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AGRICULTURAL CREDIT, AGRICULTURE - Coggle Diagram

- - - - • Short-term credit is the credit given to farmers to meet their short-term needs like purchasing seeds, fertilizers, paying wages to hired workers for a period less than 15 months etc. Such loans are usually paid back after harvest.
    - - The average loan taken by agricultural households indicated that 72 per cent of the credit requirement was met through institutional sources and 28 per cent from non-institutional sources.
        
        • Scheduled commercial banks contributed the major share (78 – 80 per cent) in agricultural and allied credit. The share of all co-operative banks/institutions (i.e. StCBs, DCCBs and PACS put together) constituted 15-16 per cent. RRBs contributed the remaining 5 per cent of the agricultural credit.
        
        • Crop loan accounts for more than 90 per cent of the total agricultural credit though its contribution to total output is approx. 60 per cent which means that the allied sector gets only 10 per cent of total credit while contributing the remaining 40 per cent of the total output.
        
        • The proportion of short-term crop loans to crop-related investment credit from 51:49 in the year 2000, drastically changed to 75:25 in 2018.
      - Government | RBI Initiatives in boosting Agri Credit
        
        Priority Sector Lending (PSL): RBI has earmarked 10% for Agriculture and 8% for small and Marginal Farmers.
        
        • Marginal Farmer: upto 1 ht. landholding
        
        • Small Farmer: more than 1 but upto 2 ht. of landholding.
        
        Interest Subvention Scheme: It was introduced for short-term crop loans in 2006-07. The 2 per cent interest subvention is reimbursed to banks (through RBI and NABARD) based on the funds released by the government against their claims. Besides 2 per cent interest subvention, 3 per cent prompt repayment incentive (PRI), introduced in 2009-10, is given reducing the cost of loan to 4 per cent.
        
        3. Kisan Credit Card: Look at the details given below.
    - - • Medium-term credit includes the credit facilities given to farmers for medium periods ranging between 15 months and 5 years. They extend for usually longer than short term credit and are mostly used for the purchasing of cattle, pumping sets, and other agricultural implements.
    - - • Long-term credit. When farmers require finance for a long period of more than 5 years for a long-term purpose, like buying additional land or making permanent improvement on the land like drilling of wells, reclamation of land, horticulture etc, it is termed as long-term credit.