CERTIFICATE OF ORIGINALITY

This is to certify that the project titled A STUDY ON AGRICULTURE LOAN

PRODUCTS OF VARIOUS BANKS AND FINANCIAL INSTITUTIONS IN

INDIA WITH SPECIAL REFERENCE TO UTTAR PRADESH is an original

work of the Student and is being submitted in partial fulfillment for the award of the

Masters Degree in Business Administration (MBA) of Indira Gandhi National

Open University (IGNOU). This report has not been submitted earlier either to this

University or to any other University/ Institution for the fulfillment of the requirement

of a course of study.

(RAM SINGH) (PRADEEP KUMAR)

SIGNATURE OF STUDENT SIGNATURE OFSUPERVISOR

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 ACKNOWLEDGEMENT

The pleasure and jubilation that go along with the successful

completion of any task would be imperfect without the mention of the

people who made it possible and whose constant supervision and

encouragement heads all efforts with success.

I acknowledge my gratitude towards Dr. Pradeep Kumar, my

guide for providing me insight and guidance for this projects despite the

demand made on his precious time. Without his efforts it would have been

difficult for me to complete this particular project.

RAM SINGH
Student

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 CONTENT

TOPIC PAGE NO.

CERTIFICATE OF ORIGINALITY

ACKNOWLEDGEMENT

APPROVED SYNOPSIS

PROJECT REPORT

INTRODUCTION 4

OBJECTIVES & RESEARCH METHODOLOGY 7

INDIAN AGRICULTURE SECTOR- AN OVERVIEW 10

UTTAR PRADESH AGRICULTURE POLICY-2013 27

FINANCING IN AGRICULTURE SECTOR 32

ANALYSIS & FINDINGS 75

SUGGESTIONS & CONCLUSION 97

REFERENCES 102

ANNEXURE 103

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 INTRODUCTION

(a) Agriculture Sector in India:

Agriculture plays a vital role in Indias economy. Over 58 per cent of the rural

households depend on agriculture as their principal means of livelihood. Agriculture,

along with fisheries and forestry, is one of the largest contributors to the Gross

Domestic Product (GDP). As per estimates by the Central Statistical Office (CSO),

Ministry of Statistics & Programme Implementation (MOSPI), Government of India,

the share of agriculture and allied sectors (including agriculture, livestock, forestry

and fishery) was 15.35 per cent of the Gross Value Added (GVA) during 201516 at

201112 prices.

India is the largest producer, consumer and exporter of spices and spice

products. India's fruit production has grown faster than vegetables, thus making it the

second largest fruit producer in the world. India's horticulture output, comprising

fruits, vegetables and spices, has reached to a record high of 283.5 million tonnes

(MT) in 2014-15. It ranks third in farm and agriculture outputs. Agricultural export

constitutes 10 per cent of the countrys exports and is the fourth-largest exported

principal commodity. The agro industry in India is divided into several sub segments

such as canned, dairy, processed, frozen food to fisheries, meat, poultry, and food

grains. The Department of Agriculture and Cooperation under the Ministry of

Agriculture, Government of India, is responsible for the development of the

agriculture sector in India. It manages several other bodies, such as the National Dairy

Development Board (NDDB), to develop other allied agricultural sectors.

Over the recent past, multiple factors have worked together to facilitate growth

in the agriculture sector in India. These include growth in household income and

consumption, expansion in the food processing sector and increase in agricultural

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exports. Rising private participation in Indian agriculture, growing organic farming

and use of information technology are some of the key trends in the agriculture

industry.

As per the 3rd Advance Estimates made by Department of Agriculture &

Cooperation, Ministry of Agriculture, Government of India, the India's food grain

production has increased marginally to 252.23 million tonnes (MT) in the 2015-16

crop year. Production of pulses is estimated at 17.06 million tonnes. With an annual

output of 146.31 MT, India is the largest producer of milk, accounting for 18.5 per

cent of the total world production. It also has the largest bovine (cattle) population.

Also India, the second-largest producer of sugar, accounts for 14 per cent of the

global output. It is the sixth-largest exporter of sugar, accounting for 2.76 per cent of

the global exports.

Spice exports from India are expected to reach US$ 3 billion by 201617 due

to creative marketing strategies, innovative packaging, strength in quality and strong

distribution networks. The spices market in India is valued at 40,000 crore (US$

5.87 billion) annually, of which the branded segment accounts for 15 per cent. In fact,

the Spices Board of India has decided to set up a spice museum at Willingdon Island

in Kochi to attract and educate tourists and seafarers about the history and growth of

Indian spices industry.

(b) Loan in Agriculture Sector:

Easy loans lead to more investment, production and profit. This is true even

for the agricultural sector. Since, the nation depends on this sector for food and

survival, it is vital that the government promote its growth. This is done by making

the provision of agricultural loans through various branches of both public as well as

private sector banks in India. These agricultural loans are generally provided at a

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comparatively lower rate of interest with simple terms of repayment. In 1981, the

government came out with the National Bank for Agriculture and Rural Development

Act that lead to the formation of National Bank for Agriculture and Rural

Development (NABARD). This organization is responsible for the flow of credit to

agriculture and related industries.

In the late 1990's, the government launched the Kisan Credit Card Scheme in

consultation with the Reserve Bank of India (RBI) and NABARD. This scheme is

meant to meet agricultural expenses of crop production, cultivation and contingency.

It allows unlimited withdrawals and repayments. The adaptation of the Kisan Credit

Card Scheme by different banks has lead to easy availability of agricultural credit and

an increase in agricultural productivity. Other than this scheme, different banks/

financial institutions offer a variety of other agricultural loan options.

In addition, there are various State Co-operative Banks, which also extends different

types of loans for agriculture sector. NABARD also provides refinance to State Level

Finance Corporations/ State Co-operatives/ Banks etc., against their loans granted to

agriculture sector.

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 OBJECTIVES AND RESEARCH METHODOLOGY

Rationale for the Study: The detailed characteristics of loans/ financing to farmers/

agriculture sector being offered by various banks and financial institutions in India,

more precisely in Uttar Pradesh (UP) need to be studied and their impact analyzed.

Further, the expected financial viability and risks involved in such loans/ financing to

farmers/ agriculture sector and possible measures required to make the same more

attractive.

Objectives of the Study:

1. To study the basic characteristics/ features of loans/ financing to farmers/

agriculture sector being offered by various banks and financial institutions in

India, more precisely in UP both in public as well as private sectors.

2. To analyze the impact of such loans/ financing to farmers/ agriculture sector in

general and particularly different segments of agriculture sector.

3. To find out the expected financial viability and risks involved in such loans/

financing to farmers/ agriculture sector by various Banks and financial

institutions in India, more precisely in UP.

4. To suggest possible measures required to make such loans/ financing to

farmers/ agriculture sector more attractive to the users/ beneficiaries.

Research Methodology: The research design for the project was of Exploratory cum

Descriptive type.

Method of data collection:

Primary Data: The primary data was collected through structured questionnaire to the

farmers/ entrepreneurs in agriculture sector in UP availing loans/ financing from various

banks and financial institutions and interviews/ discussions with the officials of different

banks (both public as well as private sector banks) and financial institutions in UP.

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Secondary Data: The secondary data was collected through:

Journals

Banks/ Financial Institutions Annual Reports

Banks/ Financial Institutions Brochures and Pamphlets

Text Books

World Wide Web

Sample Size: Sample size has been kept at 100 farmers/ entrepreneurs in agriculture

sector in U.P, who have availed/ availing loans/ financing from various banks (located in

Uttar Pradesh) and 20 managers/ officials of the different banks and financial institutions

(with their branches located in U.P) who are sanctioning such loans. Thus the total

Sample Size was 120.

Further Primary and Secondary data were analyzed on the basis of simple

statistical method i.e. Percentage method, Pie-Diagrams, bar charts/ graphs, etc.

