Farm loans at 4 pc; credit target raised to Rs 4,75,000 cr

New Delhi, Feb 28 (PTI) In a bonanza to the farmingcommunity, the government today announced loans at interestrate of four per cent -- three per cent less than market rate-- for farmers who pay their dues in time and raised thecredit target for farm sector by Rs 1 lakh crore.

"The existing interest subvention scheme of providingshort-term crop loans at seven per cent interest rate willcontinue during the 2011-12 fiscal," Finance Minister PranabMukherjee said in Budget proposal

He also said the credit target for the agriculture sectorhas been increased by Rs one lakh crore to Rs 4,75,000 crore.

Also, banks have been asked to focus on farm credit lending tosmall and marginal farmers, he added.

"In the last Budget, I had provided an additional twoper cent interest subvention to those farmers who repay theircrop loan on time. In order to provide further incentive tothese farmers, I propose to enhance the additional subventionto three per cent in 2011-12. The effective rate of interestfor such farmers would be four per cent," he said.

Faced with high food inflation and the country''sdependence on import of pulses and edible oil, the FinanceMinister also announced various schemes for promotingproduction of vegetables, pulses, oilseeds, fodder andnutrition-rich crops like millets and maize.