Top 4 Farming Loans Available For Farmers In India

You’ve heard about Home Loans, Car Loans and Personal Loans. Now, check out the top farming loans available to Indian Farmers for all their agricultural needs.

If you enjoyed a hearty meal today, you should probably whisper a few words of gratitude to Indian farmers across the country. Agriculture, after all, is by far the biggest and most prevalent form of employment in India.

The history of agriculture in India dates back to the Indus Valley Civilisation era. Today, our country ranks second worldwide in farm output. Agriculture as well as allied sectors like forestry and fisheries accounted for 13.7% of the GDP (Gross Domestic Product) in 2013.

Without farming, our country wouldn’t have been able to produce and export USD 38 billion worth of agricultural products in 2013, making us the seventh largest agricultural exporter worldwide.

Additional Reading: The Indian Farmer And Budget 2013-14

India is the second largest producer of wheat, rice, cotton, sugarcane, silk, groundnuts, and other similar produce. We are also the second biggest harvester of vegetables and fruit in the world, accounting for 8.6% and 10.9% respectively of the world’s harvesting output. India also has the largest number of livestock in the world, totalling a whopping 281 million.

With such large numbers, our farmers definitely need financial support for various costs that they might have to incur. These costs include expenses related to preparing and ploughing the land, sowing, weeding, buying necessities like fertilisers, seeds, insecticides, farming equipment like tractors and much more.

To encourage our farmers, banks in India offer loans to farmers to help them cultivate their land so they may earn a living out of it. They can also use these farming loans to purchase land and agricultural tools for the cultivation and harvesting of crops.

Keeping these needs in mind, many banks offer loans and credit schemes to farmers to help them with their day-to-day agricultural needs.

Different Types Of Loans And Credit Schemes Available To Farmers

1. ICICI Bank Agri Term Loan:

   This loan offered by ICICI Bank is designed for farmers to buy cattle or agricultural equipment as a part of the Agricultural Term Loan. 

These loans can be repaid over a period of 3 to 4 years in monthly/half-yearly/ yearly instalments as per the farmer’s convenience. This type of loan is hassle-free since it requires simple documentation, has easy and convenient repayment options, no hidden charges and is processed quickly. To avail this loan you will need to submit a simplified application form, KYC documents, land documents, and security post-dated cheques. This loan is available at 13.50% interest rate (minimum).

Additionally, ICICI Bank also offers a Kisan Credit Card/Kisan Card to farmers. This card can be used at any ATM across the country.  All you need is a piece of agricultural land and you must be between the age of 18 – 70 years to be eligible to apply for this Credit Card.

2. Allahabad Bank Crop Loan and Term Loan:

   Allahabad bank offers two types of credit schemes to farmers and agriculturists.

• Akshay Krishi – Kisan Credit Card Scheme 

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 target group for this scheme is all farmers or individuals/joint borrowers who own farm land, owners/cultivators cultivating on a leased land along with self-cultivated land, tenant farmers, oral lessees and share croppers.

The credit limit on the Crop Loan Component is sanctioned for a period of 5 years, which is subject to renewal of the limit each year. The first year limit consists of production credit + 30% for contingency + 30% for domestic expenses. The limit for subsequent years is arrived at 10% of the limit towards cost escalation/increase in scale of finance up to the 5^th year.

The Term Loan component under this scheme is designed to meet the capital expenditure where the asset life is such that repayment in ensured within 9 years. The limit is restricted to seven times the annual surplus generated from present/proposed farm operations as well as allied activities of 50% of the value of land. The maximum limit on this term loan is Rs. 10 lakhs.

You can apply for this loan through your nearest bank’s branch.

• Allahabad Bank Potato Growers Credit Card Scheme

This scheme is specially designed to support potato cultivators and provide them with adequate and timely credit. Again, the target group for this is similar to that of the Akshay Krishi scheme as mentioned above.

The loan limit on this scheme is calculated based on the production credit requirement and the loan amount is arrived at 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.

The maximum limit on this term loan is set at Rs. 20 lakhs. This loan can be availed to buy farm equipment, purchase transport vehicles such as pick up vans or trucks and more.

3. Andhra Bank Agriculture Loans 

• AB Kisan Sampathi (Crop Produce Loan)

This scheme offered by Andhra Bank provides security to farmers against distress sale of crop produce soon after harvest when the prices of the commodities tend to be low. This loan can be availed by both loanee and non-loanee farmers.

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 MSP is not announced by the government, 65% of 3 months futures NCDEX Commodity Exchange Price) whichever is lower, subject to a maximum of Rs. 50 lakhs per farmer. Or, the limit will be arrived at based on the area of the crop cultivated by the farmer and yield there on.

The loan can be repaid within a maximum period of 12 months. This loan will require a collateral, but for loan amounts below Rs. 2 lakhs no collateral security is required.

• Kisan Kalpataru

This term loan is offered to farmers for all their credit requirements to carry out different farm activities like farm mechanisation, 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. This loan can be repaid within a period of 9 years. This loan also requires collateral security, but for a loan amount of up to Rs. 1.5 lakhs no collateral is required.

4. Punjab National Bank Agricultural Schemes

The Punjab National bank has several financial schemes that support farmers and agriculturists. You can visit their banking website to check out their various loans and finance schemes (https://www.pnbindia.in/agriculture-credit-schemes.html) 

• Scheme For Financing Poultry Farming

This scheme is mainly targeted for financing poultry farming, which includes investment credit for construction of sheds, purchase of equipment, purchase of chicks, fodder, medicines etc.

This loan can be availed by small farmers, landless agricultural labourers or any other persons who are under-employed and intend to supplement income through poultry.

However, one needs to have adequate land or shed where he/she proposes to establish this poultry farm. In order to be financed, a poultry unit should have a minimum size of 500 birds.

• Scheme For Financing Sheep/Goat Breeding/Rearing Activities

The purpose of this scheme is to provide financial assistance for purchase of sheep/goats of recognised breeds for the purpose of breeding and/or rearing them for wool, meat and milk production, construction of sheds for sheep/goats etc. This loan can also be used to purchase feed and purchase of equipment/tools.

Any small and marginal farmer(s) and agricultural labourer(s) desirous of undertaking sheep/goat breeding/rearing as subsidiary activity, or trained persons desirous of taking up the venture on commercial lines are eligible for this scheme.

This loan can be repaid within a period of 5 to 6 years in a quarterly/half-yearly/ yearly instalment.

Farming constitutes an integral part of our country and it must be encouraged since it benefits the entire nation. If you would like to benefit from some of the loans we offer, be sure to click on the button below.