From Our Special Correspondent
Daijiworld Media Network - Bangalore

Bangalore, Jun 1: Karnataka has set an ambitious target of disbursing crop loans to the tune of Rs 7,000 crore for farmers at 1 % interest rate during the current financial year.

The Government has already issued an order directing cooperatives and nationalised banks to disburse crop loans up to Rs 3 lakh at 1 % rate of interest.

The subsidised crop loans would burden the State exchequer to the tune of Rs 675 crore in 2011-12.

However, to avail 1 % rate of interest on crop loans farmers have to repay the loan within one year. The banks would charge the prevailing rate of interest if farmers delayed the repayment.

Cooperation Minister Laxman S Savadi on Wednesday reviewed the progress of his department over the last three years and said efforts would be made to grant loans to 25 lakh families in the current year.

As many as 14.32 lakh farmers borrowed Rs 4,647 crore from various cooperatives in the State at 3 % rate of interest in the year 2010-11. The recovery rate of loans was 88 % last year.

The department has been implementing recommendations of the Vaidyanathan Committee recommendations for reviving cooperatives and so far Rs 712.56 crore has been disbursed for cooperatives for strengthening their capital, Savadi said.

The minister ruled out total waiver interest or crop loans borrowed by farmers.

The Government has already reduced the interest rate from 3 % to a lowest 1 %, for the first time in the entire country, to encourage farmers to avail crop loans institutions and escape from the menace of moneylenders.

The rate of interest on medium and long term loans is3 %. The duration of medium term loan is 3 to 5 years while the duration of the long term loan is 5 to 10 years, he said.

There are 35,000 co-operative societies in the State with a membership of over 2 crore.