Banks need to raise lending to farm sector: Agri Sec

Asserting that farmers are not known to let their loans turn into NPAs, Agriculture Secretary S K Pattanayak today urged banks to increase their exposure to the farm sector.

Amid rising Non-Performing Assets (NPAs) in the banking sector, mainly on account of corporate loan defaults, he regretted that banks are not coming forward to lend to Farmers Producer Organisations (FPOs) associated with the agriculture sector.

"One particular painful aspect is that credit to FPOs are not forthcoming. ...banks are themselves passing through a difficult time now. Still, I can say to banks' top echelons that farmers are not known to make their loan NPA. Please trust them. Please give them. They will strengthen you banks," Pattanayak said.

Observing that bankers are already fed up lending huge amount to few people, the Secretary said, "the time has come for them to knock the doors of farmers. I can assure that farmers will utilise the money".

Speaking at the launch of an e-portal for FPOs, he said that unless one or two banks show the way, others would not get encouraged.

He also expressed satisfaction about the fact that many banks in the recent past have shown interest in lending to the farm sector.

The Secretary complemented Bank of Baroda and SBI for signing a pact with Small Farmers Agri-Business Consortium (SFAC) on lending to FPOs in some states.

Currently, the government's SFAC provides equity grant and credit guarantee to empower FPOs. Each FPO has a group of 8,000 to 10,000 farmers and collectively decide what to grow and market the produce in bulk.

While noting that the e-portal launched by SFAC for FPOs is a simple electronic platform that would connect farmers and consumers, he said farmers are facing problems because they produce but someone else sells for them and therefore they don't get the right price.

"This platform will give them an opportunity to sell directly. The entire transfer of profit goes to farmers directly. This platform will help in augmenting income of farmers," he added.

The e-portal for FPOs is different from the government's e-NAM platform as it does not link farmers with consumers but to the wholesale markets, he said, and added that this opportunity should not be cornered by the big players.

Currently, there are 700-odd FPOs set up by SFAC and 2,000 FPOs by Nabard.

Niti Aayog member Ramesh Chand, SFAC Managing Director Sumanta Chaudhuri, SBI Chief General Manager Alok Kumar Choudhary were among others present at the launch of the portal.