The information gathered was also tabulated, properly analyzed and presented in the

final report.

Contribution of the Study: From the present study it may be possible to throw light

on the impact of loans/ financing to farmers/ agriculture sector, particularly in UP

being offered by various banks and financial institutions both in Public as well as in

Private sectors. Further, it may also be possible to find out financial viability and

various risks involved in respect of such loans/ financing to farmers/ agriculture sector

by different banks and financial institutions. The study is also expected to indicate the

possible measures required to make such loans/ financing to farmers/ agriculture

sector more attractive to the users/ beneficiaries in future and corrective actions (if

any) that may be required to be taken by the various banks and financial institutions in

this regard.
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Limitations of the Project: For every research there were restrictions and limitations.

Similarly there were some limitations in my research work, which were as follows:

It was difficult to gather all the information pertaining to loans/ financing to

farmers/ agriculture sector of various banks and financial institutions. In many

cases the concerned managers/ officials might not have provided information

about the crucial aspects of their organizational strategy.

Due to the busy time schedule there was difficulty in taking the appointment

with the farmers/ entrepreneurs in agriculture sector and managers/ officials of

the various banks and financial institutions.

Time was the biggest constraint. It was difficult to get the questionnaires filled

personally from all the respondents.

There were some people who might have different views so they might have

given incorrect/ false information in the Questionnaire.

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 INDIAN AGRICULTURE SECTOR AN OVERVIEW

Agriculture plays a vital role in Indias economy. Over 58 per cent of the rural

households depend on agriculture as their principal means of livelihood. Agriculture,

along with fisheries and forestry, is one of the largest contributors to the Gross

Domestic Product (GDP). As per estimates by the Central Statistics Office (CSO), the

share of agriculture and allied sectors (including agriculture, livestock, forestry and

fishery) was 15.35 per cent of the Gross Value Added (GVA) during 2015-16 at

2011-12 prices.

India is the largest producer, consumer and exporter of spices and spice

products. India's fruit production has grown faster than vegetables, making it the

second largest fruit producer in the world. India's horticulture output, comprising

fruits, vegetables and spices, is estimated to be 283.4 million tonnes (MT) in 2015-16

after the third advanced estimate. It ranks third in farm and agriculture outputs.

Agricultural export constitutes 10 per cent of the countrys exports and is the fourth-

largest exported principal commodity. The agro industry in India is divided into

several sub segments such as canned, dairy, processed, frozen food to fisheries, meat,

poultry, and food grains. The Department of Agriculture and Cooperation under the

Ministry of Agriculture, Government of India, is responsible for the development of

the agriculture sector in India. It manages several other bodies, such as the National

Dairy Development Board (NDDB), to develop other allied agricultural sectors.

Market Size: Over the recent past, multiple factors have worked together to facilitate

growth in the agriculture sector in India. These include growth in household income

and consumption, expansion in the food processing sector and increase in agricultural

exports. Rising private participation in Indian agriculture, growing organic farming

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10
and use of information technology are some of the key trends in the agriculture

industry.

As per the 3rd Advance Estimates, India's food grain production has increased

marginally to 252.23 million tonnes (MT) in the 2015-16 crop year. Production of

pulses is estimated at 17.06 million tonnes. With an annual output of 146.31 MT,

India is the largest producer of milk, accounting for 18.5 per cent of the total world

production. It also has the largest bovine population. India, the second-largest

producer of sugar, accounts for 14 per cent of the global output. It is the sixth-largest

exporter of sugar, accounting for 2.76 per cent of the global exports. India is a leading

country in coconut production and productivity in the world, with annual production

of 2,044 crores coconuts and the productivity of 10,345 coconuts per hectare as on

2015-16. Spice exports from India are expected to reach US$ 3 billion by 201617

due to creative marketing strategies, innovative packaging, strength in quality and

strong distribution networks. The spices market in India is valued at 40,000 crore

(US$ 5.87 billion) annually, of which the branded segment accounts for 15 per cent.

In fact, the Spices Board of India has decided to set up a spice museum at Willingdon

Island in Kochi to attract and educate tourists and seafarers about the history and

growth of Indian spices industry.

Indian agrochemical industry is expected to grow at 7.5 per cent annually to

reach US$ 6.3 billion by 2020 with domestic demand growing at 6.5 per cent per

annum and export demand at 9 per cent per annum*.

Investments: Several players have invested in the agricultural sector in India, mainly

driven by the governments initiatives and schemes. According to the Department of

Industrial Policy and Promotion (DIPP), the Indian agricultural services and

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agricultural machinery sectors have cumulatively attracted Foreign Direct Investment

(FDI) equity inflow of about US$ 2,278.3 million from April 2000 to March 2016.

Some major investments and developments in agriculture in the recent past are as

follows:

Intertek Group, a UK-based total quality assurance provider, has launched an

agricultural technology (Agritech) Laboratory in Hyderabad, which is going

perform high-tech deoxyribonucleic acid (DNA) analyses for the agri-biotech,

plant seeds.

ITC Ltd, one of India's leading fast-moving consumer goods (FMCG)

company, plans to make Andhra Pradesh a hub for its agricultural business

operations.

Mahindra and Mahindra Limited has acquired 35 per cent stake in a Finnish

combine harvesters manufacturer, Sampo Roselnew Oy, for US$ 20.46 million

and will jointly focus on the combine harvester business in Asia, Africa and

Eurasian Economic Union countries.

The Small Farmers Agri-Business Consortium (SFAC) plans to organize

camps in Madhya Pradesh and Chhattisgarh to promote its venture capital

assistance scheme (VCAS), which seeks to provide capital and project

development facility (PDF) to agri-business entrepreneurs.

Agri-research institute ICRISAT (International Crops Research Institute for

Semi Arid Tropics)s incubation arm is looking to set up a .100 crores (US$

14.67 million) fund in a year, an initiative that is expected to help small

entrepreneurs from the agri-business and nutrition space raise money.

Mahindra & Mahindra (M&M), Indias leading tractor and utility vehicle

manufacturer, announced its entry into pulses retailing under the brand
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 NuPro. Going forward, the company plans to foray into e-retailing and sale

of dairy products.

Fertilizer cooperative IFFCO (Indian Farmers Fertilizer Cooperative Limited)

launched a joint venture with Japanese firm Mitsubishi Corporation for

manufacturing agrochemicals in India.

Acumen, a not-for-profit global venture fund, has invested 11 crores (US$

1.7 million) in Sahayog Dairy, an integrated entity in the segment, based at

Harda district in Madhya Pradesh.

Rabo Equity Advisors, the private equity arm of Netherlands-based Rabo

Group, raised US$ 100 million for the first close of its second fund India

Agri Business Fund II. The fund plans to invest US$ 1517 million in 1012

companies.

Oman India Joint Investment Fund (OIJIF), a joint venture (JV) between the

State Bank of India (SBI) and State General Reserve Fund (SGRF), invested

95 crore (US$ 13.94 million) in GSP Crop Science, a Gujarat-based

agrochemicals company.

Government Initiatives: Given the importance of the agriculture sector, the

Government of India, in its Budget 201617, planned several steps for the sustainable

development of agriculture. Budget 2016-17 proposed a slew of measures to improve

agriculture and increase farmers welfare such as 2.85 million hectares to be brought

under irrigation, 287,000 crore (US$ 42.11 billion) grant in aid to be given to Gram

Panchayats and municipalities and 100 per cent village electrification targeted by May

01, 2018. The government has set an ambitious target of producing a record 270.1 MT

of food grains in 2016-17, 7 per cent higher than the 252.23 MT of production

estimated for 2015-16. The Government of India has started work on 99 major and
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medium irrigation projects, slated to be completed by 2019. These projects are

expected to bring 7.6 million hectares of land under irrigation in some of the most

drought-prone regions of India.

