Agriculture is an important part of India’s economy supporting the livelihood of a majority of rural households. Despite its significance, small and marginal farmers many a times struggle to access adequate finance for their operations. To address these challenges, the government has introduced a range of subsidy schemes and concessional loans. Let's see an overview of key government agriculture loan schemes designed to support farmers in accessing credit.
Benefits of Availing Agriculture Loan Schemes
Getting timely access to credit helps farmers in numerous ways:
- Purchase good-quality seeds, fertilisers and equipment to enhance productivity
- Invest in irrigation infrastructure such as borewells, sprinklers, etc.
- Procure cattle and other livestock for dairy/poultry farming
- Build storage infrastructure, like warehouses, to store produce and prevent distress sales
- Repay existing high-interest debts to moneylenders
Thus, affordable agriculture loan schemes lead to greater investment capacity for farmers, higher output, improved income stability and make farming a sustainable livelihood option.
Major Government Schemes for Agriculture Loans
The government provides multiple loan schemes tailored to different needs and segments within the agriculture sector. Here are some of the primary schemes:
1. Kisan Credit Card (KCC) Scheme
The Kisan Credit Card scheme is one of the most popular and accessible schemes for farmers that aims to provide adequate and timely credit to farmers. The credit limit is fixed based on operational land holdings and cropping patterns. This scheme provides quick loans for crop cultivation, with the facility to withdraw money as needed. Loan amounts are based on the cropping pattern and scale of operations, and the card offers flexibility in terms of withdrawal and repayment.
2. Pradhan Mantri Fasal Bima Yojana (PMFBY)
Although primarily an insurance scheme, PMFBY also supports farmers with loans for crop insurance premiums. Under this scheme, farmers can get insurance coverage for their crops, safeguarding against natural calamities, pests, or diseases. Most importantly, financial support is provided through subsidised premiums, making it easier for farmers to afford insurance.
3. Soil Health Management (SHM) Scheme
This scheme aims to promote sustainable agriculture by improving soil fertility, which in turn helps increase agricultural productivity. Financial assistance is provided to improve soil health by applying fertilisers, organic farming techniques, and other sustainable farming practices.
4. Interest Subvention Scheme
Under this scheme, the government offers interest subvention on loans provided by financial institutions to farmers. This significantly reduces the interest burden on agricultural loans, making borrowing more affordable. Farmers can avail of loans at much lower interest rates than the market norm, ensuring easier access to credit.
5. Rashtriya Krishi Vikas Yojana (RKVY)
This scheme focuses on increasing public investment in agriculture and allied sectors with greater autonomy and flexibility given to states for planning and implementation. Components under the revamped RKVY include promoting modern technologies, irrigation infrastructure, and processing units, along with supporting agri-startups through grants and incubation programs. The budget for PM-RKVY and associated schemes runs into over ₹1 lakh crore, working through state governments.
6. National Mission on Agricultural Extension and Technology (NMAET)
This mission supports the establishment of agricultural extension services that guide farmers on the best agricultural practices and new technologies. Loans under this scheme help farmers implement innovative solutions, increasing productivity and farm profitability.
How to Apply for Agriculture Loans under Government Schemes?
Most public sector banks, regional rural banks and cooperatives provide agriculture loans under Government schemes. They also have specialised agriculture or rural banking divisions.
To apply, farmers need to submit relevant Know Your Customer (KYC) documents, land ownership records and latest revenue statements of land holdings. The application procedures have been simplified in most financial institutions. Nodal bank officers also assist farmers in selecting the most suitable loan product and scheme based on individual needs.
Online application options are also being increasingly provided across financial institutions to enhance last-mile connectivity.
Summing Up
Increasing the agriculture credit flow has been a policy priority to support smallholder farmers. Government subsidies on agriculture loans and structured products like KCC are helping broad-based institutional lending and financial inclusion. Progressive reductions in interest rates combined with flexible repayment options have enhanced loan affordability. Farmers seeking to make informed borrowing decisions can use the Shriram Finance Agriculture Loan EMI Calculator to estimate monthly payments and plan their investments more effectively for long-term growth.
There is significant awareness among India's farmers about the agricultural loan benefits. By availing suitable loan schemes, India's farm sector can gain greater access to credit and make necessary investments to enhance the productivity and viability of agriculture over the long term. This, in turn, contributes to farmer prosperity and builds sustainable rural livelihoods.
