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Agriculture credit.pptx
- 2. • Agriculture credit refers to the financing that farmers and other agricultural producers can obtain to help them with their farming operations. • This credit can come in many forms, including loans, lines of credit, and other types of financial products that can be used to purchase equipment, seeds, fertilizers, and other inputs. • Agriculture credit is essential for the development of the agricultural sector, as it enables farmers to invest in their businesses and increase their productivity. • In many countries, governments offer agriculture credit programs to support smallholder farmers, who may have limited access to financing from commercial banks.
- 3. DIRECT & INDIRECT AGRICULTURE CREDIT • Direct agriculture credit refers to loans and other financial products that are specifically designed for agricultural producers, such as farmers and ranchers. These loans are provided by financial institutions, such as banks, credit unions, or specialized agricultural lending institutions, directly to the farmers. • Indirect agriculture credit, on the other hand, refers to loans or other financial products that indirectly support agricultural production but are not specifically designed for farmers. These loans can be provided to processors, traders, and other agricultural supply chain actors who support the production, processing, and distribution of agricultural products.
- 4. KISAN CREDIT CARDS • Kisan Credit Cards (KCC) are a type of credit facility that is specifically designed for farmers in India. The Kisan Credit Card scheme was launched by the Government of India in 1998 with the aim of providing farmers with easy access to credit to meet their farming needs. • Under the KCC scheme, farmers are issued a credit card that can be used to access credit from banks or other financial institutions. The credit limit on the card is determined based on the farmer's landholding, crop pattern, and other factors. Farmers can use the credit card to purchase inputs such as seeds, fertilizers, pesticides, and other agricultural equipment
- 5. • The Kisan Credit Card scheme has several benefits for farmers, including lower interest rates, flexible repayment options, and easy access to credit. Farmers can also use the credit card to withdraw cash from ATMs and make other purchases, providing them with greater financial flexibility. • Overall, the Kisan Credit Card scheme has been an important tool for supporting agriculture in India and improving the livelihoods of farmers. The scheme has helped to increase agricultural productivity, promote rural development, and reduce poverty among farmers.
- 6. INVESTMENT CREDIT • Investment credit in agriculture refers to financing that is specifically targeted towards agricultural investments such as land acquisition, farm infrastructure development, purchase of farm machinery and equipment, irrigation systems, and other investments that improve agricultural productivity and profitability. • Investment credit in agriculture can be provided by various sources such as government-supported financial institutions, commercial banks, and other financial institutions that specialize in agricultural financing
- 7. • Investment credit in agriculture is crucial for the development of the sector, as it enables farmers and agricultural investors to make long-term investments in their businesses that enhance productivity, increase incomes, and create employment opportunities in rural areas. • The use of investment credit in agriculture can lead to increased agricultural production, improved food security, and enhanced economic growth in rural areas. It can also promote sustainable agricultural practices that conserve natural resources and reduce environmental degradation. • In summary, investment credit in agriculture is an important tool for promoting agricultural development, supporting the growth of rural economies, and improving the livelihoods of farmers and other agricultural investors.
- 8. Loans for Farm Mechanization and Minor Irrigation Schemes • In India, loans for farm mechanization and minor irrigation schemes are available through various government schemes and financial institutions. These loans are designed to support farmers who wish to invest in farm machinery and irrigation systems to enhance their agricultural productivity. • The government of India provides several schemes to support farm mechanization and minor irrigation, such as the Rashtriya Krishi Vikas Yojana (RKVY), Pradhan Mantri Krishi Sinchai Yojana (PMKSY), and the National Bank for Agriculture and Rural Development (NABARD).
- 9. • Under these schemes, farmers can avail loans for purchasing farm machinery such as tractors, power tillers, threshers, harvesters, and other implements. Similarly, farmers can also avail of loans for setting up minor irrigation systems such as wells, pumps, and sprinklers. • The loans for farm mechanization and minor irrigation schemes in India are offered at low-interest rates with flexible repayment terms, which are tailored to meet the unique needs of farmers. The loans are often secured against the agricultural land owned by the borrower or other forms of collateral. • These loans have several benefits for farmers, including increased productivity, reduced labor costs, and improved crop yields. The use of modern machinery and irrigation systems can also enhance the quality of crops and reduce the risk of crop failure due to drought or other weather-related events.
- 10. Dairy Loans -Agricultural advances for Production of Crops • Dairy loans are a type of agricultural loan that is specifically designed for farmers who wish to invest in dairy production. These loans are offered by financial institutions such as banks and other agricultural lending institutions to farmers who own or plan to own dairy animals, such as cows or buffaloes. • Dairy loans can be used to finance various aspects of dairy farming, including the purchase of dairy animals, the construction of dairy sheds, the purchase of feed, the installation of milking equipment, and other related expenses.
