NABARD to allocate Rs 21,000 crore to farmers
In view of the inconvenience faced by farmer in the wake of demonetisation, Economic Affairs Secretary Shaktikanta Das on Wednesday announced that the government has allowed NABARD to disburse Rs. 21,000 crore to cash-starved farmers, helping them sow winter crops like wheat ahead of the sowing season.
Farmers has been badly affected by the government’s demonetisation move, which swept away 86 per cent of currency in circulation, leaving them without cash just ahead of the sowing season.
The official said the National Bank for Agriculture and Rural Development (NABARD) will disburse the money to farm cooperatives for onward payments to farmers.
“NABARD, for the facility of agricultural operations in the current rabi season and especially for the benefit of farmers, has sanctioned a special limit of Rs. 21,000 crore to district central cooperative banks,” Das told a news-conference in New Delhi.
More than 40 per cent small and marginal farmers get crop loans from cooperative institutions, he stated.
The government’s move is aimed at easing liquidity crisis facing farmers who were left with very little cash to buy seeds and fertilizers for winter crops due to restrictions placed on bank withdrawals post demonetisation.
On Wednesday, the Reserve Bank of India (RBI) had yesterday relaxed rules on loans to farmers, allowing NABARD to disburse up to Rs. 23,000 crore to district cooperative banks for crop loans.
Das said that out of the total agriculture credit, institutional credit meets more than 40 per cent of the requirement of small and marginal farmers. “So the sanction of Rs. 21,000 crore to the district central cooperative banks (DCCBs) will enable them to pass on or grant funds to the primary agriculture cooperatives. This will then help in meeting crop loan requirements of farmers in Rabi season,” he said.