Agro livestock development loans for farmers

Farmers are encouraged to adopt modern scientific animal husbandry practices to enhance liquid milk production with the support of the officers in the livestock development sector under the Agro Livestock Development Loan Scheme launched by the Central Bank of Sri Lanka (CBSL).

An incentive package has been introduced for Livestock Officers in consultation with the Ministry of Livestock Development. Under the scheme, Veterinary Surgeons will improve the knowledge of the farmers by conducting classes which cover important topics such as cattle shed, food and water requirement of animals in respect of nutrition, diseases and treatment, artificial insemination, animal care, setting up bio gas units and farm management.

In addition, Livestock Development Instructors (LDIs) have been given annual targets under four areas, i.e. introducing farmers to financial institutions, artificial insemination, tree and fodder cultivation and setting up bio gas units. Officers who achieve their annual targets will be eligible to receive the incentive payments from the Central Bank of Sri Lanka at the end of each year.

At the certificate award ceremony conducted at the CBSL on Friday to appraise the performance of the Livestock Officers, eight Livestock Development Instructors, who achieved annual targets introduced under the scheme for the year 2008, were awarded cash prices from the CBSL. Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal, chaired the meeting and Secretary to the Ministry of Livestock Development, Sunimal Senarathna, other senior officers of the Ministry of Livestock Development and the Ministry of Finance and Planning and CEOs of Participating Financial Institutions also participated.

The main objective of the agro livestock development loan scheme is to assist farmers to adopt modern animal husbandry practices to increase productivity. Accordingly the farmers have been educated to deviate from traditional practices and to adopt modern scientific animal husbandry practices under the scheme.

They have been asked to construct standard cattle sheds to keep the animals inside instead of allowing them to roam in the field. A part of the loan funds could be used to feed the cows with concentrated feed, grass and fodder with adequate water and also with required veterinary care.

The loan limit will be determined on the basis of the Veterinary Surgeon’s recommendation on the capacity of each farmer. The Veterinary Surgeon will look into the experience of the farmer, availability of water and fodder and other necessities required for animals.

Farmers could obtain loans for construction of cattle sheds and to purchase of cows, Purchase of concentration feed, veterinary services and drugs, Construction of bio-gas tanks, and any other requirements recommended by Veterinary Surgeons.

The loan limits extend from Rs. 50,000 to Rs. 400,000 per borrower at an interest rate of 12 percent per annum. The maximum repayment period is five years. Participatory Financial Institutions (PFIs) are eligible to receive an eight percent subsidy from the Government.

In addition, liquid milk processing industries are also eligible to receive bank loans under the credit program up to a maximum of Rs.300 million per industry. Interest for such loans will be 14 percent per annum and a maximum of five years is available for repayment.

Processing industries could obtain loans for the following purposes: Construction of industrial buildings/modernization; Purchase of modern machinery and equipment; Procurement of storage, cold rooms and transportation services and other required services and equipment for maintenance of standards.

Five thousand million rupees will be disbursed at a concessionary rate of interest under the scheme to small-scale dairy farmers, liquid milk processing industries and agricultural crop processors.

As at to date, 5,940 borrowers have been registered with the Central Bank of Sri Lanka through PFIs and 1,157 million has been disbursed among 4,183 borrowers under the loan scheme.

The loan scheme is expected to continue during the period 2009-2010 islandwide.