India govt may soon consider giving farmers crop loans at a very low interest through cooperative and other banks. In a scheme that may greatly boost the rural economy, India govt is likely to pay two percent interest subsidy to the banks.

Sources say the govt had earlier announced in the budget that the interest subvention scheme giving short term crop loans to farmers at 7 percent annual interest would cover 2012-13.

Besides, schemes such as additional help of three percent for immediate payment by farmers and post-harvest loans against warehouse receipts would be available.

The exercise is intended to reward farmers for paying their loans in time and for keeping their produce in warehouses.

There is general agreement about the fact that farmers need to be provided with easy and affordable credit so that there is spike in the agriculture credit targeted for the current year.

The Chief Minister of Bihar Nitish Kumar opposed FDI in retail saying that food supply chain in a country of our size can be brought best by cooperative sectors.

He felt need of massive investment in expanding storage, warehousing and cold chain infrastructure in the public and cooperative sectors in India and improving their management.

Allowing FDI in retail cannot be a substitute for positive public intervention and desired level of public investment in this crucial area, the Chief Minister contended.

Nitish contested that the votaries of FDI in retail argue that the policy would transform rural economy and unlock supply chain inefficiencies in the agri-business.

But in reality the global retailers through their retail chains will set up backend “captive infrastructure” meant for their own business operations and not openly available for the farmers, consumers and public at large.

Earlier, GCMMF Managing Director R S Sodhi had also opposed FDI terming it anti-farmers.

Opinions are slowly building up in the country in favour of giving a try to cooperative model in a big way to solve farmers’ woes.

Declining sugarcane production in the state has made the dynamic Chief Minister Manohar Parrikar announce incentives to the cane farmers if they increase the production by 15 per cent in next two years.

Parrikar told the state Assembly that the government is contemplating the possibility of giving more profits to the sugarcane farmers.

“Ten years back the sugarcane cultivation was spread over 1,200 hectares of land which has now reduced to 850 hectare. The production has gone down from 68,000 tonnes to 46,000 tonnes during the last decade,” Parrikar said.

The target for next two years is to achieve 75,000 tonnes of sugarcane production in the state, he said. State Cooperation Minister Dipak Dhavalikar told the Assembly that the Sanjivani Sugar Factory, which runs in Dharbandora village, will have difficulty to procure the sugarcane from the neighbouring state this year due to drought conditions there.

He said Goan sugarcane farmers will be given an additional 15 percent incentive, along with their cost of cultivation if the production of the crop increases.

Responding to a suggestion by Leader of Opposition Pratapsinh Rane to use the capacity of sugar factory to produce ethanol, the minister said the government can study the proposal.

The court intervenes when government fails- seems to have become norm of Indian life. The sugarcane farmers finally got reprieve when the Punjab High Court ordered payment to them to the tune of Rs 100 cores by the mill owners who had received sugarcane from them earlier.

Eight sugar mills owed them this amount towards the last year payment. High Court was so stern that it called for sale of these mills if they fail to pay by August 9.

These mills are Gurdaspur Cooperative Sugar Mill, Batala Cooperative Sugar Mill, Bhogpur Cooperative Sugar Mill , Nakodar  Cooperative Sugar Mill , Fazilka Cooperative Sugar Mill , Budewal Cooperative Sugar Mill, Ajnala Cooperative Sugar Mill and Morinda Cooperative Sugar Mill.

The payment is to be made before Sugarcane commissioner. The secretary, cooperative department has been directed by the High Court to ensure payment of balanced amount to farmers.

In a departure from the tradition in which cooperative leaders travel abroad in business class to attend even insignificant cooperative programmes , farmers of the state of Maharashtra have begun to undertake foreign trips to apprise themselves with latest developments.

Over 150 farmers from Maharashtra recently visited some of the most advanced countries of Europe to acquaint themselves with the latest methods being used in agriculture. They visited milk and cheese processing units in Holland and saw at close quarters the applications of solar and other unconventional forms of energy in Germany.

