What are agricultural loan schemes?

• The Kisan Credit Card (KCC) is a major credit facility for meeting cultivation and related financial requirements.
• Agriculture Infrastructure Fund (AIF) supports eligible post-harvest infrastructure and community farming assets.
• Agricultural credit may also support animal husbandry, fisheries, dairy farming, and other allied activities.
• Interest subvention or credit guarantee benefits may be available under specific schemes.
• Eligibility and documentation requirements vary between schemes and lenders.

An agricultural loan is a type of financing provided to farmers, agricultural businesses, and eligible individuals for farming and related activities. The loan can be used for purposes such as purchasing seeds and fertilisers, meeting cultivation expenses, buying agricultural equipment, developing irrigation facilities, and managing post-harvest requirements.

Depending on the loan type, agricultural financing may be available as a short-term crop loan, term loan, working capital facility, or project finance. The loan amount, interest rate, repayment period, and security requirements depend on the lender and the applicable scheme.

Agricultural loan schemes can be broadly classified based on the purpose of borrowing and the type of agricultural activity.

1. Crop loans

Crop loans help farmers meet expenses related to seasonal cultivation. These may include the purchase of seeds, fertilisers, pesticides, and other inputs, along with labour and other cultivation-related expenses.

2. Kisan Credit Card Scheme

The Kisan Credit Card (KCC) scheme provides timely and flexible credit support for cultivation and other eligible agricultural requirements. The facility may also cover working capital needs for certain allied activities, including animal husbandry and fisheries, subject to applicable guidelines.

The KCC framework is designed to provide farmers with a convenient credit facility for eligible agricultural needs. The credit limit and terms depend on factors such as the scale of finance, crop requirements, and the borrower's eligibility.

3. Agriculture Infrastructure Fund

The Agriculture Infrastructure Fund (AIF) supports eligible projects related to post-harvest management infrastructure and community farming assets. Eligible loans may receive interest subvention of 3% per annum on loans up to ₹2 crore for a maximum period of seven years, subject to the applicable scheme guidelines. Credit guarantee support may also be available for eligible borrowers.

4. Agricultural equipment loans

These loans help eligible borrowers finance the purchase of agricultural machinery and equipment. Depending on the lender and loan product, financing may be available for tractors, harvesters, irrigation equipment, and other eligible farm machinery.

5. Loans for allied agricultural activities

Agricultural credit may also support activities such as dairy farming, fisheries, poultry, animal husbandry, and beekeeping. The eligibility and financing terms vary depending on the activity and the applicable lending programme.

6. Post-harvest and warehouse financing

Farmers and eligible agricultural entities may require credit after harvesting to store, process, or market their produce. Certain credit facilities may support post-harvest requirements and help reduce the need for distress sales, subject to applicable scheme and lender conditions.

Agricultural loan schemes can help borrowers access organised credit for various farming and allied activities.

Access to timely credit

Agricultural financing can help farmers meet seasonal expenses when funds are required for cultivation and farm operations.

Support for farm development

Loans can help finance agricultural equipment, irrigation systems, farm assets, and other eligible investments.

Funding for allied activities

Eligible borrowers may access credit for activities such as dairy farming, fisheries, poultry, animal husbandry, and beekeeping.

Interest-related benefits

Some government-backed schemes may provide interest subvention or incentives subject to eligibility and applicable guidelines.

Credit guarantee support

Certain schemes may provide credit guarantee support for eligible borrowers, helping improve access to institutional financing.

Support for agricultural infrastructure

Infrastructure-focused schemes can help finance eligible post-harvest facilities and community farming assets.

Eligibility depends on the specific loan scheme and lender. Depending on the facility, eligible applicants may include:

• Individual farmers
• Small and marginal farmers
• Tenant farmers, subject to applicable eligibility conditions
• Sharecroppers, where permitted under the scheme
• Farmer Producer Organisations (FPOs)
• Self-help groups and joint liability groups
• Agricultural entrepreneurs
• Dairy farmers
• Fisheries and aquaculture operators
• Poultry and livestock owners

The documents required depend on the loan type, applicant profile, and lender. Commonly requested documents may include:

• Identity proof
• Address proof
• Passport-size photographs
• Land ownership or cultivation documents, where applicable
• Lease or tenancy documents, where accepted
• Bank account statements
• Income or agricultural income-related documents
• Details of the proposed agricultural activity
• Quotations for equipment or machinery, where applicable
• Business or project documents for infrastructure loans

Agricultural loan schemes provide structured financial support for farming, agricultural infrastructure, and allied activities. Facilities such as the Kisan Credit Card can help meet cultivation and working capital requirements, while infrastructure-focused programmes such as the Agriculture Infrastructure Fund support eligible post-harvest and community farming assets.

Before applying, borrowers should compare the purpose, eligibility criteria, interest rate, repayment terms, security requirements, and available benefits under the relevant scheme. Since scheme guidelines and benefits may change, the latest information should be verified through the official scheme portal or participating lender.