The Hindu Business Line : `Landless rich' knock more on SBI doors

THE scheme is for the poor, but the response is from the rich! Sounds unusual? But this has been the initial reaction to the Government's populist credit scheme for landless farmers to acquire farmland.

State Bank of India, one of the major banks which introduced the scheme to assist poor farmers in acquiring land, has found to its surprise that the response has been more from the "landless rich'' rather than the "landless poor''.

Under the scheme, introduced last year, SBI provides landless farmers up to Rs 2 lakh for buying land for agricultural purposes at the rate of 11.5 per cent per annum.

According to bank officials, there have been many enquiries - particularly from Tamil Nadu and Andhra Pradesh - for funds to buy large tracts of farmland, the amount required being higher than the Rs 2-lakh limit stipulated by the bank. In States such as Kerala and Punjab, land prices are so high that Rs 2 lakh cannot fetch farmland of minimum economic size, according to a bank official. Bank officials, however, said that the scheme had received an encouraging response from several villages in Tamil Nadu, Orissa, Andhra Pradesh, Karnataka, and even Madhya Pradesh and Rajasthan to some extent. "It is too early to talk about any figures," an official said.

In areas where land cost is low - say, around Rs 1,500 per acre and less - the response has been good. But the amount of funds sought was higher than the ceiling of Rs 2 lakh, the bank official said.

This is the first scheme providing credit to farmers to buy land. Till now, bank funds were available to farmers only for the purchase of farm equipment.

The credit scheme for landless labourers is part of SBI's strategy to boost lending to the agricultural sector. To achieve the mandatory 18 per cent lending target to the sector, the bank has come out with a host of other schemes. As of September-end 2001, advances to the sector stood at 15.39 per cent.

The new schemes include kisan credit cards, credit for farmers to buy two-wheelers and machinery for harvesting and post-harvest handling of crops.

Another official said, "The credit needs of farmers have changed. In addition to buying farm inputs, they also borrow for purchasing consumer durables.'' SBI is also offering them a separate scheme to buy two-wheelers. But of all its schemes, the most encouraging has been kisan credit cards.

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