The Government of India has already taken steps to address two major factors

(soil and water) critical to improve agriculture production. Steps have been taken to

improve soil fertility on a sustainable basis through the soil health card scheme and to

support the organic farming scheme Paramparagat Krishi Vikas Yojana. Other steps

include improved access to irrigation through Pradhanmantri Gram Sinchai Yojana

scheme; enhanced water efficiency through `Per Drop More Crop scheme; continued

support to Mahatma Gandhi National Rural Employment Guarantee Act

(MGNREGA) and the creation of a unified national agriculture market to boost the

incomes of farmers.

The Government of India recognizes the importance of micro irrigation,

watershed development and Pradhan Mantri Krishi Sinchai Yojana; thus, it allocated

a sum of 5,300 crore (US$ 777.6 million) for it. It urged the states to focus on this

key sector. The state governments are compelled to allocate adequate funds to

develop the agriculture sector, take measures to achieve the targeted agricultural

growth rate and address the problems of farmers. The Department of Agriculture and

Cooperation under the Ministry of Agriculture, Government of India, has entered into

MOUs (Memorandum of Understandings)/ Agreements with 52 countries including

the US (United States). In addition, the Department of Agriculture Research &

Education (DARE) and the Department of Animal Husbandry, Dairying & Fisheries

(DAHD&F) under the Ministry of Agriculture, Government of India have signed

MOUs/ Agreements with other countries, taking the number of partnerships with

other countries to 63. These agreements are expected to provide better agricultural

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facilities in areas such as research and development, capacity building, germ-plasm

exchange, post-harvest management, value addition/ food processing, plant

protection, animal husbandry, dairy and fisheries. The agreements are expected to

help enhance bilateral trade as well.

Given the correlation between improvement in agriculture and the

development of the country, the Government of India adopted several initiatives and

programmes to ensure continuous growth. It allocated 25,000 crores (US$ 3.67

billion) for the Rural Infrastructure Development Fund (RIFD), 1,500 crores (US$

220 million) for the long-term rural credit fund, 45,000 crores (US$ 6.60 billion) for

the short-term cooperative rural credit finance fund and 25,000 crores (US$ 3.67

billion) for the short-term Regional rural bank (RRB) refinance fund. It also marked

an ambitious target of 8.5 lakh crores (US$ 124.71 billion) of agriculture credit

during 201516. Some of the recent major government initiatives in the agriculture

sector are as follows:

The government has drawn up a five-year roadmap to increase pulse

production from nearly 17.06 MT in 2015-16 to 24 MT in 2020-21 through a

dedicated action plan.

Prime Minister has unveiled the operational guidelines for the Pradhan Mantri

Fasal Bima Yojana which aims to provide farmers with crop insurance facility.

The Cabinet Committee on Economic Affairs (CCEA) has approved Blue

Revolution, an umbrella scheme for integrated development and management

of fisheries by Government of India, with total financial outlay of 3,000

crores (US$ 440.15 million) for a period of five years.

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 Minister of Power, Coal, New and Renewable Energy has announced that

Government of India plans to invest 75,000 crores (US$ 11.08 billion) in an

energy-efficient irrigation scheme over the next three to four years.

The new crop insurance scheme for farmers 'Bhartiya Krishi Bima Yojana'

aims to cover 50 per cent of the farmers under the scheme in the next two to

three years,

India and Lithuania have agreed to intensify agricultural cooperation,

especially in sectors like food and dairy processing.

Gujarat Government has planned to connect 26 Agricultural Produce Market

Committees (APMCs) via electronic market platform, under the National

Agriculture Market (NAM) initiative.

The State Government of Telangana plans to spend 81,000 crores (US$

11.88 billion) over the next three years to complete ongoing irrigation projects

and also undertake two new projects for lifting water from the Godavari and

Krishna river.

The National Dairy Development Board (NDDB) announced 42 dairy projects

with a financial outlay of 221 crores (US$ 32.42 million) to boost milk

output and increase animal production of milk.

Government of India has set up an inter-ministerial committee, which will

look into ways to examine the potential of Indian agriculture, identify

segments with potential for growth, and work towards doubling farm incomes

by 2022.

The Government of India has allocated 200 crores (US$ 29.9 million) for

electronically linking 585 major wholesale agriculture markets across the

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 country, thereby creating a National Agriculture Market (NAM) in July 2015

for three years.

Road Ahead: The agriculture sector in India is expected to generate better

momentum in the next few years due to increased investments in agricultural

infrastructure such as irrigation facilities, warehousing and cold storage. Factors such

as reduced transaction costs and time, improved port gate management and better

fiscal incentives would contribute to the agriculture sectors growth. Furthermore, the

growing use of genetically modified crops will likely improve the yield for Indian

farmers.

According to the National Institution for Transforming India Aayog (NITI

Aayog), Indias agriculture sector is expected to grow 6 per cent in FY 2016-17 in

case of normal monsoon during the June-September period. The 12th Five-Year Plan

estimates the food grains storage capacity to expand to 35 MT. Also, a 4 per cent

growth would help restructure the agriculture sector in India in the next few years.

Exchange rate used: 1 = US$ 0.0149 as of September 26th, 2016.

Note: * - as per a report jointly presented by Tata Strategic Management Group

(TSMG) and FICCI.

Organizational Framework for aiding development in Agriculture Sector: There

are various departments/ organizations under both Government of India and State

Governments, which have been created for aiding development in Agriculture sector.

The broad functions and major schemes of some of these departments/ organization

for aiding development in Agriculture sector are described below.

(a) Department of Agriculture and Cooperation: Department of Agriculture and

Cooperation (DAC) under the Ministry of Agriculture, Government of India, is the

nodal organization responsible for development of the agriculture sector. It is

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responsible for formulation and implementation of national policies and programmes

aimed at achieving rapid agricultural growth through optimum utilization of land,

water, soil and plant resources of the country.

It undertakes all possible measures to ensure timely and adequate supply of

inputs and services such as fertilizers, seeds, pesticides, agricultural implements and

also provides agricultural credit, crop insurance and ensures remunerative returns to

the farmer for their agricultural produce.

It is also entrusted with the responsibility of collection and maintenance of a

wide range of statistical and economic data relating to agriculture, required for

development planning, organizing agricultural census, assisting and advising the

States in undertaking scarcity relief measures and in management of natural

calamities such as, flood, drought, cyclone, etc. It also participates in activities of

international organizations, for fostering bilateral cooperation in agricultural and

allied sectors and for promotion of export in agricultural commodities.

The Department of Agriculture and Cooperation (DAC) is organized into 24

divisions and a 'Technology Mission on Oilseeds, Pulses and Maize'. It has 4 attached

offices; 21 subordinate offices; 2 public sector undertakings; 7 autonomous bodies;

and 11 national-level cooperative organizations under its administrative control. In

addition, two authorities, namely, the 'Protection of Plant Varieties and Farmers

Rights Authority' and the 'National Rain-fed Area Authority' have been set up.

Besides, the Department essentially supplements and complements the efforts being

made by the state governments to promote agricultural production and productivity.

Some of the more important functions discharged by it are as follows:

endeavoring adequate and timely supply of inputs and services such as

agricultural credit, fertilizers, pesticides, seeds and implements to the farmers;

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 administering the 'Crop Insurance Scheme' to provide relief to the farmers in

the event of crop failure;

laying down Minimum Support Prices (MSP's) for certain key agricultural

commodities to ensure food security in India and remunerative prices for

farmers;

assisting States in management of drought and to undertake scarcity relief

measures;

endeavoring to bring about the integrated development of marketing of

agricultural produce to safeguard the economic interests of the farming

community;

assisting the State Governments to improve agricultural extension services by

adopting new institutional arrangements through the involvement of NGOs,

farmers organizations and agricultural universities;

promoting plant protection measures through the dissemination of appropriate

information and technology;

working towards promoting measures for production of quality seeds and

distribution of improved plant varieties;

developing suitable strategies for rain-fed farming through, inter alia, peoples

participation for holistic and integrated development of potential watershed

and the promotion of a farming system approach for augmenting income and

the nutritional level of farming communities; and

Strengthening the cooperative movement through appropriate policy measures

and also through organizations like the 'National Cooperative Development

Cooperation (NCDC)', 'National Agricultural Cooperative Marketing

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 Federation of India Ltd (NAFED)' and the 'National Cooperative Union of

India (NCUI)', etc.

