Annual Report 2010 - Ministry of Finance and Planning

Ministry of Finance and Planning Sri Lanka > Annual Report 2010by Anuradhapura and Jaffna Districtsproviding Rs. 686 million and Rs. 586million respectively. The highest numberi.e. 302 of purchasing loans have beendisbursed in Hambantota District, whichamounts to Rs. 1,200 million (Map 6.1).In terms of crop distribution, thepaddy sector dominates with a totalland extent of 161,553 acres and atotal disbursement of Rs. 2,239 millionfollowed by onions and maize with atotal land extent of 13,516 acres and11,821 acres, respectively (Chart 6.12).Since the market has been settled andinterest rates have fallen from 14 percentto a range of 10 to 12 percent, as a resultof the prudent monitory policy of theGovernment, the 2 percent interestsubsidy provided for purchasing loansunder NCRCS was withdrawn with effectfrom 20th September 2010. However,the present policy framework aims atfurther raising production to a sustainablelevel over the next decade. Therefore,the Government continued the interestsubsidy provided under NCRCS forcultivation loans. It was found to bethat the annual total amount releasedfor cultivation loans under this schemerepresents less than 5 precent of the totalagricultural sector loans provided by themain Government Banking Institutions(i.e. People’s Bank, Bank of Ceylon andRegional Development Bank) of SriLanka.Krushi Navodaya Loan SchemeThe Government announced the “KrushiNavodaya” programme by a budgetproposal of 2007 in view of encouraginglocal agricultural production byempowering the small farmers throughproviding access to agricultural inputsat an affordable cost. The PFIs provideloans for the farming community rangingfrom Rs. 10,000 to Rs. 100,000 usingtheir own capital on cost sharing basis at8 percent interest rate per annum whilethe Government bears the remainingpart of the cost of funding at 6 percentinterest rate per annum. The scheme wasterminated on 30th April 2010 disbursinga total amount of Rs. 2,329 million among32,698 small-scale farmers (Table 6.14).Table 6.13 > Progress of Cultivation Loans under NCRCS, 2009 - 2010Loan Details 2009 2010 % IncreaseTotal Amount of Loans Released(Rs. Mn)Source: Department of Regional Development, Central Bank of Sri LankaChart 6.12 > Cultivated Land Extent by Crop under NCRCS - 2010( Acres )Potato3,534.12%Maize11,820.86%Onion13,516.17%Table 6.14 > Progress of Krushi Navodaya Loan SchemeParticipatory FinancialInstitution (PFI)Source: Lankaputhra Development BankChillie3,283.42%Vegitable4,158.02%No. of LoansOther2,942.61%Paddy161,552.980%2007 - 2010Amount Granted(Rs. Mn)Bank of Ceylon 13,572 814.81People's Bank 8,221 655.98Commercial Bank 1,615 119.84Hatton National Bank 424 39.01Sampath Bank 11 0.35Sanasa DevelopmentBankRegional DevelopmentBankLankaputhraDevelopment Bank2,919.53 3,583.57 22.7Extent of Land Cultivated (Acres) 169,819.3 200,807.9 18.2Total Number of Beneficiaries 62,359 72,014 15.52,363 171.924,504 363.341,988 164.09Total 32,698 2,329.34305