Farmers in the district are investing heavily on short-term crops and neglecting investment on long-term infrastructure creation and farm modernisation, which could affect yield in the future.
An analysis of the Annual Credit Plan 2011-12 of Madurai, which contains data on target achievement for the preceding fiscal revealed that short-term crop loans accounted for nearly 85 per cent of the advances given for agriculture and allied operations during 2010-11.
Such low investments in long-term asset creation and infrastructure such as irrigation, farm mechanisation and modernisation could result in decline in agricultural output in the long run, R. Shankar Narayan, Assistant General Manager, National Bank for Agriculture and Rural Development (NABARD), told The Hindu here on Sunday.
According to the ACP data, short-term crop loans constituted Rs. 1,140 crore of the total Rs. 1,344 crore which was disbursed to agriculture and allied activities. Crop loans in Madurai district are taken out mainly for paddy and sugarcane.
In the long-term loans category, nearly Rs. 204 crore was disbursed. These include loans for the following sectors: dairy sector got Rs. 24 crore, poultry Rs. 5 crore, goat and sheep rearing Rs. 10 crore and storage facilities Rs. 8 crore.
A sum of Rs. 46 crore was disbursed for farm mechanisation, Rs. 31 crore for minor irrigation, Rs. 36 crore for plantation and horticulture, Rs. 17 crore for land development and Rs. 19 crore for other agriculture activities.
Such a trend of concentrating credit in short-term crops loans is persisting into the coming financial year also as the ACP 2011-12 had set a target of Rs. 1,244 crore. This sum accounted for nearly 84 per cent of the total Rs. 1,482 crore for allocated for agriculture and activities
Mr. Shankar Narayan said that banks tend to focus on crop loans as recovery tends to be good. However, lack of investment in post-harvesting technology, marketing skills and standardisation were vital to increase production in the long-term. This issue had been taken up during district banking committee meeting.
For stable agricultural growth in economic development, promoting investment credit in long term investments was a prerequisite. At different points of time, the Union Planning Commission had stated that to take the country towards double digit GDP growth, the contribution of agriculture had to be scaled up and this was possible only through heavy investment in capital formation in the sector, he added.