(b) Ministry of Food Processing Industries: The Ministry of Food Processing

Industries (MOFPI), Government of India, is the main central agency of the

Government responsible for developing a strong and vibrant food processing sector. It

has been set up with a view to create increased job opportunities in rural areas, enable

the farmers to reap benefit from modern technology, create surplus for exports and

stimulate demand for processed food.

The MOFPI acts as a catalyst and facilitator for attracting domestic & foreign

investments towards developing large integrated processing capacities , by creating

conducive policy environment, including rationalization of taxes & duties. It

processes applications for foreign collaborations, Export Oriented Units (EOUs), etc.

and assists/ guides prospective entrepreneur in their endeavors. The subjects being

looked after by the MOFPI are as follows:

Fruits and vegetable processing industry;

Food grain milling industry;

Dairy products;

Processing of poultry and eggs, meat and meat products;

Fish processing;

Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery

(including cocoa processing and chocolate), malt extract, protein isolate, high

protein food, weaning food; Alcoholic drinks from non-molasses base;

Aerated waters/ soft drinks and other processed foods;

Specialized packaging for food processing industries; and

Technical assistance and advice to food processing industry.

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(c) Various States Departments of Agriculture, such as Department of

Agriculture, Government of Uttar Pradesh: The department is concerned with

activities relating to policy decisions on agricultural production and productivity, its

extension through technology generation, transfer of technology, ensuring availability

and timely distribution of agriculture inputs specially seeds, fertilizers, subsidy, credit

etc. along with support service through soil testing, soil conservations, water

conservations, Seed testing, seed certification, plan production, quality control of

fertilizers and pesticides, etc.

Major Policy Initiatives: Several significant initiatives have been taken in recent

years by the Government in order to reverse the downward trend in agricultural

production. Some of these important initiatives include the following:

Bharat Nirman.

National Rural Employment Guarantee Programme (NREGP).

National Horticulture Mission.

Expansion of Institutional Credit to Farmers.

Establishment of the National Bee Board.

Establishment of the National Rain fed Area Authority.

Establishment of the National Fisheries Development Board (NFDB).

Watershed Development and Micro Irrigation Programmes.

Reforms in Agricultural Marketing and Development of Market Infrastructure.

Revitalization of Cooperative Sector.

Agri-business Development through Venture Capital Participation by the

Small Farmer Agri-business Consortium.

Reform and Support for Agriculture Extension Services.

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 National Rural Health Mission.

National Food Security Mission.

Rashtriya Krishi Vikas Yojana to incentivize the states to invest more in

agriculture.

Integrated Food Law.

Legislative Framework for Warehousing Development and Regulation.

The Protection of Plant Variety and Farmers Right Act, 2001 (PPVFR Act).

National Bamboo Mission.

Knowledge Connectivity through Common Service Centres (CSC).

Information Technology (IT) initiatives.

Major Schemes in Agriculture Sector: Some of the major schemes of Government

of India aiming towards development of Agriculture sector in India are as follows:

a) Rashtriya Krishi Vikas Yojana (RKVY): It was launched to incentivize the

States to increase the share of investment in agriculture in their State plans. It aims at

achieving the 4 per cent annual growth in the agriculture sector during the Eleventh

Five Year Plan period by ensuring a holistic development of agriculture and allied

sectors. It is a State Plan Scheme and the eligibility for assistance under the scheme

depends upon the amount provided in the State budgets for agriculture and allied

sectors, over and above the baseline percentage expenditure incurred on agriculture

and allied sectors. The funds under the RKVY are to be provided to the States as 100

per cent grant by the Central Government. The main objectives of the schemes are as

under:

Incentivize the States to increase public investment in agriculture and allied

sectors.

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 Provide flexibility and autonomy to the States in planning and executing

agriculture and allied sector schemes.

Ensure the preparation of plans for the districts and the States based on agro-

climatic conditions, availability of technology and natural resources.

Ensure that the local needs/crops/ priorities are better reflected.

Achieve the goal of reducing the yield gaps in important crops, through

focused interventions.

Maximize returns to the farmers.

Status of Release of fund for RKVY during 2016-17: The status (as on 27.09.2016)

of release of funds (Central Government share) for Rashtriya Krishi Vikas Yojana

(RKVY) scheme of Department of Agriculture & Cooperation, Ministry of

Agriculture, Government of India for some major states (including UP) is given

below:

Name of State Amount ( in Crore) & Release Date

Andhra Pradesh 111.89 (19.08.2016)
Chhattisgarh 90.06 (23.05.2016)
Jammu & Kashmir 16.16 (19.08.2016)
Karnataka 202.93 (28.07.2016)
Madhya Pradesh 155.13 (23.05.2016)
Maharashtra 200.24 (24.05.2016)
Manipur 11.86 (15.07.2016)
Nagaland 14.86 (19.08.2016)
Odisha 45.86 (23.05.2016)
Rajasthan 198.71 (14.07.2016)
Tamil Nadu 152.87 (24.05.2016)
Uttarakhand 23.56 (15.07.2016)
Uttar Pradesh 202.67 (27.09.2016)
West Bengal 233.90 (27.09.2016)
[Source: Website of RKVY]

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b) National Food Security Mission (NFSM): It is a centrally-sponsored scheme,

launched with the objective of increasing the production of rice, wheat and pulses by

10, 8 and 2 million tonnes, respectively, over the benchmark levels of production, by

the end of the Eleventh Five Year Plan period. The Mission aims at increasing food

grains production of the above crops through area expansion and productivity

enhancement; restoring soil fertility and productivity; creating employment

opportunities; and enhancing farm level economy to restore confidence of farmers of

targeted districts. It is being implemented in 305 districts of 16 States of the country.

c) National Policy for Farmers, 2007: Government of India has approved the

National Policy for Farmers, 2007 taking into account the recommendations of the

National Commission on Farmers and after consulting the State Governments. The

National Policy for Farmers, among other things, has provided for a holistic approach

for development of the farm sector.

The primary focus of this policy is on farmer defined holistically and not

merely on agriculture. In that sense, it is much more comprehensive than an

Agriculture Policy. The objective is, inter alia, to improve the economic viability of

farming through substantially improving net income of farmers. Needless to say, there

is emphasis on increased productivity, profitability, institutional support, and

improvement of land, water and support services apart from provisions of appropriate

price policy, risk mitigation measures and so on.

The major goals of the National Policy for Farmers are to:

Improve economic viability of farming by substantially increasing the net

income of farmers and to ensure that agricultural progress is measured by

advances made in this income.

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 Protect and improve land, water, bio-diversity and genetic resources essential

for sustained increase in the productivity, profitability and stability of major

farming systems by creating an economic stake in conservation.

Develop support services including provision for seeds, irrigation, power,

machinery and implements, fertilizers and credit at affordable prices in

adequate quantity for farmers.

Strengthen the bio-security of crops, farm animals, fish and forest trees for

safeguarding the livelihood and income security of farmer families and the

health and trade security of the nation.

Provide appropriate price and trade policy mechanisms to enhance farmers

income.

Provide for suitable risk management measures for adequate and timely

compensation to farmers.

Complete the unfinished agenda in land reforms and to initiate comprehensive

asset and Aquarian reforms.

Mainstream the human and gender dimension in all farm policies and

programmes.

Pay explicit attention to sustainable rural livelihoods.

Foster community-centered food, water and energy security systems in rural

India and to ensure nutrition security at the level of every child, woman and

man.

