Nabard ups K'taka credit potential by 26%

The National Bank for Agriculture and Rural Development (Nabard) has estimated a credit flow of Rs 85,724.58 crore under the priority sector in Karnataka for 2014-15, an increase of 26 per cent over the projections for 2013-14.

According to the State Focus Paper, released by Nabard here on Friday, Karnataka is one of the leading states in the development of agriculture with a focused attention on dryland farming through the watershed approach such as Sujala, improving dryland productivity through the award-winning Bhoo Chetana programme among others.

"There is a huge potential for banks to lend to the priority sector like dryland farming and plantation crops like coffee, arecanut, pepper, cardamom among others. The banks, especially, need to look at issues like the decline in area under Arabica coffee, arecanut, which is affected by the yellow leaf disease. There is a need to work out a proper marketing platform for the farm produce," said GR Chintala, chief general manager, Nabard.

Broad sector-wise projects for 2014-15 include crop production, maintenance and marketing (Rs 39,246.07 crore; term investment for agriculture and allied activities (Rs 17,990.16 crore); MSME sector including food and agro-processing (Rs 8,411.41 crore) and other priority sectors (Rs 20,076.94 crore).

He said Karnataka was in the forefront while securing funds from Nabard for producers' cooperatives. Till now, Nabard has extended Rs 39 crore as credit to these cooperatives. There is a need to help these cooperatives to grow from being single-product suppliers to multi-product suppliers by adding things like farm equipment, he said.

Karnataka produces 70 per cent of India's coffee, 48 per cent of silk and ranks first in the production of raw silk, second in milk production, third in sugarcane production and fourth in production of flowers. The state is also a leading producer of coarse cereals and millets such as ragi, bajra, jowar that provide nutritional security, Nabard said in a statement.

Chintala said Nabard had identified several critical infrastructure gaps in Karnataka at the district level and if these gaps are bridged the state could increase its productivity manifold. Nabard has set a target to increase the farm sector's productivity from Rs 28,000 per hectare to Rs 30,000 per hectare in 2014-15, he said.

Some of the critical infrastructure gaps identified by Nabard include floriculture (polyhouses, green houses, auction centres and marketing infrastructure), dry land farming (water conservation, rain water harvesting, watershed development).