Farmers, hemmed in by the need for more fund flow and fleecing by private lenders, have called for “reinventing” primary agricultural cooperative societies (PACS) across the State to bridge the rural credit demand-supply gap that is widening by the day.
Despite a large network of PACS, only the writ of private moneylenders and micro financial institutions (MFI) runs in rural areas. Poor farmers and gullible villagers, especially women self- help group members, fall prey to their machinations and are charged exorbitant rates of interest. It is here that PACS could play a vital role in extending credit to the needy in a hassle-free manner. For that transformation to happen, political interference must be wholly avoided, said Mannargudi S. Ranganathan, general secretary, Tamil Nadu Cauvery Delta Farmers Welfare Association.
The PACS working must adopt the Kerala model, wherein every household is linked to PACS directly and enjoy easy access to credit for their legitimate needs. PACS must go past extending just agri loans, said K. Balakrishnan, former CPI (M) MLA and State president, Tamil Nadu Vivasayigal Sangam.
“We recently conducted a conclave in Madurai that specifically focussed on the revamping and strengthening of the cooperative sector to make it more relevant to society,” he added.
Each PACS has a member base of ranging from 500 to 2,000 persons and covering some three panchayat villages. They are primarily involved in lending crop loan to farmers and their share is only about 5%, despite their strong presence. That is because there is no diversified lending by the PACS, although they are permitted to do so. This also hampers them from being a viable institution. Such non-viable PACS are unable to deliver the required credit support to rural areas, contends K. Subramanian, District Development Manager, NABARD.
NABARD is incentivising cooperative banks to support rural artisans, weavers and other rural micro entrepreneurs. It has also come out with loan-cum-grant products for financing rural housing and repair. There is a grant portion for cooperative banks, which could be used for capacity building purposes, he added.
PACS can establish an agri input shop, agro service centre providing farm machineries on hire, storage facilities, processing units, procurement of agri produce, consumer shops, outlets for selling members’ products, medical shops and the like. In short, they can act as a one-stop shop for servicing rural people. Well-diversified credit and non-credit activities of PACS can change the rural economy in a big way, S. Ramalingam, a progressive farmer of Vilamal in Tiruvarur district, felt.