Introduce measures which can help attract and retain youths in farming and

processing of farm products for higher value addition by making it

intellectually stimulating and economically rewarding.

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 Make India a global outsourcing hub in the production and supply of the

inputs needed for sustainable agriculture, products and processes developed

through biotechnology and Information and Communication Technology

(ICT).

Restructure the agricultural curriculum and pedagogic methodologies for

enabling every farm and home science graduate to become an entrepreneur

and to make agricultural education gender sensitive.

Develop and introduce a social security system for farmers.

Provide appropriate opportunities in adequate measure for non-farm

employment for the farm households.

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 UTTAR PRADESH AGRICULTURE POLICY- 2013

The State Agriculture Policy- 2005 for Uttar Pradesh envisaged 4 per cent

growth rate in the agriculture sector. To achieve this, the Agriculture Policy

revolved around implementation of activities based on seven thrust areas,

called Sapt Kranti namely, extension, irrigation and water management, soil

health and fertility, seed management, marketing, research and agriculture

diversification. In Eleventh Five year plan, the state could achieve only 3.0 per cent

growth against the planned 4.0 per cent for agriculture sector. Since the

commencement of the existing agriculture policy, there has been a drastic change in

agricultural landscape of the state.

The continuous increase in population, injudicious exploitation of natural

resources, unplanned urbanization and industrialization, excessive use of agro-

chemicals and increase in consumerism has led to air, water, soil and noise

pollution, resulting in multi-dimensional problems. The Agriculture sector has

become a non-profitable business due to high costs of production, lack of post-harvest

management and processing facilities in the state and reduced economic returns,

particularly from small land holdings. Farmers are forced to migrate to urban areas in

search of alternate profitable activities, leaving agriculture in the process. Due to

inclusion of agriculture in the World Trade agreement, if necessary steps are not

initiated for making it a profitable venture by ensuring quality produce at low cost of

production, the situation of rural areas may become worse in the near future. The

changes in climatic conditions are also becoming a serious concern for agriculture.

There is partial scope for expansion of area under cultivation because of the limited

area available; however the quality of production can be increased through efficient

use of inputs, resources, capital and agricultural knowledge. In the agricultural

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sector, the exploitation of non-conventional energy resources along with

conventional resources will not only reduce the burden on conventional energy

sources but also improve the quality and productivity of agricultural produce, which

will help in increasing the overall income of farmers.

Therefore, in order to achieve the multidimensional potential of agricultural

development in the state, it has become imperative to make the necessary changes in

the present Agriculture Policy keeping in view the future challenges of the state.

Hence, the Revised Agriculture Policy of Uttar Pradesh - 2013 has been announced

by the State Government of UP, the major highlights of which are given below.

Vision:

Transforming the state into a Granary of the Nation by ensuring food and

nutritional security and to improve the quality of village life with inclusive and

sustainable growth

Mission:

To achieve 5.1 per cent growth in the agriculture sector.

To ensure conservation and efficient management of natural resources.

To encourage private sector participation in the field of agricultural research,

development, extension, input management and distribution, and agricultural

marketing.

Objectives:

To achieve a growth rate of 5.1 per cent in the agriculture sector.

To develop and popularize appropriate eco-friendly farming systems which

would improve the soil health as well as farm income.

To develop and conserve natural resources for maintaining ecological balance.

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 To increase the income of farmers through agricultural diversification towards

high value activities, while retaining the core-competence in area of food and

nutritional security.

To develop infrastructure facilities in sectors of seeds, fertilizers, pesticides,

agriculture implements, extension services, food processing and marketing by

promoting private sector involvement across the agricultural supply chain.

Strategies:

Increasing agricultural production and productivity by improving input use

efficiency, soil health and developing solid and waste lands.

Ensuring timely availability of quality inputs.

Reducing cost of cultivation by way of better crop management, use of cost

effective locally available inputs and adoption of new technologies.

Increasing the profitability of agriculture produce by way of value addition.

Promoting utilization of non-conventional energy resources.

Ensuring participation of private sector.

Encouraging development of infrastructure at rural level.

Promoting agriculture based industries in order to make landless labour self-

dependent and decreasing the dependency on agriculture.

Challenges Ahead:

To ensure food and nutritional security to the state population and increase the

productivity of agricultural crops under changing climatic conditions.

To improve the quality of crop production and reduce the cost of production of

agricultural produce, in context of the World Trade Agreement.

To ensure efficient management and conservation of natural resources.

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 To ensure clean and pollution free environment in order to maintain the

ecological balance.

To make small holdings profitable in order to ensure the prosperity of

small and marginal farmers.

To encourage participation of private sector in the agricultural sector,

through investments and Public-Private Partnerships

To promote agriculture based industries to increase the income and

employment of the rural population to reduce the dependence on agriculture

Proposed Interventions:

To achieve the envisaged growth rate during the XII Five Year Plan and thereafter

on sustainable basis. Major interventions proposed are as follows;

Regionally differentiated strategies will be pursued, taking into account the

agronomic, agro-ecological, environmental and socio-economic conditions to

realize the full growth potential of every region.

Ensure timely supply of quality inputs such as seed, planting material,

fertilizers and other agrochemicals, agriculture machinery, credit, insurance

etc. at reasonable rates on timely manner.

The government will endeavour to reduce the cost of cultivation through

enhancing input use efficiency and popularizing indigenous, cost effective and

location specific technologies.

Development of animal husbandry, dairying, poultry, Pisciculture,

Apiculture, Horticulture, Aquaculture, Sericulture and Mushroom cultivation

will receive a major thrust in the efforts for diversifying agriculture, increasing

animal protein availability in the food basket and for generating marketable

surpluses.
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 The regionalization of agricultural research on all 20 new agro-ecological

regions will be accorded high priority. Research and development on

frontier science like biotechnology, gene engineering and energy saving

technologies, remote sensing technologies, pre and post harvest technologies

and technology for environmental protection will be encouraged.

Emphasis will be laid on development of marketing infrastructure and setting

up of agro-processing units in the producing areas to minimize wastage,

especially of perishable produce and create off-farm employment

opportunities in rural areas.

Active support for the promotion of cooperative form of enterprises to ensure

greater autonomy land operational freedom and improve their functioning

will be the endeavour of the state government.

Promotion of private investment in agriculture and adoption of public-private

partnership (PPP) across agricultural supply chain for linking the farmers with

the market in efficient and effective manner.

Expected Outcome: With the commencement of proposed Agriculture Policy

2013, outcomes envisaged are;
Optimization of farm resources and improved environment.
Sustainable growth in agricultural production and productivity for
assured food and nutritional security.
Formulation and time bound implementation of need based programmes.
Transparency in implementation of programmes.
Introduction of new agro-based enterprises.
Increased role of private sector in state agriculture development.
Improved net economic return and family income.

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 FINANCING IN AGRICULTURE SECTOR

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.

There are various institutions/ organizations which provide finances in the

Agriculture sector, in the form of working capital or crop processing loans to the

farmers, loans for major investments and working capital to the entrepreneurs of agro

and/ or food processing industries, etc. These institutions/ organizations are as

follows: National Bank for Agriculture and Rural Development (NABARD), various

State Agricultural Cooperatives, Public and Private sector banks, etc. Here is some

information about the kind of agricultural credit and loans provided by public sector

banks/institutions in India.

National Bank for Agriculture and Rural Development (NABARD): NABARD

was set up in 1982 to implement the National Bank for Agriculture and Rural

Development Act 1981. It is an apex Development Bank with a mandate for

facilitating credit flow for promotion and development of agriculture, small-scale

industries, cottage industries, handicrafts and other rural crafts. It is also responsible

for allied economic activities in rural areas and securing the prosperity of rural areas.

The head office of NABARD is located in the city of Mumbai, Maharashtra.

NABARD operates through 28 Regional Offices and 336 District Offices located

across the country.

