The Planning Commission
has estimated the demand
for foodgrains for the year 2011-12 to be 298.38 million
tons taking factors such as the per capita consumption levels of
various commodities, population growth rate and the elasticity
of demand with respect to per capita consumption expenditure into
consideration. The production of foodgrains is expected to
reach 337.30 million tons by 2011-12. For meeting this challenge
effectively, among other things, the credit flow both for
production and investment purposes has to be improved. During 2004-05,
the Central Government made various announcements to boost the
farm sector. Doubling of farm credit in three years was one of them.
In order to achieve this target, various steps were outlined. The
steps included attempts by rural and semi-urban bank branches to
add 100 new borrowers each year, to take up two to three new
investment projects each year, to finance 10 agri-clinics and
agro-business in each district, to prepare village profiles, to sanction credit to
small and marginal farmers, to simplify process of documentation, and
to step up credit mechanism for agricultural diversification,
post-harvest facilities, marketing, processing and infrastructure
creation. Against this background, it would be important to
understand various facets of agricultural credit in the recent past, detect
the realities, and explore the myths.
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