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Agri Loans

Slew of agri, dairy schemes in Karnataka Budget, crop loans at 1%

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The Karnataka government has allocated Rs 17,857 crore for the development of agriculture, allied and irrigation sectors in its Budget 2011-12.  

The government has decided to take bold steps to solve the problems faced by agriculture, allied and irrigation sectors in the state. “In this direction, I propose to accord more importance to formulating appropriate schemes for the increasing numbers of the marginal and small farmers, addressing the lack of appropriate technology, providing essential and modern processing facilities, construction of godowns and cold-storages and organising partnerships with institutions having expertise and mobilising adequate capital for implementing these strategies along with formulating supporting policies,” stated chief minister B S Yeddyurappa, who presented the Budget in the State Assembly.. 

Several important steps to rejuvenate agriculture and its allied sectors are taken. An allocation of Rs 1,000 crore will be provided for development of 10 lakh farmer families under Suvarna Bhoomi Yojana. Crop loan will be made available at 1% interest to the farmers through co-operative credit institutions.

The government has also made an allocation of Rs 200 crore for organic farming, Rs125 crore is  provided for promotion of bio-fuels, Rs 100 crore will be provided for giving subsidy for drip irrigation and sprinkler, besides another  Rs 100  crore will be provided for giving subsidy for purchase of agricultural equipment.

A provision of Rs 40 crore has been provided for one modern mobile unit to each taluk for extension work in agriculture, horticulture and animal husbandry.

The state is making efforts to formulate the Karnataka Agri Business Development Policy. For this it has made efforts to establish Agriculture Infrastructure Fund of Rs 500 crore and increase the Agriculture Revolving Fund to Rs 1000 crore.

The government has provided Rs 3,900 crore for supplying quality power to irrigation pump-sets. For rejuvenation of tanks and for filling up of water in the dried tanks, an amount of Rs 1,000 crore will be provided. The government has allocated another Rs 100 crore for regularisation of one lakh unauthorised pump-sets. The state has also declared 2011-20 as “Irrigation decade,” and will mobilise Rs 50,000 crore for water resources development. 

There are several incentives offered to the rural cottage industries. These include a subsidy to   50,000 youths for starting bee-keeping industry.

Priority to transparency and computerisation of agricultural markets was announced. Further, a provision of Rs 5 crore for  construction of 50 fish markets, Rs 100 crore is set aside for the construction of small harbours and Rs 100 crore for construction of warehouses.

The Government has established 4 Bio-centres for developing high yield variety seeds.

Further, to promote horticulture, a separate university with 9 horticulture colleges and one post-graduate centre has been established. A Mango Board and Wine Board have been established for giving special attention to these valuable horticultural produce. 

There has been considerable improvement in the field of animal husbandry on account of various steps taken by the government in the last 33 months. There has been increased dairying activities going by the increased milk production in the state to 48 lakh tonnes from 41.24 lakh tonnes during 2006-07. For the establishment of a Mega Dairy with milk processing and cold-storage units at Chikballapura, an amount of ` Rs 10 crore is provided. In addition, an amount of Rs 10 crore is provided for establishing cold-storage units at Gulbarga and Belgaum.

To overcome the shortage of veterinary doctors, veterinary colleges have been established in Shimoga and Hassan districts. Administrative approval has been given for establishing veterinary colleges in Gadag district and in Athani.

