Nabard’s sudden announcement that it would end the role of primary agriculture cooperative societies as lenders to farmers has caused consternation in the cooperative circles in Gujarat.
The cooperative union in the state has said the Nabard move could jeopardize the very network of PACs in the country that has played an important role in providing farmers with short term credit for seasonal farming activities.
Sources say in the event of dissolution of PACs farmers would get badly exposed to traditional usury and this could seriously affect agriculture.
According to RBI, there are 93 thousand Pacs, 370 central cooperative banks and 32 state cooperative banks in Gujarat.
As per the Nabard’s circular, Pacs would, however, work as business correspondents of central cooperative banks. The change is being brought about in line with the RBI’s direction, the circular notes.
Large commercial banks have lately been active providing farmers with agricultural credit causing a sea change in the credit situation. Against this background, the amount of credit being offered by the cooperative bodies declined to a mere 17 percent in the last fiscal.