The sector-specific analysis, ‘Agriculture credit in India’ reveals that the small and marginal farmers including tenant farmers and share croppers in north eastern, eastern and western parts of the country could not avail the benefits from the existing crop loans due to poor awareness.
"Credit flow to farmers from banks in all four states like Karnataka, Andhra Pradesh, Tamil Nadu and Kerala is higher than other states. There is increased awareness about farm credit because of initiative taken by the government and banks," according to the study by ASSOCHAM.
Farm credit flow in South India rose to Rs 1,84,046 crore in 2010-11 fiscal from Rs 1,12,342 crore in 2008-09. Similary, credit flow to farmers in North India increased to Rs 1,15,636 crore from Rs 84,342 crore in the same period.
However in north eastern region, credit flow remained at Rs 4,620 crore in 2010-11, lowest as compared to other parts of the country. Farm credit flow to farmers in western and eastern region has increased marginally to Rs 62,804 crore and Rs 38,261 crore, respectively, in 2010-11 fiscal, the study reports.
"Although several initiatives have been taken by the government in recent years, there are some bottlenecks that continue to affect the flow of credit to agriculture. The policies are in place but promotional efforts are required to be taken to reach the largely disadvantaged section of farmers," ASSOCHAM Secretary General D S Rawat said.
The credit flow to agriculture has crossed Rs 5,75,000 crore during 2012-13 fiscal. The same has been increasing in the case of small and marginal farmers in the last few years. However, the growth under agriculture has been very low. Also, assistance to tenant farmers (including share croppers, oral lessees) by formal financial sector need to be scaled up in the coming years to achieve higher growth.
"There is dire need for conducting awareness camps in association with the concerned banks to pursue farmers to approach banks. State governments and local panchayats should take initiative to spread awareness about farm credit," Rawat suggested.