You must be often enjoying your meals and thanking the almighty to bless the food you are consuming. Well you should say thanks to our farming community as well, since we are able to consume the cereals or pulses or grains only because of them. Most of us will know that Agriculture in India is the biggest sector in terms of providing employment. Without farming operations, do you think it was possible for India to emerge as the seventh largest exporters in agricultural commodities. We are the second largest producer of wheat, rice, cotton, sugarcane, silk, groundnuts, and other similar produce. India ranks second in world’s vegetables and fruit production, contributing roughly 8.6% and 10.9% respectively of the world’s output. We also have largest number of livestock in the world, with numbers reaching 281 million approximately.
In order to enable farmers to cultivate their land and earn a living, the private and nationalized banks provide loans, which can be used by the farmers to purchase land and agricultural tools for the cultivation and harvesting of crops. The loans and credit schemes offered by the banks play a vital role in managing their day-to-day agricultural needs.
Let us check out the four best agriculture loans available to Indian Farmers for meeting their agricultural needs.
1. Allahabad Bank Crop Loan & Term Loan:
Allahabad Bank has two types of credit schemes for financing the needs of farmers and agriculturists. They are:
Akshay Krishi – Kisan Credit Card Scheme
This scheme targets all farmers or individuals/joint borrowers who own farm land, owners/cultivators cultivating on a leased land along with self-cultivated land, tenant farmer etc. The objective of the Akshay Krishi – Kisan Credit Card Scheme is to provide adequate and timely support under a single window to farmers for their cultivation needs. The credit limit on the Crop Loan Component is sanctioned for a period of 5 years. The limit can be renewed every year. In the first year, the limit comprises production credit + 30% for contingency + 30% for domestic expenses. For subsequent years the limit is calculated at 10% of the limit towards cost escalation/increase in scale of finance up to the 5th year. Under this scheme the term loan component is framed in such manner so as to meet the capital expenditure. The maximum limit on this term loan is Rs. 10 lakhs and once can apply for this loan through his/her nearest branch.
Allahabad Bank Potato Growers Credit Card Scheme
The Potato Growers Credit Card Scheme is designed to support farmers of potato by ensuring timely and sufficient credit facility. This scheme targets all farmers or individuals/joint borrowers who own farm land, owners/cultivators cultivating on a leased land along with self-cultivated land, tenant farmer etc. Loan limit of this scheme is arrived at, on the production credit requirement and the loan amount is worked out by by adding contingencies of 30% of production credit, or on domestic purpose expenses calculated at 30% on production credit, or 30% of production credit, wherever the applicant is pursuing other activities under allied agriculture. Upside limit on this term loan is Rs. 20 lakhs and the loan can be availed to buy farm equipment, purchase transport vehicles like up vans, trucks etc.
2. Andhra Bank Agriculture Loans
AB Kisan Sampathi (Crop Produce Loan)
This scheme is aimed at providing security to farmers against distress sale of crop produce soon after harvest, in case commodity prices fall significantly. The loan amount is sanctioned at 65% of the average market rate for the last 3 years (as obtained from Agriculture Market Committee) or at government announced procurement prices. In case the MSP is not announced by the government, then 65% of 3 months futures NCDEX Commodity Exchange Price is considered, but whichever is lower, subject to a maximum of Rs. 50 lakhs per farmer. Otherwise the limit is worked out considering the area of the crop cultivated by the farmer and yield. Maximum repayment period of this loan is 12 months. This loan will requires collateral, for loan amounts only above Rs. 2 lakhs.
Kisan Kalpataru Loan
Eligible for farmers who have credit requirements to carry out different farm activities like farm mechanization, land development, minor irrigation, water conservation, horticulture, allied activities and other agriculture-related activities. The limit on this loan is fixed at 100% of the value of agriculture land or at a maximum of Rs. 25 lakhs. Maximum repayment period of this loan is 9 years and collateral is required for loan amounts only above Rs. 1.5 lakhs.
3. ICICI Bank Agri Term Loan:
This term loan is meant for farmers who have to purchase cattle or agricultural equipment. These loans can be repaid over a period of 3 to 4 years in monthly/half-yearly/ yearly installments. This loan starts with 13.50% interest rate and in order to avail this loan one needs to submit a simplified application form, KYC documents, land documents, and security post-dated cheques. The ICICI Bank also offers a Kisan Credit Card/Kisan Card to farmers, which can be used at any ATM across the country. Eligibility for the card is that one should have at least a piece of agricultural land and age of the concerned farmer should be between 18 – 70 years. This type of loan is hassle-free since it involves simple documentation, has easy and convenient repayment options with no hidden charges, and is processed in lesser time duration, versus most of the agricultural loans.
4. Punjab National Bank Agricultural Schemes
The Punjab National bank offers several financial schemes in favor of providing financial support to farmers and agriculturists. Two major schemes are:
Financing Poultry Farming Scheme
Under this scheme the target consumers are small farmers, landless agricultural laborers or any other persons who are under-employed and intend to supplement income through poultry. Finances for construction of sheds, purchase of equipment, purchase of chicks, fodder, medicines etc are provided in this scheme but eligibility is that the farmer should posses adequate land or shed where he/she intends to establish this poultry farm. Another condition for getting the finance is that the minimum size of poultry unit should be of 500 birds.
Financing Sheep/Goat Breeding/Rearing Activities Scheme
This scheme involves financial assistance for purchase of sheep/goats of recognized breeds for the purpose of breeding and/or rearing them for wool, meat and milk production, construction of sheds for sheep/goats etc. Purchase of feed and purchase of equipment/tools are also included in this scheme. Eligible persons are any small and marginal farmer(s) and agricultural laborer(s) planning to undertake sheep/goat breeding/rearing as subsidiary activity, or trained persons desirous of taking up the venture for commercial purpose. Maximum repayment period of this loan is of 5 to 6 years with mode of payment being quarterly/half-yearly or yearly.
