.94 per cent over Rs 5300 crore in 2009-10.

The agriculture production in the state has been projected at 9.27 million tonnes for the current financial year. This includes 7.464 milllion tonnes in the kharif season and 1.813 million tonnes in the rabi season.

The projected production marks a 6.84 per cent growth over the production of 8.683 million tonnes in the agriculture season of the previous fiscal.

It may be noted that in 2009-10, the state government had fallen short of its foodgrains production target by 2.209 million tonnes.

As against the targeted 10.893 million tonnes, the actual production was 8.683 million tonnes. Barring Angul, Kalahandi and Rayagada which recorded surplus output, all other districts of the state fell short of the targeted production in the previous fiscal.

The highest production of foodgrains in the current financial year is set to come from Ganjam district in south Orissa where the production has been projected at 0.69 million tonnes, followed by Bargarh at 0.68 million tonnes, Mayurbhanj at 0.57 million tonnes and Nabarangpur at 0.55 million tonnes.