Centre on Thursday loosened its purse strings for farmers by offering Rs 30,000 crore as additional emergency working capital for rural banks for meeting additional crop loan requirements for the ryots.
Announcing the second tranche of financial package to re-start the Covid-stalled economy, Finance Minister Nirmala Sitharaman also announced concessional credit to the tune of Rs two lakh crore to about 2.5 crore farmers, including fishermen and animal husbandry farmers.
The Rs 30,000 in additional emergency working capital offered through NABARD will be over and above the Rs 90,000 crore that will be provided to this sector in the normal course, Sitharaman said.
The provisions for additional emergency working capital is expected to benefit three crore farmers, mostly small and marginal, in meeting their post-harvest Rabi and current Kharif requirements.
Under this scheme, Sitharaman said that front-loaded on-tap facility will be provided to 33 state cooperative banks, 351 district cooperative banks and 43 regional rural banks (RRB) based on their lending.
Sitharaman pointed to the inadequate financial resources available for the small and marginal farmers and added that RRBs and rural cooperative banks are the main source of credit for this category.
The Centre also announced an interest subvention on working capital for dairy farmers to help them handle the surplus milk and ensure timely payment to farmers.
Due to the lockdown, the demand for products such as ice-cream, flavoured milk, ghee and cheese have witnessed a decline and only a small quantity of milk is converted to products such as paneer and curd.
Dairy cooperatives have resorted to large-scale conversion of milk into high-shelf life products such as milk powder, UHT milk, white butter and ghee, leading to blockage of funds and causing difficulty in payments to farmers.
Now, dairies will have access to interest subvention on loans drawn from scheduled commercial banks, RRBs, cooperative banks, financial institutions between April 1, 2020, and March 31, 2021 by cooperatives and farmer producer organisations for the conversion of milk into conserved commodities and other milk products.
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