In Tamil Nadu, there are 4474 Primary Agricultural Cooperative Credit Societies.
It provide credit to the farmers, distribute inputs like fertilizers and also run outlets under Public Distribution System.
These banks provide short term and medium term credit for agriculture and allied activities.
The short term loans are repayable within a period of 12 to 15 months and the medium term loans are repayable within 3 to 5 years.
Crop loan is the prominent item of credit to the farmers by Primary Agricultural Cooperative Credit Societies, provided without collateral security upto 10 acres in respect of registered sugarcane growers and upto Rs.1 lakh in respect of other crops.
The loan amount exceeding this limit is secured with mortgage of property or pledge of jewels.
Primary Agricultural Cooperative Credit Societies also issue loans for other agricultural purposes like purchase of farm machineries and for non-agricultural purposes including loans for the purchase of consumer durables, housing loans, education loans and professional loans.
To provide marketing facilities for the sale of agricultural produce
To associate itself with economic and social welfare programmes of the village.
Considering the importance of increasing credit flow into the agriculture sector, Government has reduced the interest rate for the crop loans from 9% to 7% per annum from 2006-07, the interest differential being compensated by the Government.
The Government is taking all efforts to inculcate the habit of financial discipline among the farmers. As a special measure, Government have announced further reduction of interest from 7% to 5% for all crop loans being repaid promptly by the farmers. This has been further reduced to 4% in 2008-09.
The Government lays emphasis on the timely disbursement of crop loan in adequate quantity. It is proposed to disburse Rs.1500 crores as crop loan during 2008-09. It is further proposed that the lending through Farmers Group will be encouraged by forming Joint Liability Groups which will benefit the farmers to get additional assistance by way of revolving fund to the tune of Rs.10 crores. This is expected to benefit the farmers in a great way to consolidate themselves and pool their resources in arranging their inputs supply, organizing cultivation activities and making joint efforts in marketing to fetch a better price for their produce. Ultimately this will pave way for consolidation of the farming activities by the farmers facilitating appropriate technological intervention for improving the productivity of the farm sector.
As a policy, this Government is not for liquidation of any Primary Agricultural Cooperative Societies which has been set up for the specific purpose of serving the farmers in their respective operational areas.
This Government considers that Primary Agricultural Cooperative Credit Societies are the fulcrum on which integrated package of services such as credit, insurance, inputs, marketing and extension can be delivered to the farmers. Recognising the importance of increasing productivity in agricultural sector as envisaged in the XI Five Year Plan, Primary Agricultural Cooperative Credit Societies will be actively engaged in provision of integrated service to the farmers and serve as a point of dissemination of the technology and the improved cultivation practices. It is expected to increase the prosperity of farmers by availing better services particularly in the area of technological intervention. In this process, Primary Agricultural Cooperative Credit Societies will actively collaborate with Agriculture Department and the Research & Development organisations and provide all inputs and services under one roof.
The Primary Agricultural Cooperative Credit Societies will also act as Paddy Procurement Centres on behalf of Tamil Nadu Civil Supplies Corporation and will procure paddy at the minimum support price announced by the Government in the non delta areas apart from Direct Purchase Centres operated by Tamil Nadu Civil Supplies Corporation. Primary Agricultural Cooperative Credit Societies will also assist the Cooperative Marketing Societies, Tamil Nadu Cooperative Marketing Federation and National Agricultural Cooperative Marketing Federation of India (NAFED) to procure the agricultural produce directly from the farmers.Primary Agricultural Cooperative Credit Societies will expand their produce pledge loan operations substantially to prevent distress sale by the farmers during peak harvest.
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