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NABARD's credit functions cover planning, dispensation and monitoring of credit.

This involves framing policy and guidelines for rural financial institutions, providing

credit facilities to issuing organizations, preparation of potential-linked credit plans

annually for all districts and monitoring the flow of ground level rural credit.

NABARD is also involved in creating awareness among borrowers on ethics of

repayment through Vikas Volunteer Vahini and Farmer's Clubs.

Supervisory Functions of NABARD include undertaking inspection of

Regional Rural Banks (RRBs), cooperative banks (other than urban/ primary

cooperative banks) and State Cooperative Agriculture and Rural Development Banks

(SCARDBs).

Types of Agricultural Loans in India:

We can categorize agricultural loans in 5 categories:

1. Farm Storage Facilities Loans or warehousing loan provided by government and

banks for storage of farm or agriculture commodities for non-perishable commodities.

2. Farm Operating Loans: agriculture loans for day-to-day needs or expansion

requirements.

3. Farm Ownership Loans: These include loans for buying agriculture or farming

machinery, livestock, tractors etc.

4. Fisheries Finance Program: This program is designed for specific projects in

fisheries that qualify under the direction of Congress. A qualified program is eligible

for up to 80 percent financing through a direct loan program. This loan program is

designed to refinance a private debt on a fishing vessel or to provide for maintenance

and repairs on an existing vessel.

5. Other Agriculture Loans: such as housing loans, grants, subsidy from

government for loss of crop, crop damage, whether based agriculture subsidy etc.

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State bank of India is a nationalized bank which channelizes all governmental

schemes to farmers. Various banks in India provide different crop loans, Kisan Credit

Cards (KCC), agriculture insurance schemes. Agricultural schemes for farmers are as

follows.

Crop loans: for raising various crops or development of crops.

Produce Marketing Loan Scheme: provides short term credit during

requirement at the time of crop selling.

Loan against Warehouse Receipts: farmer can get loans upto 70 per cent of

the value of goods for storage of agriculture commodities.

Kisan Credit Card Scheme: The Kisan Credit Card is a unique scheme for

farmers through which they can draw a cash loan for crop production as well

as domestic needs from the card-issuing branch within the sanctioned limit.

Kisan Shakti Yojana: provides farm investment credit, as well as

personal/domestic loans including repayment of debt to moneylenders. The

permissible loan limit will be 50 per cent of the value of land or 5 times the

net farm income, whichever is lower, less the outstanding amount.

Land Development Scheme: scheme for performing various activities for

developing existing land such as land leveling, reclamation of soil, bunding

and any other soil conservation measures etc.

Minor Irrigation Scheme: loans provided for digging new wells (open/ bore

wells), deepening existing wells, setting lift irrigation etc.

Farm Mechanization Scheme: various banks provide loans for purchasing

agriculture equipments, small and large farming machinery, tractors etc.

Financing of Combine Harvesters: provide loan for one farmer or group of

farmers for purchasing combine harvesters, heavy harvesting machines.

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 Land Purchase Scheme: the scheme assist small, marginal and landless

farmers or labourers for purchasing land.

Dairy Plus Scheme: scheme for establishment of dairy farm including

construction of shed, purchase of milch animals, milking machine and buying

other dairy equipments.

Broiler plus Scheme: scheme for construction of poultry shed, feeding room

and establishment of layer or broiler poultry farm.

Horticulture finance: include loans for development of fruit orchard, such as

mango, chikoo, grapes, pomegranate, apple etc. Also include loans for

polyhouse, green house development and marketing of such produce.

Agri Business Heads Scheme: the scheme provides self employment

opportunity to technically trained people for setting new agribusiness,

purchasing farm machinery etc.

Cost Associated with Agriculture Finance or Loan:

Reserve bank of India released circular regarding loans in India which states

that processing fee for agriculture loans should not be exceeding 1 per cent of the

gross loan amount and processing fee should not be included in the margin cap or the

interest cap of 26 per cent. Agriculture Loans are either direct or indirect. Direct

agriculture loans include 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 on such loans], directly engaged in Agriculture and

Allied Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and

sericulture. Indirect agriculture loans include loans to corporate including farmers'

producer companies of individual farmers, partnership firms and co-operatives of

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farmers directly engaged in Agriculture and Allied Activities, viz., dairy, fishery,

animal husbandry, poultry, bee-keeping and sericulture.

Processing fee of Kisan Gold card (saral) by HDFC is 250. Repayment

schedule charges for the same are 200 per request. Late payment penalty for KGC

types varies from 1.33 per cent to 2 per cent p.m. on overdue payment. Supervision

charges of KGC types range 500 to 2000.

Processing fee of Agriculture term loan from JK bank 0.05 per cent of the amount

sanctioned with a minimum cap of 25 to be paid up front.

Processing charges of agriculture gold loan by Canara Bank varies from no

charges (loan upto 25000) to 900 (Loan up to 3 lakh). Handling charges differ

from nil to 100. Mortgage charges vary from no charges to 30000. However

processing charges cannot be collected under conditions such as government

sponsored schemes, self-help groups or agriculture loans given to employees.

Processing fee of agriculture loan from ICICI bank is up to 4 per cent of the loan

amount. Late payment penalty is 2 per cent per month on unpaid installment.

Processing fee of agriculture loan in rural from Vijaya bank ranges from nil (

25000) to 0.16 per cent i.e. 102 ( 25000 to 2 lakh). There is no processing fee for

agriculture loan up to 10 lakh and no documentation charges for credit limit up to 2

lakh.

There are no processing and documentation charges for Kisan Credit Card-

Central Bank of India and no collateral security for loan up to 1 lakh. Government

of India has exempted farmers from paying stamp duty on agriculture loan up to 5

lakhs. Easy loans lead to more investment, production and profit. This is true even for

the agricultural sector. Since, the nation depends on this sector for food and survival,

it is vital that the government promote its growth. This is done through the provision

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of agricultural loans to farmers through branches of the various public and private

sector banks and State Cooperative Banks.

Financing of Agriculture Sector by Public Sector Banks:

The major types of loans/ financing facilities are being provided to Agriculture

sector by different public sector banks in India. Out of the various loan schemes of

different public sector banks for agriculture sector, the salient features of major

schemes of State Bank of India (SBI) and United Bank of India (UBI) [which are

quite active in the agriculture sector of UP] are discussed below in brief.

(A) AGRICULTURE LOAN FACILITIES OF STATE BANK OF INDIA (SBI):

The State Bank of India (SBI) provides number of financing/ loan facilities for

Agriculture sector, the major features of which are described below:

State Bank of India's branches have covered a whole gamut of agricultural

activities like crop production , horticulture , plantation crops, farm mechanization,

land development and reclamation, digging of wells, tube wells and irrigation

projects, forestry, construction of cold storages and godowns, processing of agri-

products, finance to agri-input dealers, allied activities like dairy , fisheries, poultry,

sheep-goat, piggery refurbished second hand tractors, loans against pledge of

warehouse receipts, loans against produce stored by the farmer at his own premises,

loans against book debts of Arthias, mulberry cultivation, rearing of silk worms and

grainages. In fact State Bank of India (SBI) can cover any other agricultural related

activities undertaken.

A. SBI Agricultural Gold Loans:

Purpose: Bank extends hassle free finance to farmers / agriculturists against Gold

Ornaments / gold wares to increase their liquidity to meet crop production expenses,

Investment expenses related to agriculture and / or allied agricultural activities.

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Eligibility: Any person engaged in agriculture or allied activities as well as persons

engaged in activities permitted to be classified under agriculture.

Quantum of Loan: Upto 70 per cent of the value of the ornaments .Value will be as

advised by the bank to the branches periodically.

Security: Pledge of gold ornaments.

How do customer repay:

Credit / Overdraft: Like Kisan Credit Card (KCC), it is a running account for a

period of 3 years.

