Agriculture – Under (Priority Sector) :
Hitherto the agriculture advances were bifurcated into direct / indirect agriculture advances, however, in terms of revised guidelines issued by
Reserve Bank of India (RBI-2014-15/573 FIDD.CO.Plan.BC.54/04.09.01/2014- 15 dated April 23, 2015), the present distinction has been dispensed with and the lending to agriculture sector has been defined to include (i) Farm Credit (which will include short-term crop loans and medium/long-term credit to farmers) (ii) Agriculture Infrastructure and (iii) Ancillary Activities.
A list of eligible activities under the three sub-categories is indicated below:
(i)Farm Credit
A. Loans to individual farmers [including Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual farmers, provided banks maintain disaggregated data of such loans] and Proprietorship firms of farmers, directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture. This will include:
a. Crop loans to farmers, which will include traditional/non-traditional plantations and horticulture, and, loans for allied activities.
b. Medium and long-term loans to farmers for agriculture and allied activities (e.g. purchase of agricultural implements and machinery, loans
for irrigation and other developmental activities undertaken in the farm, and developmental loans for allied activities.)
c. Loans to farmers for pre and post-harvest activities, viz., spraying, weeding, harvesting, sorting, grading and transporting of their own farm
produce.
d. Loans to farmers up to Rs. 50 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months.
e. Loans to distressed farmers indebted to non-institutional lenders.
f. Loans to farmers under the Kisan Credit Card Scheme.
g. Loans to small and marginal farmers for purchase of land for agricultural purposes.
B. Loans to corporate farmers, farmers’ producer organizations/companies of individual farmers, partnership firms and co-operatives of farmers directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture up to an aggregate limit of Rs. 2 crore per borrower.
This will include:
a. Crop loans to farmers which will include traditional/non-traditional plantations and horticulture, and, loans for allied activities.
b. Medium and long-term loans to farmers for agriculture and allied activities (e.g. purchase of agricultural implements and machinery, loans
for irrigation and other developmental activities undertaken in the farm, and developmental loans for allied activities.)
c. Loans to farmers for pre and post-harvest activities, viz., spraying, weeding, harvesting, sorting, grading and transporting of their own farm
produce.
d. Loans up to Rs. 50 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12
months.
(ii) Agriculture Infrastructure
a. Loans for construction of storage facilities (warehouses, market yards, godowns and silos) including cold storage units/ cold storage chains
designed to store agriculture produce/products, irrespective of their location.
b. Soil conservation and watershed development.
c. Plant tissue culture and agri-biotechnology, seed production, production of bio-pesticides, bio-fertilizer, and vermi composting. For the above loans, an aggregate sanctioned limit of Rs. 100 crore per borrower from the banking system, will apply.
(iii) Ancillary activities
a. Loans up to Rs. 5 crore to co-operative societies of farmers for disposing of the produce of members.
b. Loans for setting up of Agriclinics and Agribusiness Centres.
c. Loans for Food and Agro-processing up to an aggregate sanctioned limit of Rs. 100 crore per borrower from the banking system.
d. Loans to Custom Service Units managed by individuals, institutions or organizations who maintain a fleet of tractors, bulldozers, well-boring
equipment, threshers, combines, etc., and undertake farm work for farmers on contract basis.
e. Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies (FSS) and Large-sized Adivasi Multi-Purpose Societies
(LAMPS) for on-lending to agriculture.
f. Loans sanctioned by banks to MFIs for on-lending to agriculture sector as per the conditions specified in paragraph 19 of these Master Directions.
g. Outstanding deposits under RIDF and other eligible funds with NABARD on account of priority sector shortfall.
Kisan Credit Card (KCC)
a) In terms of RBI Cir. No. RPCD:F.S.D. BC No. 77/05/09/2011-12 dt. 11.05.2012 revised scheme for issue of Kisan Credit card was introduced by
RBI which was subsequently modified vide cir. No. RBI/2012-13/162 ROCD:FSD.BC. No. 23/05.05.09/2012-13 dt. 07.08.2012.
b) The scheme was simple and hassle free for both the farmers and bankers. The scheme was aimed at providing adequate & timely credit support under single window to the farmers for their cultivation and other needs as indicated below:
Short term credit limits
i. To meet the short term credit requirement for cultivation of crops
ii. Post harvest expenses
iii. Produce marketing loan
iv. Consumption requirement of farmer household
v. Working capital for maintenance of farm assets & activities allied to agriculture like dairy, inland fishery etc.
Long term Credit Limit: Investment credit requirement for agriculture & allied activities like pump sets, sprayers, dairy animals etc
c) It may be noted that KCC is not a type of loan, but is a channel for granting either short term or long term agricultural finance.
Interest Application
a) Unlike normal loans, the interest on agricultural advances is not charged at monthly rests but is charged normally at half yearly or annual rests.
b) Compounding of Interest is generally not permitted in respect of an Agricultural advance, unless it turns out to be a non performing advance.
For the purpose of computation of achievement of the sub-target, Small and Marginal Farmers will include the following:
- Farmers with landholding of up to 1 hectare (Marginal Farmers). Farmers with a landholding of more than 1 hectare and up to 2 hectares (Small Farmers).
- Landless agricultural labourers, tenant farmers, oral lessees and sharecroppers, whose share of landholding is within the limits prescribed for small and marginal farmers.
- Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual Small and Marginal farmers directly engaged in
Agriculture and Allied Activities, provided banks maintain disaggregated data of such loans. - Loans to farmers’ producer companies of individual farmers, and cooperatives of farmers directly engaged in Agriculture and Allied Activities,
where the membership of Small and Marginal Farmers is not less than 75 per cent by number and whose land-holding share is also not less than 75 per cent of the total land-holding