State govt. urged to bear additional interest sought by NABARD from Apex bank to ensure adequate credit facilities for farmers

Dinesh Gooli Gowda, Congress MLC, has urged the State government to bear the additional interest sought by NABARD from Apex bank to ensure adequate credit facilities for farmers.

In a letter addressed to Chief Minister Siddaramaiah, Deputy Chief Minister D.K. Shivakumar, Cooperation Minister K.N. Rajanna, and the State Chief Secretary, Mr. Gowda pointed out that NABARD provided ₹5,450 crore loan to the State Apex Bank last year at 4% interest rate, which facilitated the district Apex and District Central Cooperative (DCC) banks to provide loans to farmers.

However, this year, NABARD had limited the loan amount to the Apex Bank at 4% interest to ₹2,700 crore.

“Every year, NABARD provides loans to DCC banks through the State Apex Bank at low interest rates. The DCC banks provide loans to farmers through Primary Agricultural Cooperative Societies in their jurisdiction. As a result, farmers can grow food grains without heavy debt burden, improve their living standards and feed our people,” he said.

With the State government setting a target of distributing ₹28,000 crore credit to 37 lakh farmers to sow crops in 114.40 lakh hectares during the kharif season, there is a possibility of capital shortage for the State Apex bank and DCC banks for loan distribution in view of NABARD’s regulations.

As NABARD is ready to provide additional loans as required by the State by levying an interest of 8.25%, which amounts to an additional interest of 4.25%, Mr. Gowda urged the government to bridge the interest difference and ensure timely credit facility for the farmers.

“This year, the State has set a target to produce a total of 160.74 lakh tonnes of grains, including 148.48 lakh tonnes of food grains and 12.26 lakh tonnes of oilseeds. The target is to sow crops in 114.40 lakh hectares during the Kharif season,” he said.

Fearing that State’s Apex Bank, DCC banks and Primary Agricultural Co-operative Societies may face financial difficulties if they have to pay the additional interest to obtain loans, Mr. Gowda said there is a possibility that the State may not be able to produce the targeted amount of food grains in this financial year if they are unable to provide adequate loans to farmers.

With the kharif season already beginning in the State and agricultural activities gaining momentum, Mr. Gowda said the Agriculture Department too has made preparations to distribute the required seeds and fertilizers to the farmers in the State.

“For the Agriculture Department to meet its sowing targets, it is necessary to provide farmers with adequate credit facilities at zero interest rates in a timely manner,” he said.

According to the Agriculture Department, the demand for sowing seeds is 5.99 lakh quintals and demand for chemical fertilizers is 26.77 lakh metric tonnes while the sowing target is 114 lakh hectares and food grain production target is 149 lakh tonnes, he said.

Mr. Gowda also said several women’s self help groups (SHGs) in the State were unable to avail the zero interest rate loan facility up to ₹3 lakh as they have not been registered on the relevant portal and hence paying interest.

“There are strict regulations in portal registration, and I request on behalf of the farming community of the State to simplify them,” he said in the letter.

Published - June 01, 2025 07:59 pm IST