Focus on weather-based insurance, banks told

The National Bank for Agriculture and Rural Development on Wednesday unveiled a credit plan for the State with an outlay of Rs. 68,172 crore.

Speaking at the State Credit Seminar, Chief Secretary S.V. Ranganath urged banks and other credit institutions to provide “special focus” to weather-based insurance services to farmers.

Observing that nearly three-quarters of the State is drought-prone, Mr. Ranganath said that such a service would protect small and marginal farmers. “Banks have to take the fragmentation of landholdings as a given, and use credit as a means of improving productivity,” he said.

Mr. Ranganath pointed out that farm yields in the State were much lower than the average in the country. He pointed out that yields for pulses, cotton, oilseeds and several other crops were particularly low.

S.N.A. Jinnah, chief general manager, NABARD, Karnataka, said that the credit plan allocates Rs. 44,000 crore to agriculture and allied activities.

He said that the depletion of groundwater has become so serious that solar-powered pumpsets can no longer be used. The average per capita credit disbursal is lower in Karnataka than in Tamil Nadu and Kerala, he observed.

H.S. Upendra Kamath, chairman and mangling director, Vijaya Bank, said that credit plans have hitherto concentrated on crop loans, rather than contributing to asset creation.

Referring to the potential of direct cash transfer scheme, he said that banks are only “tinkering at the margins”.

The State Level Bankers Committee will meet in April to ratify the proposed credit plan. Meanwhile, the plan will be discussed at various levels.

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