The Hindu : System soon to ensure ryots get soft loans

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Monday, Jul 28, 2003

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System soon to ensure ryots get soft loans

By Our Special Correspondent

Photo: Rajeev Bhatt

The Prime Minister, Atal Behari Vajpayee, being felicitated by the Union Minister for Agriculture, Rajnath Singh, at the former's residence in New Delhi on Sunday.

NEW DELHI JULY 27. A monitoring system will be set up to ensure that farmers get the direct benefit of lower interest rates on agricultural loans recently announced. There is a suggestion that on loans up to Rs. 2 lakhs the interest rate charged should not be much more than the prime lending rate, not more than 10 per cent, the Prime Minister, Atal Behari Vajpayee, said here today.

Addressing a group of farmers who had come to congratulate him for lowering the interest rates on loans, Mr. Vajpayee said they deserved congratulations for ensuring that India grew more than enough food to feed its population. The group was organised by the Bharatiya Kisan Morcha, a wing of the Bharatiya Janata Party, and present on the occasion were several Union Cabinet Ministers, Rajnath Singh, Sahib Singh Verma and Sharad Yadav.

Mr. Vajpayee was indirectly referring to complaints that often the farmer had to pay "commissions" to get the paper work cleared for loans and sometimes ended up paying as much as 18 per cent interest. It was in this context that he said a monitoring system should be set up.

The Government has so far distributed 3.13 crore kisan credit cards, spent Rs. 2,400 crores on subsidies to deal with the drought situation last year and distributed 88 lakh tonnes of grain free of cost. "Just as every drop of rain water is precious, so is every grain of food you produce... no one should die of hunger," Mr. Vajpayee said, even as he emphasised the need to pay more attention to proper storage of grain to prevent wastage.

A system of preserving food when put in place can work wonders as it has done in milk production taking the country to the top position in this area. He suggested that farmers should grow vegetables and fruits along with grain and get ready to take advantage of the demand abroad for all kinds of agricultural produce. The Government scheme for road connectivity, he hoped, would help them get their produce more quickly to the market place. Without proper marketing facilities in place, "more than 50 per cent of vegetable production in the country gets destroyed," Mr. Vajpayee said.

The Prime Minister did note that the cost of production of wheat and rice here was higher than abroad and our prices were not competitive in the international market. To that extent lower interest on credit should help and farmers should otherwise learn to lower costs by increasing productivity.

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