Demand Loan / Term Loan: The repayment period of the loan should be fixed so as

to coincide with the harvesting and marketing season / generation of income from the

activity, allowing 2 to 3 months time after harvesting to market the produce and

realize the proceeds. However, the total period will not generally exceed one year

from the disbursement of the loan in the case of short-term loan / production credit

and 36 months in other cases.

How to apply for this loan: Contact your nearest Branch engaged in Agricultural

advance.

B. Kisan Credit Card (KCC) of SBI:

Purpose: To provide timely and adequate credit to farmers to meet their production

credit needs (cultivation expenses) besides meeting contingency expenses and

expenses related to ancillary activities through simplified procedure facilitating

availment of the loans as and when needed.

Who are eligible for the loan?

Owner cultivators, tenant cultivators and Share croppers.

Agricultural borrowers having good track record for the last 2 years (i.e.,

maintaining standard loan accounts).

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 Creditworthy new borrowers can also be financed.

Loan amount: Loan amount is based on operational land holding, cropping pattern

and ancillary and contingency needs of the farmer for the full year. 100 per cent of the

cultivation cost available as loan upto 50000 and 85 per cent of the cost as loan

above 50000. Expenses to meet important ancillary activities to production can also

be financed in addition to the above the total limit is inclusive of 20 per cent of

production credit, which includes crop production expenses and working capital for

allied agricultural activity, as contingency credit /consumption loan.

Disbursement of the Loan: As per the cultivation requirements of the crop, the loan

will be disbursed in cash.

Security:

Loan amount upto 50000 Hypothecation of Crops.

(1) Hypothecation of crops.
Above 50000 upto 100000
(2) Mortgage of land or third party guarantee *
(1) Hypothecation of crops
Above 100000
(2) Mortgage of lands

[*For loans up to 1 lac to farmers having legal ownership of agricultural lands with good track record
for last 2 years, no collateral is required]

How do customer repay: It is a revolving cash credit limit with any number of

withdrawals and repayments and Limit is valid for 3 years.

How to apply for the loan: You may contact our nearest braches engaged in

agricultural advance or even talk to the marketing officers visiting village.

C. Produce Marketing Loan:

Purpose:

To help farmers avoid distress sale of their produce

To enable prompt repayment of crop loan dues and provide liquidity to

farmers to meet contingency needs.

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 To offer the facility of loan against the stocks stored in farm houses, in

addition to loan against warehouse receipts.

Who are eligible for the loan?

1. All non-defaulter borrowers of our branches, who can store the produce either

in their own farm/premises itself or in a Warehouse / cold storage.

2. Crop loan borrowers of other Banks and also Non-Borrower Farmers, who

store their produce/ stocks in a Warehouse / cold storage.

Loan amount: 60 per cent to 80 per cent of value of produces depending upon the

place of storage subject to a maximum of 10 lakhs.

Documents you need to produce: Stock statement for valuation and evidence of

stocks at your residence/ godown Warehouse receipt, duly endorsed, if stocked at

warehouse.

Security:

1. Loan sanctioned against goods stored in Farmers godown:

Primary: Hypothecation of stocks.

Collateral: Mortgage / Charge over Land or Third Party guarantee for loans above

50,000.

2. Loans sanctioned against Warehouse Receipts (WHR) :

Primary: Pledge of stocks.

Collateral: No collateral is required for loans up to the maximum permitted limit of

10 lakhs under the scheme.

Disbursement: After liquidating the crop loan, surplus will be disbursed in cash.

How to repay?

Loan has to be repaid within a maximum period of 12 months depending upon the

crop.

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How to apply for this loan: The customer needs to contact his/ her Bank Branch

Manager/ Field staff.

D. Kisan Gold Card Scheme (KGC) of SBI:

KGC is a general-purpose loan meant for meeting credit needs of farmers for

productive and consumption purposes. Consumption loans to meet domestic expenses

like Childrens education, marriage, medical expenses etc will be included to the

extent of 20 per cent of the limit.

Who are eligible?

Farmers with excellent repayment record for at least past 2 years, new farmers with

sizeable deposits with our branches for 2 years, .good borrowers with other banks,

farmers who have closed accounts are eligible for this loan.

Loan amount: Loan amount is fixed on the basis of Five times the annual farm

income or 50 per cent of the value of land (to be) mortgaged as collateral security,

whichever is less, with a maximum of 10 lakhs.

Documents you need to provide: Land records, other than that is already given to

the bank, encumbrance certificates, if required.

Security:

(a) Upto 50000/ Hypothecation of assets created.

Hypothecation of assets and mortgage of land Or
(b) Above 50000 to 100000
Third party guarantee

Hypothecation of assets and mortgage/ Charge over

(c) Above 100000/
land or any other tangible security

How do you repay: Repayment will be in Quarterly/Half yearly/Yearly installments

depending on the harvest of the crops or the liquidity created by the agriculture

activity undertaken with a maximum of 6 -7 years However, the limits availed for

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setting up of Horticultural Orchards can be repaid over a period of 9 years from the

date of sanction.

How to apply for this loan: You may contact our nearest branch or talk to the

marketing officers.

E. Financing by SBI for setting Up of Agri-Clinic and Agri Business Centres:

Purpose: The scheme is to provide self employment opportunities to technically

trained persons and to augment extension services for agriculture.

Who are eligible for this loan?

Agricultural graduates / graduates in subjects allied to agriculture like horticulture,

animal husbandry, forestry, dairy, veterinary, poultry, Pisciculture and other activities.

List of Ventures:

1. Soil and water quality cum inputs testing laboratories.

2. Post surveillance, diagnostic and control services.

3. Maintenance, repairs and custom-hiring of agricultural implements &

machinery of Micro irrigation system.

4. Agri service centers including the above 3 activities (group activities).

5. Seed processing units.

6. Micro propagation through plant tissue culture lab & hardening units.

7. Setting up of vermiculture units, production of Bio-Fertilizers, Bio-Pesticides

(Bio control agents)

8. Setting up apiary (bee keeping) & Honey, Bee Products, processing of units.

9. Facilitation and agency of Agri. Insurance Services.

10. Provision of extension, consultancy services.

11. Hatcheries and production of Fish-Fingerlings for Aquaculture.

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 12. Provision of livestock health cover, setting up veterinary dispensaries &

services including frozen, Semen Banks & Liquid Nitrogen supply.

13. Setting up of information technology kiosks in rural areas for access to various

agriculture related portals.

14. Feed processing and testing units.

15. Value addition units.

16. Setting up of cool chain from the farm level onwards (group activity).

17. Post harvest management centers for sorting, grading, standardization, storage

and Packaging.

18. Setting up of metallic / non-metallic storage structure (Group Act).

19. Retail marketing outlets for processed Agri products.

20. Rural marketing dealership of farm inputs and outputs. Any combination of 2

or more above viable activities along with any other economically viable

activities selected by the graduates, which is acceptable to the bank

Loan amount:

Individual Activity 10 lakhs

The Group Activity up to 50 lakhs (maximum). In case of group projects, if the

group consists of 5 or more persons, all except one of them would have to be

agriculture graduate trained under the scheme and the remaining could be non-agri

graduate with experience in business development and management.

Loan amount for loans upto 5.00 lakhs 100 per cent Loans above 5 lakhs up to 85

per cent of the cost

Soft Loan Assistance: 50 per cent of margin to be contributed by the applicant is

provided by National Bank for Agriculture and Rural Development (NABARD) as

Soft loan without any interest.

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Subsidy: Credit linked capital subsidy @ 25 per cent of the capital cost of the project

funded through bank loan would be eligible. This subsidy would be 33.33 per cent in

respect of borrowers belonging to SC, ST, women and other disadvantaged sections

and those from North-Eastern and Hill States. In addition to the above subsidy, full

interest subsidy would be eligible for the first two years of the project. The capital

subsidy will be back-ended with minimum 3 years lock-in period. The interest

subsidy would, however, be concurrent.