- 11. • These loans are often secured against the dairy animals or other forms of collateral and come with flexible repayment terms, allowing farmers to repay the loan over a period of several years. • In addition to dairy loans, agricultural advances for the production of crops are also available to farmers. These loans can be used to finance various aspects of crop production, including the purchase of seeds, fertilizers, pesticides, and other inputs. • Like dairy loans, agricultural advances for crop production are offered at low-interest rates with flexible repayment terms, and the loans are often secured against the crops or other forms of collateral. • Both dairy loans and agricultural advances for crop production are essential for supporting agricultural production in India. These loans help farmers to invest in modern technologies and inputs that enhance their productivity, increase their profitability, and improve their livelihoods.
- 12. Allied Activities Allied activities in agriculture refer to non-farming activities that are closely related to agriculture and can provide additional sources of income for farmers. These activities include: • Horticulture: This involves the cultivation of fruits, vegetables, flowers, and ornamental plants. Horticulture is a high-value crop that can provide farmers with significant income. • Sericulture: This involves the cultivation of silkworms for the production of silk. Sericulture is a labor- intensive activity that provides farmers with additional income. • Apiculture: This involves the cultivation of honeybees for the production of honey and other bee products. Apiculture can be a profitable activity for farmers, as honey and other bee products have high demand in the market.
- 13. • Animal husbandry: This involves the rearing of livestock such as cows, buffaloes, goats, sheep, and poultry. Animal husbandry can provide farmers with additional income through the sale of milk, meat, eggs, and other livestock products. • Fishery: This involves the cultivation of fish in ponds, tanks, and other water bodies. Fishery can provide farmers with additional income through the sale of fish and other aquatic products. • These activities also provide opportunities for entrepreneurship and innovation in rural areas, creating employment opportunities and contributing to the overall development of the rural economy.
- 14. Investment Credit - composite term loan against the mortgage of agricultural land, Land Purchase Scheme, financing for draught animals and carts, Debt Swap Scheme Investment credit in agriculture refers to the financial support provided to farmers for making long-term investments in agriculture, such as purchasing agricultural land, acquiring equipment, and modernizing their farming practices. Here are some examples of investment credit schemes in India:
- 15. • Composite term loan against the mortgage of agricultural land: This scheme provides farmers with a composite term loan that can be used for various purposes, such as purchasing agricultural equipment, inputs, and improving infrastructure. The loan is secured against the agricultural land owned by the borrower • Land Purchase Scheme: This scheme provides financial assistance to farmers for purchasing agricultural land. The loan is provided at a low-interest rate, and the repayment term is extended over several years. • Financing for draught animals and carts: This scheme provides financial assistance to farmers for purchasing draught animals such as bullocks and carts. The loan is secured against the animals and carts, and the repayment term is flexible.
- 16. • Debt Swap Scheme: This scheme allows farmers who are struggling to repay their existing loans to swap their high-interest loans with a low- interest loan from a financial institution. The scheme helps farmers to reduce their debt burden and improve their financial condition. Investment credit schemes play a crucial role in supporting agricultural development in India. They provide farmers with the financial resources they need to invest in modern technologies, improve their farming practices, and enhance their productivity and profitability.
Editor's Notes
- Both direct and indirect agriculture credit are important for the development of the agricultural sector. Direct credit supports farmers directly, while indirect credit supports the entire agricultural supply chain, providing farmers with access to markets, inputs, and other resources that are necessary for their success.
- RKVY scheme was initiated in 2007 as an umbrella scheme for ensuring holistic development of agriculture and allied sectors by allowing states to choose their own agriculture and allied sector development activities as per the district/state agriculture plan. The scheme has come a long way since its inception and has been implemented across two plan periods (11th and 12th). Till 2013-14, the scheme was implemented as an Additional Central Assistance (ACA) to State Plan Scheme with 100% central assistance. It was converted into a Centrally Sponsored Scheme in 2014-15 also with 100% central assistance. Government of India is committed to accord high priority to water conservation and its management. To this effect Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) has been formulated with the vision of extending the coverage of irrigation ‘Har Khet ko pani’ and improving water use efficiency ‘More crop per drop' in a focused manner with end to end solution on source creation, distribution, management, field application and extension activities. The Cabinet Committee on Economic Affairs chaired by Hon’ble Prime Minister has accorded approval of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) in its meeting held on 1st July, 2015.