The Maharashtra govt is partly footing the bill of the foreign trip. Sources say some more farmers would soon be going to Europe on their learning trip.

Sources add batches of farmers would also be sent to some of the non-European countries soon. A substantial fund has been earmarked for the purpose by the govt.

According to agriculture minister Radhakrishna Vikhe-Patil, such trips would provide farmers with the information about the latest tecniques and methods being used in agricultural field across the world and thus help them improve their own farming operations.

BJP farmers’ organisation has lauded the Madhya Pradesh Chief Minister’s bold decision to ensure the provision of interest free loans to farmers in the state.

The president of the organisation Bansilal Gurjar says the historic proposal sets MP apart from other states underscoring the pro-farmer attitude of the BJP govt in MP.

Gurjar claims there has not been a single farmer suicide in the state and the interests of farmers are in good hands here.

Nearly Rs.10 thousand crore would be disbursed as loans through both cooperative and commercial banks.

BJP farmers organisation has criticised the central govt for its anti-farmer attitude and urged it to grant constitutional status to Agricultural Cost Price Commission and to set up soon Agricultural Cost Monitoring Commission.

The state-owned cooperative society Markfed in Punjab has resolved to supply fertilizers to farmers at the rate that existed in the past.

According to Markfed sources, there are more than lakh tonnes of DAP available with them and arrangements are being worked out to distribute fertilizers among the Punjab farmers.

Sources claim distribution of fertilizers at the rate being supplied through the state cooperative society is a bargain that costs farmers much less than normal.

Punjab watchers say the move is bound to impart a much needed fillip to agricultural development in the state.

The RBI has expressed its resolve to improve further the Kisan Credit Card plan so that farmers may get better credit facilities in the days ahead.

It is in this context that the apex bank has called upon all the banks including the cooperative banks to provide farmers immediately with smart / credit cards

The RBI has made it clear that the cards should be technologically modern and user-friendly.

According to the RBI circular, the new KCC plan is being implemented with a view to organising things so that they match the current needs and fit well with other systems.

The RBI document says there will be no limit on transactions but each card will have a credit limit. All the banks have been instructed to keep the KCC holders informed of all the necessary details including the various insurance options on offer.

Haryana was exceptionally lucky when it attracted a record support of Rs 5,091 crore from the National Bank for Agriculture and Rural Development ( NABARD) during 2011-12.

It registered a growth of 32 per cent over the previous fiscal. Refinance support of Rs 4,658 crore was extended to banks in Haryana and of the total support, Rs 697.18 crore was provided towards investment credit as refinance for capital formation covering farm and non-farm sector activities to commercial banks, regional rural banks (RRBs) and cooperative banks.

78 per cent of the total support, was disbursed to cooperative Banks and RRBs to meet the short-term credit needs of farmers.

228 projects with a  loan-amount of Rs 486 crore have also been sanctioned for Haryana during 2011-12.

Mamata Banerjee, the Chief Minister of West Bengal seems to be bowing before the NABARD’s resistance to her proposed amendment in the state cooperative act, 2006. Her Cooperative Minster has rushed to add that the state would take Nabard into confidence before amending the act.

In her populist bid the Chief Minister had said that recovery would not be made from defaulting cooperative loanees thereby stifling the cooperative movement. An organization can last only when it is accountable and survives on its own with little help from the government.

In order to impress farmers without any real love she is pushing cooperatives on suicidal course, feel experts. They also refer to her stint as Union Railway Minister when she did not allow any hike in fare leading Railways to a very bad health. Taxes and discipline make an institution click, they argue.

In the present case Banerjee had said that co-operative banks would not be allowed to attach properties of farmers for loan recovery in cases of default.

NABARD has opposed Mamata saying that it is equal partner in loan-disbursement and any amendment which affects its recovery is violation of tri-partite MoU signed by the state, Nabard and the Centre.

NABARD’s loans provided to state government and financial institutions grew by 24.22 per cent in 2011-12 to Rs 2,784 crore.