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Loan scheme

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  • National Bank for Agriculture and Rural Development or NABARD(External website that opens in a new window) - is responsible for refinance disbursement to commercial banks, State cooperative banks, State cooperatives, rural development banks, Regional Rural Banks (RRBs) and other eligible financial institutions. It also sanctions money through its Rural Infrastructure Development Fund for projects covering irrigation, rural roads and bridges, health and education, soil conservation and drinking water schemes. NABARD also offers a Kisan Credit Card Scheme and crop loans under the Rashtriya Krishi Bima Yojana.
  • Banks and RRB's introduced the Kisan Credit Card Scheme of NABARD in their areas of operation. In this scheme eligible farmers are provided with a Kisan Credit Card and a passbook or card-cum-pass book. The revolving cash credit facility allows any number of withdrawals and repayments within the limit. This limit is fixed on the basis of operational land holding, cropping pattern and the scale of finance. Sub-limits may be fixed at the discretion of banks.
  • This Kisan Credit Card is valid for 3 years subject to annual review. As incentive for good performance, credit limits may be enhanced to take care of increase in costs, change in cropping pattern, etc. Each drawl should be repaid within a maximum period of 12 months. Conversion or rescheduling of loans is allowed in case of damage to crops due to natural calamities. Security, margin, rate of interest and other details are fixed according to RBI norms.
  • Bihar State Co-operative Bank Limited (BSCB)- External website that opens in a new window - Offers a range of loans and financial schemes to agriculturalists.
  • Haryana State Co-operative Apex Bank Limited (HARCOBANK)- External website that opens in a new window - The bank offers crop loans, Kisan Credit Cards, cash credit against hypothecation of stocks and interim finance by way of cash credit.
  • National Federation of State Co-operative Banks Limited (NAFSCOB)- External website that opens in a new window - This federation offers a range of agricultural loans through member State Cooperative Banks, District Central Cooperative Banks and Primary Agricultural Cooperative Societies.
  • Orissa State Co-operative Bank Limited (OSCB)- External website that opens in a new window - The bank has introduced Kisan Credit Cards in the S.T. Cooperative Credit Sector. It also organizes seminars on agri finance. OSCB has 17 Central Cooperative Banks and around 810 mini banks in different districts of Orissa.
  • Repatriates Co-operative Finance and Development Bank Limited (External website that opens in a new window)- This bank does not have any specific agricultural loan, but offers a range of financial products that can be accessed by people who wish to develop agriculture and related activities.
  • Punjab State Cooperative Agriculture Development Bank Ltd(External website that opens in a new window) - Initially, the bank only gave farmers loans to pay off old debts and purchase land. Today, the bank provides loans for various purposes like improvement of alkaline and saline lands, purchase of tractors, installing tube wells and other modern agricultural equipment. It also offers financial schemes for poultry development, dairy development, horticulture, floriculture, sheep rearing and inland fisheries.
  • Andhra Pradesh State Cooperative Bank Limited (APCOB)- External website that opens in a new window - has a loan portfolio that covers crop loans, medium term loans and long term loans for agricultural purposes. It also supports government sponsored District Rural Development Agency projects through IRDP loans and cooperative sugar factories, spinning mills, weaver's societies, employees' cooperative credit societies and other organizations. APCOB has also extended finance to apex cooperative institutions in the State such as APCO, MARKFED and GCC.


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Agri Loans

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Agricultural loans are available for a multitude of farming purposes. Farmers may apply for loans to buy inputs for the cultivation of food grain crops as well as for horticulture, aquaculture, animal husbandry, floriculture and sericulture businesses. There are also special loans to finance the purchase of agricultural machinery such as tractors, harvesters and trucks. Construction of biogas plants and irrigation systems as well as the purchase of agricultural land may also be financed through special types of agricultural finance. Here is some information about the kind of agricultural credit and loans provided by public sector banks in India.

State Bank of India(External website that opens in a new window)


State Bank of India presents a wide range of financial schemes for agriculturalists. These schemes include crop loans, Produce Marketing Loan Scheme, Loan Against Warehouse Receipts, Kisan Credit Card Scheme, agricultural term loans, Land Development Scheme, Minor Irrigation Scheme, Farm Mechanisation Scheme, Financing Of Combine Harvesters, Kisan Gold Card Scheme, Land Purchase Scheme, Krishi Plus Scheme, Arthias Plus Scheme, Dairy Plus Scheme, Broiler Plus Scheme, Finance To Horticulture, Lead Bank Scheme and Agri Business Heads Scheme. The Bank also provides Micro Finance through Self Help Groups and loans through 30 regional rural banks.

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