March 5, 2009

India's government has decided to offer a 4 percent interest subsidy scheme for poultry farmers in West Bengal who had suffered significant losses due to bird flu.

The move is expected to help nearly 500,000 families in West Bengal involved in poultry farming.

Under the plan, farmers with regular outstanding poultry loans as on January 1, 2008 will be eligible for the scheme, indicating that farmers who defaulted in loan repayment before January 2008 will not get the benefit.

The subsidy will be offered on the accrued interest between January 1, 2008 and March 31, 2009.

Banks in West Bengal have outstanding poultry loans of nearly Rs300 crore, including interesting, according to statistics from the National Bank for Agriculture and Rural Development (Nabard).

The Finance Ministry has directed the Reserve Bank of India (RBI) to issue guidelines to commercial banks for activating the plan. RBI is also told to prompt commercial banks to extend poultry loans in West Bengal.

The state government estimates that the farmers lost nearly Rs500 crore, though only backyard poultry had been affected by the H5N1 virus. Banks have restructured the loans for the poultry farmers.

Aside from damage caused by bird flu, poultry farmers have also suffered from declining profit margins over the years due to rising feed costs.