Bhubaneswar: Odisha is an agrarian State. Growth in production and productivity in agriculture can be achieved only through the flow of the required amount of funds for investment in agricultural operations.
Most of the farmers in the State belong to the small and marginal category with the small & marginal land holdings. These farmers do not have the required capital resources for their agricultural operations for which they require to avail hassle-free Crop loans from financial Institutions.
For agricultural operation availability of adequate and hassle-free credit at a cheaper rate to farmer has been the top priority of the State Government. To ease off interest burden of crop loan on farmers, the State Government introduced interest subvention Scheme to provide Short Term Credit to farmers at subsidized interest rates for their farming operations. It helps in growth of production and productivity and enhancement of income of farmers from farming activities leading to a better livelihood.
Odisha has a three-tier “Short Term Cooperative Credit Structure (STCCS) with Odisha State Cooperative Bank at the Apex (State) level, 17 Central Cooperative Bank at the Middle rung (District level) and 2710 Primary Agricultural Cooperative Societies (PACS) and Large Sized Adivasi Multipurpose Cooperative Societies (LAMPCS) at the grass roots level have been playing a vital role in dispensation of agricultural credit. Cooperatives have achieved significant strides in Crop loan dispensation from Rs 438.36 crore to 6.40 lakh farmers in the year 2000-01 to Rs 16683.57 crore to 34.57 lakh farmers in the year 2022-23. At present the Cooperatives provides about 55% of the total Crop loans dispensed to the farmer in the State as against the National average of 17%.
The State government has decided for dispensation of crop loan up to Rs 1.00 lakh at 0% interest rate per annum (Interest-free loan) from 1st April — 2022 and for Crop loans above Rs 1.00 lakh to Rs 3.00 lakh, the applicable rate is 2% for prompt paying farmers.
Earlier, interest-free crop loan was being provided up to the limit of Rs 50,000 under KALIA. During the year 2022-23, 32.43 lakh small and marginal farmers availed crop loan from Cooperative Banks / PACS within Rs 1.00 lakh at 0% interest rate per annum.
In order to compensate the loss sustained by the Cooperative Banks / PACS on lending of crop loans at directed rate of interest as stipulated by the Government, the Government of Odisha is providing interest subsidy / subvention to the Cooperative Banks/ PACS.
The State Cabinet after careful consideration in its meeting today approved the provision of Rs 5,700 crore for implementation of the State sector Scheme “Interest Subsidy-Subvention to the Cooperative Banks /PACS for five years from 2023-24 to 2027-28 to ensure adequate credit flow in the agriculture at an affordable rate of interest to the farmers in the State.
