Lending rate for agri loans reduced

The lending rates for the three agricultural credit schemes operated by the Central Bank under the patronage of the Government for the farming community have been reduced from January 1, 2010.

Accordingly, the annual interest rates for the loans granted to the farmer community under the New Comprehensive Rural Credit Scheme (NCRCS), Agro Livestock Development Loan Scheme (ALDL) and Krushi Navodaya Special Loan Scheme have been reduced by four percent.

Scheme

The NCRCS loan scheme caters to 34 field crops including paddy and is provided to farmers for cultivation purposes.

This scheme is also extended to buyers of these agricultural commodities, who have signed forward sale agreements with the farmers.

Total loans amounting to Rs 10 billion are disbursed each year under this loan scheme. The ALDL scheme which was introduced under the Government Budget of 2008, for increasing liquid milk production in the country, has disbursed Rs 500 million in 2009.

Further, a large number of dairy farmers have shown keen interest to register under this loan scheme. The Krushi Navodaya Loan Scheme introduced under the Government Budget of 2007, caters to the medium term loan requirements of the farmer community for agriculture and animal husbandry. The Government’s intention for reducing the interest rates of such loans is to encourage new investment in agricultural and animal husbandry projects. This will enable an increase in the volume in agricultural produce and liquid milk and other livestock products.

This in effect will serve the Government’s objective of achieving country’s food security and uplifting the livelihood and the income levels of farmer community.