YSR presses for differential interest rate for farmers

Hyderabad, July 3 (UNI) Andhra Pradesh Chief Minister Y S Rajasekhara Reddy today urged bankers to lend farmers and poor people in rural areas at a differential rate of four per cent interest to rescue the farm sector from deep crisis.

Welcoming the 'pro-peasant' policies of the United Progressive Alliance (UPA) government at the centre, he said if banks were not in a position to provide the same, the centre should bear the cost of subsidising credit to farmers, who accounted for 63 per cent of the country's population but shared among themselves 20 per of the Gross Domestic Product(GDP).

Inaugurating a seminar on agriculture credit organised by the National Bank for Agriculture and Rural Development (NABARD) here, he said reduction in interest rate for the farm sector to nine per cent and then seven per cent by the Union Government was not enough to overcome the crisis in the farm sector.

Farmers, a majority of them small and marginal, should be provided credit at a low rate of interest to prevent incidence of suicides by farmers, he pointed out.

Observing that 30 to 40 per cent of the GDP was being ploughed back as subsidies to the agriculture sector in developed countries, Dr Reddy said only when farmers and others in rural areas were provided differential rate of interest, the goal of stepping up of growth in the agriculture sector from a low two per cent of GDP to the present 3.6 per cent could be achieved during the 11th plan period.

NABARD Chairman Y S P Thorat said the bank had designed package for distress districts through appropriate farming systems, including tree-based farming and associated livelihoods such as dairying.

Lamenting that only 26 per cent of farmers had access to institutional credit despite introduction of Kisan Credit Card and other schemes, he said the bank was in the process of building capacity among rural banks and pioneer initiatives such as business facilitator/correspondent banking models and adoption of information technology such as biometric cards in rural banking.

UNI