`Kisan credit card' scheme fails to take off

`Kisan credit card' scheme fails to take off
RAKSHIT SONAWANE

NASHIK, JANUARY 17: The much publicised `Kisan Credit Card' (KCC) scheme launched by the Central Government has failed to take off, due to the lethargy of primary agricultural credit societies (PACS) and a large number of defaulting farmers, who fail to qualify for the facility.

The scheme has been introduced for easy, timely and adequate credit to farmers. The scheme has been open to all farmers, provided his need is for an amount above Rs 5,000 and that he has not defaulted in repayment of loans in the past three consecutive years.

The farmer is given a credit card and a cheque book to enable him to get cash, instantly. The credit limit it worked out on the basis of his land holding and the value of the crop he wants to cultivate.

However, the ground root reality had made the scheme a futile exercise. Agriculture officials point out that considering the loan repayment habit in rural areas, it is very difficult to find farmers, who have repaid their loans in time every year for three years in arow.

An official pointed out that whether it were electricity bills or land revenue or loans from cooperatives, farmers have formed a tendency of putting off their liabilities in the grim hope that some day the government might write them off, as done on several occasions in the past. The tendency has become a habit in case of those engaged in dryland farming.

Another factor which has dealt a heavy blow to the KCC scheme is the attitude of the PACS, which, traditionally, have been dealing directly with the farmers. Credit to farmers is normally distributed through a three-tiered structure: State cooperative bank-district cooperative bank-PACS. For central schemes, the NABARD uses this structure to disburse loans.

The PACS, which have a dense network in rural areas, almost in every village, deal directly with the farmers. For decades, farmers have been approaching the local PACS for getting loans, which involve a lengthy paper work and sanctions from PACS to the district central cooperative bank to thestate cooperative bank and back.

The KCC scheme has reduced the role of the PACS in the whole exercise, annoying those who run them. For instance, a farmer just has to produce his credit card and obtain loan instantly from the branch of the district cooperative bank. The credit card (which is actually a sort of a pass book containing the particulars of the farmer) enables a farmer to get cash directly without going to the PACS.

However, the hitch is that the scheme which has eliminated the PACS in disbursing loans, wants to use the same PACS for recovery of the loans. This has annoyed the PACS who have turned a blind eye towards the whole scheme and has yet to take active interest in promoting the scheme.

An official of the Nashik District Central Cooperative Bank said that a target of distributing one lakh credit cards had been set for the bank, but it had not been able to distribute even 10,000 cards. He pointed out that one reason was that the scheme was initiated when the credit for the Kharifseason had already been disbursed.

He further said that PACS were not taking any interest in promoting the KCC scheme for obvious reasons (the PACS want the farmers to continue dependent on them for loans). He pointed out that like other government schemes, the credit card scheme, too, had become `target oriented', where evaluation was only on statistical papers, without any real look at the grassroot level.

Another official said that the complete elimination of the PACS from the credit structure would be an alternative to speed up the scheme, but, it would require the amendment of the Cooperatives Act. He added that if the present set up were not changed, the recovery of credit granted to farmers would be at the mercy of PACS.