India has a thriving agricultural economy, which is the country’s foundation. The process of turning a seed into a finished good is known as farming. Many techniques, procedures and equipment are interested in advanced agriculture. However, most of India’s farmers have limited resources and need to opt for financial help to fulfil their requirements.
Agriculture in India includes various activities beyond crop farming, including animal husbandry, horticulture, floriculture, silk production, aquaculture, pisciculture, and apiculture.
A farming loan often covers the following areas:
- Management of daily farming functions
- Purchase of farming machinery
- Purchase of farming lands
- Managing storage facilities
- Trade of the products
- Conveyance costs from farms to markets
- Development of the agriculture sector
In addition, financial assistance programmes like grants and subsidies defend the farmer if crop loss is caused by weather or other circumstances.
The main goal of agricultural financial assistance is to supply credit flow for the country’s farming sector to operate efficiently. This has to do with output volume and productivity.
What are the eligibility criteria for Agriculture financial help in our country India?
Any farmer can apply for agricultural financial assistance, including small and marginal farmers, sharecroppers, oral lessees, and tenant farmers.
What are the Documents required for Agriculture financial help?
The set of documents required for availing of agricultural financial help is fundamental. These include:
- Valid Photo identity proof
- Valid address proof
- Proof of land ownership, payment receipts, a record of ownership etc.
- Kisan Credit card: This is issued to all the farmers
Specifications of the interest rate for the Agricultural Loan
Crop financial help :
According to the government of India regulations, the interest rate is 7% p.a. for crop financial assistance of more than Rs 3 lakh. However, if the farmers can repay the loan on time, a 3% interest subsidy is granted, making the interest rate 4% pa.
Beyond Rs 3 lakhs in financial assistance, interest is charged following RBI regulations. The RBI guidelines state that financial aid up to Rs 1 lakh is not subject to a security requirement. However, collateral is required for financial assistance over Rs 1 lakh.
Post-harvest :
The post-harvest loan has an interest rate of 7% with an interest rate subvention. However, the banks will impose commercial interest rates if the farmers use post-harvest financial assistance in exchange for negotiable warehouse receipts.
Land-purchase :
The interest rate for buying land up to five kilometres from the farmer’s home changes periodically. No margin is necessary for financial assistance up to Rs. 50 000. The margin requirement is 10% for financial aid exceeding Rs 50,000.
Types of Agricultural financial help
There are several alternatives in India for financial assistance with agriculture. Nationalized and private banks both offer financial aid with a variety of requirements. In addition, complete transparency in the processing, disbursement, and repayment of loans is guaranteed by government-recognized banks. This ensures that the underprivileged farmers are not taken advantage of and do not wind up making additional loan payments.
National Bank for Agriculture and Rural Development (NABARD)
The top bank for helping farmers financially is NABARD. In the 1980s, this financial institution imagined giving farmers financial aid. NABARD governs all Indian banks in terms of lending for agriculture. One of the significant programmes of the Indian government is the financial assistance given to farmers by NABARD. The Kisan Credit Card is one of NABARD’s most outstanding accomplishments.
Kisan Credit Card Scheme
A unique product called the Kisan Credit card was created to assist impoverished and illiterate farmers who aren’t very familiar with banking procedures. With the help of this card, farmers’ interests are meant to be safeguarded from predatory lenders who might charge them high interest. In addition, the farmer’s savings account is linked to this credit card. As a result, it can conveniently obtain financing for various agricultural activities such as farming, farm upkeep, tractor purchases, and many other activities.
Financial help from Nationalized Banks
Leading nationalized banks that support agriculture include Punjab National Bank, Union Bank of India, United Bank, Oriental Bank of Commerce, Dena Bank, and others. Most of these banks provide farmers with various services and inexpensive loan rates. In addition, these banks offer various services, including the building of rural godowns, debt exchanging, financing for warehouse receipts, etc.
Financial help from the State Bank of India
Many farmers have benefited from the State Bank of India’s assistance in successfully carrying out their agricultural tasks. The Kisan Credit Card, multi-purpose gold financial assistance, and gold loan crop production are only a few of the goods offered by the State Bank of India. Financial aid is also available for farming activities connected to raising poultry, dairy animals, or fish.
Private Sector Bank Agricultural financial help
Numerous top private sector banks provide farmers with end-to-end agriculture financing, including ICICI, Axis, HDFC, and others. These banks all offer both short- and long-term financial assistance.
To learn more about agriculture financial aids in India, you can enrol in the ffreedom app’s course “Personal Finance for Farmers” which will guide you in starting a solar farm business. Taking this course will prepare you for more success in business, and you’ll have the opportunity to learn from experts. We provide a wide range of courses and modules in business, finance, and farming that will help you develop extensive knowledge in these fields and advance your career.
Frequently Asked Questions: Agriculture finance
1. Can Agriculture Loan be used to purchase land?
Yes, it can be used to finance land purchases but only within a radius of 3-5 km of the farmer’s house or the village’s boundaries.
2. What are the other associated activities for which an Agriculture loan can be availed?
Purchase of land, tools, warehouse support for the produce and transportation are the allied activities for which agriculture financial help can be availed.
3. What is the amount of security required for availing agricultural financial help?
To boost agricultural financial help, banks have relaxed the norms for security and collaterals. As per the Government of India, there is no need for safety for financial assistance up to Rs 1 lakhs. However, individual banks set security norms for financial help exceeding Rs 1 lakhs.
4. Can women avail of agriculture financial help?
Yes, the Indian government promotes women obtaining finance for their agricultural requirements. As a result, some banks offer even more specialized services to female borrowers.
5. Can every farmer apply for a farm purchase loan?
Small or marginal farmers are eligible for this cash assistance. For example, this includes farmers who own 2.5 acres of irrigated land or 5 acres of non-irrigated land. Tenant farmers and farmers who work in cooperatives can also get financial assistance for buying land.
