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issued in October 2004 after accepting V.S. Vyas committee recommendations,
that banks should endeavour to increase their disbursements to marginal and
small farmers; subsequently, this requirement was quantified at 40% of their
direct advances under special agricultural credit plans (SACPs) to be achieved
by March 2007. Again, recently, when the special “doubling” programme was
announced in June 2004, the Government insisted on 50% of the additional
loans being earmarked for small and marginal farmers. Despite these repeated
emphasis in policy, the banks adopted a lukewarm attitude insofar as their
lendings to small and marginal farmers were concerned. This has happened
even after sizeable increases have occurred in the share of marginal farmers in
total area operated in recent decades. Besides, as the following results suggest,
the distributions of commercial bank credit disbursements by land size have
also not been steady; rather they have been widely fluctuating.
Data collated and released by the RBI on the distribution of bank loans
by land size relate to disbursements (Table 4.12) and outstandings (Table
4.13). There are only marginal differences in the two distributions. Broadly,
both shows gradual increases in the shares of small and marginal farmers
during the 1980s, declines in the 1990s and some arresting of the falling trend
after the doubling of bank credit phase began in 2004-05. Some beneficial
effects were in fact seen in the early part of the current century.
Thus, the share of marginal farmers (up to 2.5 acres) in credit
disbursements rose gradually from 25% in 1980-81 to 30% in 1990-91 but
declined thereafter to the lowest level of 22.1% in 2002-03. Similarly, the share
of small farmers (2.5 acres to 5.00 acres) improved from 17% in 1980-81 to
26% in 1993-94 but fluctuated thereafter and declined to 23% in 2003-04. In
both the cases, the post-doubling phase has seen the share ruling at a higher
plateau of about 25 to 27%. The share of cultivators with land holdings above
5 acres experienced counter to the above trends. In the latest phase, the decline
has been rather sharp from about 52% in 2003-04 to 46% in 2009-10, the
latest year for which the data are available.
Another feature of growing unequal distribution is revealed in Charts
4.7 and 4.8. These show how average loan amounts per loan account have been
rapidly increasing after the 1990s in respect of large landholders as compared
with the relatively moderate increases for the small farmers and more so, for
the smallest size groups of marginal farmers. Increases in average loan amounts
per account in respect of the large size groups have been much more sharp in
disbursements (Chart 4.7) as compared with outstandings (Table 4.13).
