SAHAKARA SINDHU
Department Of Cooperation, Government of Karnataka

AGRICULTURAL CREDIT

1. Who are eligible to avail Agricultural loans through co-operative Societies?

    A farmer who is member of the PACS, PCARD bank are eligible to avail Agricultural loans.

2. How a farmer can get Agricultural loans through co-operative institutions?

        A farmer has to first enroll himself as Primary member in the co-operative institution by paying a membership fee and producing land records. Then     he will have to apply for sanction of NCL(Normal Credit limit) for three years. Quantum of Loan requirement will be ascertained based on the Land     holding and crop grown and he will be sanctioned NCL after the approval by the Board of directors of concerned District Central Co-operative Bank.     With in this NCL, a farmer will get crop loan depending on the funds available in the PACS and DCC Bank. Crop insurance is compulsory for a farmer     to avail crop loan. Premium of crop loan will range from 2.00 to 5.00 % of the loan amount. This will help him in case of loss of yield occurred due to     deficit or excess of rain fall, damage by pest and diseases and natural calamities. By renewing the KCC account, paying the crop insurance and     personal accident insurance premium every year, a farmer can minimize the risk of yield loss occurred due to seasonal weather fluctuation.

3. What are all the loans which come under the 3 % interest subsidy scheme?Does the loan taken by a farmer for construction of a House     from primary Agricultural Co-operative societies come under the 3 % interest subsidy scheme?

        Short term, Medium term and long term loans given for Agricultural and allied activities as classified by National Bank for Agricultural and Rural     Development (NABARD) will come under the 3 % interest subsidy Scheme. Loans given to the farmers for non agricultural purposes including     construction of a house will not come under the purview of this scheme.

4.Which are all the Co-operative institutions where 3 % Interest subsidy Loans are available ?

        A farmer can get the loans for the purpose of Agricultural and allied activities through Primary Agricultural credit co-operative Societies by what ever     name called like VSSN, RSSN etc, Primary Agricultural and Rural Development banks(PCARD Banks). This benefit is also available to the Weavers     taking loans from weavers Co-operative societies, Agricultural credit Co-operatives and Urban Co-operative Banks. Similarly the fisherman can     avail loans from fisherman co-operatives, urban banks and PCARD Banks.

5. What is the rate of interest a farmer has to pay and for what period interest subsidy is available?

        A beneficiary has to pay only 3 % interest per annum up to the due date or the end of the repayment period whichever is earlier. Government will     reimburse the differential rate of interest to financial institutions on behalf of farmers. If he fails to repay the loan on the due date of the loan to     Co- operative institutions, he has to pay the normal rate of interest as fixed by the institution. Hence this scheme is beneficial if the loanee repays the     loan amount with in the due date.

6. What are short term loans(Crop loans) covered under the scheme?

        The loans given under Kissan Credit Card for raising the crops for the period of 12 months to 18 months are classified as crop loans. A farmer can     operate the loan account when ever he wants i.e He can draw and remit the amount as many times as possible. Interest will be charged only on the     outstanding portion of the loan account. He can deposit his savings in to the KCC account and have credit balance also.

7.What are all the medium and long term agricultural Loans covered under the scheme?

        Loans given for creation of assets which will increase the production and productivity of agriculture and allied activities usually for a period of 3 to 5     years and 7 to 10 years are called as medium term and long term agriculture loans respectively as per NABARD classification.

8. Can a farmer get the benefit of the scheme on the loans taken by pledging the Agricultural produce?

        No, He can not get the benefit of the scheme for loans taken against pledging his produce as this is not classified as direct agricultural loan to the     farmers by NABARD

9. What is the Loan limit a farmer can get at 3 % interest rate?

         There is no upper limit as such to get the Agricultural Loans through Co-operative institutions. However he will get the loan based on his land holding     and crop grown according to the scale of finance fixed by District level technical committee which will comprise NABARD district level officer,     Officers from the Department of Agriculture, Horticulture, Sericulture, Fishery, Co-operation and farmers as well in case of short term loans and     indicative cost as fixed by NABARD in case of Medium and Long term Loans.