Agriculture – 09
AGRICULTURAL INFRASTRUCTURE FUND
The Union Cabinet in July 2020 has approved a new pan India Central Sector Scheme called Agriculture Infrastructure Fund. The scheme shall provide a medium – long term debt financing facility for investment in viable projects for post-harvest management Infrastructure and community farming assets through interest subvention and financial support. The duration of the Scheme shall be from FY2020 to FY2029 (10 years).
Under the scheme Rs. One Lakh Crore will be provided by banks and financial institutions as loans to Primary Agricultural Credit Societies (PACS), Marketing Cooperative Societies, Farmer Producers Organizations (FPOs), Self Help Group (SHG), Farmers, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups, Aggregation Infrastructure Providers and Central/State agency or Local Body sponsored Public Private Partnership Project.
- All loans under this financing facility will have interest subvention of 3% per annum up to a limit of Rs. 2 crore. This subvention will be available for a maximum period of seven years.
- Further, credit guarantee coverage will be available for eligible borrowers from this financing facility under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs. 2 crore. The fee for this coverage will be paid by the Government.
- In case of FPOs the credit guarantee may be availed from the facility created under FPO promotion scheme of Department of Agriculture, Cooperation & Farmers Welfare (DACFW).
- Moratorium for repayment under this financing facility may vary subject to minimum of 6 months and maximum of 2 years.
KISAN CREDIT CARD
The Kisan Credit Card is a government scheme that lets farmers borrow money from banks at concessional rates in the form of loans. The Kisan Credit Card Scheme was launched in the year 1998 to fulfil the financial needs of farmers in India. It is used for the following requirements:
- Loan at cheap rate of interest
- Post-harvest expenses
- Working capital to maintain farm assets and agriculture-related activities
- Investment credit for plantation, drip irrigation, land development, pump sets, etc.
- Farmers’ Consumption requirements
In 2020 announced a concessional credit of Rs 2 lakh crore to benefit 2.5 crore farmers through the Kisan Credit Card (KCC) scheme.
The government will undertake special drive to provide this credit to PM-KISAN beneficiaries through the Kisan Credit Card.
The Government has extended the facility of Kisan Credit Card (KCC) to the farmers practicing animal husbandry and fisheries related activities.
Collateral fee loan limit for short term agri-credit has been raised from Rs.1.00 lakh to Rs.1.60 lakh.
INTEREST SUBVENTION SCHEME
The interest subvention scheme for farmers aims at providing short term credit to farmers at subsidised interest rate. The policy came into force with effect from Kharif 2006-07. The scheme is being implemented for the year 2020-21.The interest subvention will be given to Public Sector Banks (PSBs), Private Sector Banks, Cooperative Banks and Regional Rural Banks (RRBs) on use of own funds and to NABARD for refinance to RRBs and Cooperative Banks. The Interest Subvention Scheme is being implemented by NABARD and RBI.
Under this scheme, the farmers can avail concessional crop loans of upto Rs.3 lakh at 7 per cent rate of interest. It also provides for an additional subvention of 3 per cent for prompt repayment within a period of one year from the date of advance.
The scheme will help farmers to avail short term crop loans up to Rs. 3 lakh payable within one year at only 4 per cent per annum. In case farmers do not repay the short term crop loan in time they would be eligible for interest subvention of 2% as against 5% available above.
Further, under Interest Subvention Scheme 2018-19, in order to provide relief to the farmers on occurrence of natural calamities, the interest subvention of 2% shall continue to be available to banks for the first year on the restructured amount. In order to discourage distress sale by farmers and to encourage them to store their produce in warehouses against negotiable receipts, the benefit of interest subvention will be available to small and marginal farmers having Kisan Credit Card for a further period of up to six months postharvest on the same rate as available to crop loan
PMFBY (PRADHAN MANTRI FASAL BHIMA YOJANA)
- The objective of the scheme is to provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases.
- This scheme provides insurance cover for all stages of the crop cycle including post-harvest risks in specified instances, with low premium contribution by farmers.
- There will be a uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5%. The premium rates to be paid by farmers are very low and balance premium will be paid by the Government to provide full insured amount to the farmers against crop loss on account of natural calamities.
- The use of technology will be encouraged to a great extent. Smart phones will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. Remote sensing will be used to reduce the number of crop cutting experiments.
- PMFBY is a replacement scheme of NAIS / MNAIS
- Farmers growing notified crops in a notified area during the season who have insurable interest in the crop are eligible.
- To address the demand of farmers, the scheme has been made voluntary for all farmers from Kharif 2020.
- The Scheme shall be implemented on an ‘Area Approach basis’ i.e., Defined Areas for each notified crop for widespread calamities.