Karnataka plans farmer loans at one percent interest (Lead)

February 24th, 2011 - 7:46 pm ICT by IANS  

Bangalore, Feb 24 (IANS) In the first of its kind budget in the country for farmers, Karnataka Thursday proposed to give crop loans at one percent interest rate through cooperative credit institutions in the ensuing fiscal 2011-12.”Crop loan will be made available at one percent interest rate to farmers through cooperative credit institutions as against three percent interest rate hitherto,” Chief Minister B.S. Yeddyurappa told lawmakers in the assembly, presenting a separate budget for the agriculture sector.

The resilient farm sector in the state is projected to grow 5.5 percent this fiscal (2010-11), mainly owing to above normal monsoon, and the foodgrain production is expected to increase 14 percent over the last fiscal (2009-10), according to the state economic survey report released Wednesday.

“The difference of interest on account of reduction will be met by the state government, though crop loans up to Rs.50,000 from commercial banks will continue (to be given) at three percent,” the chief minister clarified.

Proclaiming to be a farmer’s son himself, Yeddyurappa proposed to allocate a whopping Rs.17,857 crore for the development of agriculture, allied and irrigation sectors in the new fiscal.

“(A total of) Rs.1,000 crore will be provided for the development of one million farmer families under ‘Suvarna Bhoomi Yojana’ (land enrichment programme),” he said.

Out of this, Rs.200 crore would be for organic farming; Rs.125 crore for promotion of bio-fuels; Rs.100 crore would be a subsidy for drip and sprinkler irrigation; and Rs.100 crore would be subsidy for farm equipment, Yeddyurappa said.

Noting that the proportion of population dependent on agriculture in the state declined to 61 percent from 70 percent over the years, the chief minister said the average size of land holdings reduced to 1.63 hectares in 2005-06 from 3.2 hectares in 1970-71.

“As a result, the share of agriculture in total employment has declined to 61 percent from 65 percent and its contribution to the gross state domestic product (GSDP) has plunged by half to 18 percent from 36 percent in the recent years,” Yeddyurappa said.

Admitting that achieving a 4.5 percent agriculture growth rate was not an easy task, the chief minister said the challenge was to double the growth rate during the 10th five-year plan.

“Reasons for deficiencies in the development of agriculture and allied sectors include lack of investment, absence of appropriate technology, (lack of) processing and marketing. Farmers do not get remunerative prices due to lack of grading facilities, warehousing, cold-storage, processing centres and marketing facilities,” Yeddyurappa said.

Highlighting measures proposed to be taken up in the ensuing fiscal to rejuvenate agriculture and its allied sectors, the chief minister said an agriculture infrastructure fund would be set up with Rs.500 crore corpus and an agriculture revolving fund of Rs.1,000 crore would also be created.

“(A total of) Rs.3,900 crore will be provided to supply power to irrigation pumpsets; Rs.1,000 crore for rejuvenating tanks and Rs.100 crore for regularising 100,000 unauthorised pumpsets,” Yeddyurappa asserted.

Declaring 2011-20 as “irrigation decade”, the chief minister announced that Rs.50,000 crore would be allocated for the irrigation sector in the coming years, with Rs.7,800 crore during the new fiscal.

“Children of farmers across the state will get interest-free loans to pursue higher education,” he said.

Of the 7.6 million farmer families across the state, including 75 percent small and marginal farmers, 882,000 belong to the Scheduled Castes (SC) and 439,000 to the Scheduled Tribes. (STs)

The budget also proposed incentives and sops for the development of horticulture, floriculture and sericulture in the state.

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