Hyderabad: The Central Government under the Rs 20 lakh crore Atmanirbhar Bharat Abhiyan Package has announced various steps to support the struggling farming sector.
Besides agricultural marketing reforms, emphasis was on improving institutional credit support to farmers. As already indicated by the Government, NABARD is set to play a key role in this initiative.
Against this backdrop, Eenadu spoke to NABARD Chairman Chintala Govinda Raju to know about the bank's role in addressing problems faced by the farming community.
Excerpts from the interview -
1. The Central Government has decided to extend additional refinance support of Rs 30,000 crore to NABARD as part of COVID-19 economic package. What are your plans to channelize these resources to farmers?
The Union Finance Minister in her economic package announcement indicated that NABARD would provide Rs 30,000 crore in addition to the normal lending of Rs 90,000 crore during the current year to support cooperative and Regional Rural Banks (RRBs) in meeting credit demands of farmers during the pre monsoon and Kharif operations.
Out of Rs 25,000 crore already allocated by RBI under Special Liquidity facility, NABARD has disbursed Rs 22,977 crore to credit institutions at various levels.
These funds will augment banks' resources in financing to farmers and to tackle liquidity crunch due to Covid-19 pandemic.
2. Tenant farmers are facing problems in availing loans from banks. How is NABARD addressing this problem?
We are aware of the fact that banks are not able to extend loans to tenants which is due to prevalence of informal tenancy.
To overcome this problem, NABARD launched a programme to promote Joint Liability Groups (JLGs) as a strategic intervention for providing collateral free credit to tenant farmers and oral lessees.
During 2019-20, 41.80 lakh JLGs were promoted and financed by banks. Cumulatively, an amount of Rs 1,54,853.10 crore has been disbursed for promotion and financing of 92.56 lakh JLGs since inception.
3. Small and Marginal farmers dominate the Indian agriculture. Does NABARD aim to bring modern technology to these farmers?
NABARD has promoted 4,450 Farmers Producer Organizations (FPOs) across the country. Around 80% of the shareholders of these FPOs are small and marginal farmers. NABARD is in the process to develop a dedicated portal for e-commerce to link these farmers directly with market players.
4. There is a criticism that NABARD is focusing more on improving its balance sheet and deviating from its core objectives. What is your comment?
Growth of the balance sheet, according to me, is incidental and has been growing simultaneously with our engagement with people.
Further, it has been well recognised the world over that only financially strong institutions can deliver what they are mandated for. It is the strength of our balance sheet that evokes confidence among our partners including governments.
NABARD has always focussed on the last mile delivery i.e. the ultimate beneficiaries (farmers/ artisans/rural entrepreneurs). A strong balance sheet has expanded our outreach in taking its developmental programmes across the length and breadth of this vast country.
5. Crop insurance is still an unfulfilled dream for our farmers. What are the plans of NABARD to overcome the challenges in this segment?
Many farmers do not have insurance coverage for their crops for various reasons, the main one that many surveys revealed was lack of awareness.
NABARD, being one of the promoters of National Agriculture Insurance Company of India Limited (NAIS) (with 30% share in its paid-up capital) has been facilitating coverage of farmers under crop insurance schemes by way of awareness building and coordination with Govt. of India in policy formulation.
Besides, we have tied-up with various grass-root organisations to educate the farmers on the benefits of insurance products like Pradhan Mantri Fasal Bima Yojana and encouraging them to enroll under the insurance schemes.
As regards extending the benefits of crop insurance to tenant farmers, sharecroppers, etc., NABARD is engaging with various State Govt. for providing land cultivation documents to enable them access the eligible financial services including the insurance cover.
6. In recent times, the focus of the government is on creating better agriculture market infrastructure. What is the role of NABARD in this?
The Central Government has instituted the Agri Marketing Infrastructure Fund in NABARD to support State Governments in developing around 10,000 Rural Haats to graduate into Gramin Agricultural Markets (GrAMS) so as to enable their linking with eNAM to facilitate remote transactions.
The role of marketing is to become the key enabler that takes the agriculture sector beyond the function of cultivation only, into the arena of business.
Similarly, under Food Processing Fund, NABARD has been supporting State Governments, State Government Corporations as well as private entities for creation of infrastructure for food and agro-processing industries.
7. Even when Farmer Produce Organisations (FPOs) can register under Cooperative Act, why is there an insistence on registering them under Companies Act? Will it not increase the compliance burden?
NABARD does not insist FPOs to register exclusively under Companies Act. FPOs promoted by NABARD are entitled to get themselves registered under any legal form.
However, till recently the benefit of Credit Guarantee Scheme and Equity Grant Support implemented by SFAC(Small Farmers’ Agribusiness Consortium) was available to FPOs registered under Companies Act only.
Hence there was preference to register FPOs under the Companies Act. The provision of the SFAC scheme has since been changed to include FPOs registered under Cooperative Act and financed by National Cooperative Development Corporation (NCDC)
8. A farmer is paying several charges while availing crop loans. How are you going to address this issue?
Individual banks decide the charges they levy on farmers’ loan accounts as part of their lending policy. However, NABARD has issued instructions to all rural cooperative banks and Regional Rural Banks to waive off all the miscellaneous charges on Kisan Credit Cards (KCCs) of upto Rs.3 lakh.
