Farm experts are of the view that cheaper crop loan facility has played a significant role in enhancing the country’s food grains production, a record 250.42 million tonnes in 2011-12 crop year.
Since 2006-07, the government has been providing interest subvention to all public sector banks including cooperative banks for short-term crop loans of up to Rs 3 lakh, so as to ensure short-term agriculture credit was available at 7 per cent to farmers.
Sources say the finance ministry has suggested that the target of credit flow to agriculture sector by banks and financial institutions be continued at Rs 4,75,000 crore in the 2012-13 fiscal as well.
However, the ministry has sought some mechanism to be evolved to ensure credit access to farmers in the Eastern states, where the government is trying to usher in the second Green Revolution. Credit flow to eastern states has been lower as compared to other states.