FM for greater states' role in farm initiative

Soon after announcing a major package for the agricultural sector, the finance ministry today directed states to work out targets by June 30 to boost farm credit and provide debt relief to distressed farmers.

Finance Minister P Chidambaram wrote to the chief ministers of all states to implement the action plan announced on Friday, which included raising farm credit by 30 per cent to Rs 1,04,500 crore in this fiscal and a four-point strategy to restructure debts of distressed farmers considering that the new sowing season had already begun.

"The action plan involves a number of measures that can be effectively implemented only with the close cooperation of the state governments," he said.

The agriculture package, worked out with the Reserve Bank of India, National Agricultural Bank for Rural Development (Nabard) and Indian Banks Association last week, broadly envisages a 30 per cent higher credit flow to the farm sector in this fiscal, providing credit to 5 million new farmers and restructuring debts of farmers in distress.

Chidambaram said the main tasks required to be undertaken at the state, district and lower levels include the finalisation of operational targets in consultation with local offices of Nabard and banks in state and district level bankers' committee meetings.

The meetings must be held before June 30, 2004, he said. States should also assist banks in formulating new "bankable investment projects" like plantation, horticulture, fisheries, organic farming, agro-processing and other agriculture activities, he said.

Chidambaram asked states to furnish necessary certificates, documents to tenant farmers, oral lessees and share croppers to enable them to access bank credit.