Performance of pledge loan scheme for agricultural commodities in North Karnataka

Abstract

The pledge loan scheme of the State Governments implemented through the regulated market committees works out to be very economical for the farming community as the rate of interest charged on such loans is less compared to the one charged by the commercial banks for the same kind of loan. The Karnataka Agricultural Produce Marketing (Regulation) Act provides for sanction of such short-term advances by the market committee to the producer- cum-seller against the pledge of their produce during the times of low market prices. The scheme is in force since 15-8-1995 in the regulated markets of the state. The results of the present study conducted to analyse the performance of pledge loan scheme in North Karnataka suggested that a vast number of farmers are ignorant about the scheme. The other problems in the implementation of the scheme include non-availability of adequate scientific storage facility, which is a pre-condition for the implementation of the scheme, and inadequate quantum of pledge loan available from the market committees.