Security:

Up to 5.00 lakhs Hypothecation of assets created.

Hypothecation of assets created and Mortgage of land
Above 5.00 lakhs
or Third party guarantee.

How to repay the loan: The loan should be repaid in 5-10 years with grace period of

maximum 2 years.

How to apply this loan: You may contact our nearest branch for the application and

produce your certificates of qualification and experience, if any.

F. SBI Land Purchase Scheme for Farmers:

Purpose: To assist Small and Marginal farmers and landless agricultural labourers for

purchase of Land, who are banks existing borrowers to consolidate land holdings and

development of Wasteland and fallow lands.

Who are eligible?

i. Small & Marginal Farmers owning less than 5 acres of unirrigated or 2.5 acres

of irrigated land in their own names, landless agricultural labourers.

ii. The borrowers should have a record of prompt repayment of the loan for at

least two years.

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 iii. Good borrowers of other Banks are also eligible provided they liquidate their

Outstanding to other banks.

Loan amount: Loan may be considered for:

i. Cost of land

ii. Provision of irrigation facilities & land development (shall not exceed 50 per

cent of the cost of the land).

iii. Purchase of farm equipments.

iv. Registration charges & stamp duty.

Loan amount will be 85 per cent of the cost of the land, as assessed by the bank,

subject to the maximum of 5 lakhs.

Security: Mortgage of land to be purchased.

How to repay the loan: Max. 9-10 years beginning after the expiry of gestation

period, with half-yearly installments. Gestation period will be maximum 1 year for the

developed land and 2 years for the land to be developed.

How to apply for this loan: Contact your Branch You may contact our nearest

branch or talk to the marketing officers visiting your village.

G. Scoring Model for Tractor Loans:

Purpose: Agricultural term loans are sanctioned for purchase of new tractors,

accessories and implements.

Who are eligible for tractor loan?

Agriculturists (individually or jointly) and Persons offering security like

National Savings Certificates (NSCs), Kisan Vikas Patras (KVPs), the Banks Fixed

Deposits, surrender value of Life Insurance Corporation (LIC) policy, gold ornaments

etc. to cover more than 60 per cent of the loan amount are eligible for the loan .The

applicants should score minimum score of 40 under the Scoring model of the bank.

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Loan amount: Up to 95 per cent of the cost of the Tractor, trailer and accessories

(Depend on the scores in the scoring model). The cost includes the Registration

charges and insurance premium not exceeding 15,000. Additional loan equal to 10

per cent of tractor loan for repairs may be provided for at the time of sanction. Bank

will finance only for those models of tractors which have completed the commercial

test from organizations viz. Central Farm Machinery Training and Testing Institute

(CFMTTI) Budni (Madhya Pradesh) or Farm Machinery Training and Testing

Institute (FMTTI), Hissar.

Security:

1. Hypothecation of the tractor, accessories and implements. Noting of Banks

hypothecation charge in the RC Book of the tractor is compulsory in all the

cases.

2. Collateral Security like NSCs (National Savings Certificates), KVPs (Kisan

Vikas Patras), Banks Fixed Deposits ,Surrender value of LIC policy etc OR

Mortgage of agricultural lands .However no collateral security is required, if

the score is 70 and above on the scoring model of the bank

How to repay the loan: Within a maximum period of 9 years, including a grace

period not exceeding 12 months. The installments shall be payable half-yearly /

yearly, coinciding with the harvesting and marketing period of the crops proposed to

be grown by you

How to apply for this loan: You may contact our nearest branch or talk to the

marketing officers visiting your village.

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H. Financing of Second Hand/ Used Tractors Scheme by SBI:

SBI - Mahindra Vishwas, SBI TAFE Nayaroop:

Purpose: Loans provided for the purchase of second hand tractors refurbished by

Mahindra & Mahindra and Tractors and Farm Equipments Limited (TAFE), Tractors

which are up to 7 years old

Who are eligible?

Individual farmer or a group of farmers not exceeding three in number (as co-

borrowers) owning minimum 3 acres of perennially irrigated agricultural land. In case

of co-borrowers the land should be in same area.

Loan amount: Upto 85 per cent of the cost. The cost will be based on the price fixed

by the company for each tractor after refurbishing. The overall maximum limit will be

2.50 lakhs including the cost of implements. The implements purchased shall be

new.

Security:

Loan up to 50000 Hypothecation of tractor and accessories.

1) Hypothecation of tractor and accessories

2) Mortgage of the land of the farmer or any
Above 50,000 other tangible Security to cover at least 50 per
cent of the loan amount or suitable third party
guarantee.

How to repay the loan: The loan amount including interest shall be repayable in

half-yearly/yearly installments coinciding with the harvest of crops grown. The

repayment of loan amount should be completed before the expiry of 9 years from the

date of original purchase of the tractor inclusive of a maximum gestation period of

one year.

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How to apply for this loan: The customer may contact our nearest branch or talk to

the marketing officers visiting his/ her village.

I. Financing Power Tillers by SBI:

Who is eligible?

Individual Farmers or a group of not more than 3 farmers owning 2 acres of

perennially irrigated land (contiguous / nearby)

Loan Amount: Up to 90 per cent on the total cost of power tiller plus accessories.

Security:

a. For loans upto 50,000 Hypothecation of Power tiller, accessories, implements

and trailer purchased out of Banks finance.

b. For loans above 50,000 and upto 2.00 lakhs: Hypothecation of Power tiller,

accessories, implements and trailer purchased out of Banks finance and mortgage on

land/ One third party guarantee, good for the amount involved or any other acceptable

collateral security like NSCs, Banks own term deposits, Kisan Vikas Patras, Indira

Vikas Patras, gold, urban property, surrender value of LIC Policy; the value of it

should be at least 50 per cent of the loan amount.

c. For loans above 2 lakhs: Hypothecation of Power tiller, accessories, implements

and trailer purchased out of Banks finance and mortgage of land.

How to repay the loan: Repayment will be half yearly/ yearly installments with the

Maximum 9 years, with one year as gestation period.

How to apply for this loan: The customer may contact our nearest branch or talk to

the marketing officers visiting your village.

J. Financing For Combine Harvesters by SBI:

Purpose: Finance is given for the purpose of combined harvesters'. Makes in the

approved list of the bank will only be financed.

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Who are eligible?

a. For self propelled Combine Harvester:

1. Farmers who are in a position to operate the Harvester successfully and owning

minimum of 8 acres of irrigated land (corresponding acreage for other types of land).

2. Farmers owning lesser acreage than that prescribed above, are also eligible for

availing combine harvester loans provided they could operate the harvesters

successfully and generate sufficient income .Additionally they should provide

additional collateral security like national Savings Certificates (NSCs), Bank Fixed

Deposits, Life Insurance Corporation (LIC) policies urban property etc to the value of

at least 50 per cent of the loan amount.

b. For Combine Harvesters as an attachment/ equipment: Farmers who are in a

position to operate the Harvester successfully and owning minimum of 6 acres of

irrigated land (corresponding acreage for other types of land). They should own a

tractor of not less than 50 Horse Power (HP). Farmers owning lesser acreage than that

prescribed above, are also eligible for availing combine harvester loans provided they

could operate the harvesters successfully and generate sufficient income, additionally

they should provide additional collateral security like NSCs, Bank Fixed Deposits,

urban property etc the value of at least 50 per cent of the loan amount

Loan amount: Up to 85 per cent of the cost of combine harvester and accessories.

Security:

1. Hypothecation of assets financed

2. Mortgage of land/buildings

How do the customer repay: Repayment of the loan will be in Quarterly/ half

yearly/ yearly installments depending on the liquidity customers activity creates

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AND a maximum period of residual economic life of the tractor owned which is

assumed as 9 years.

How to apply for this loan: The customer may contact SBIs nearest branch or talk

to the marketing officers visiting the village.

K. Dairy Plus Scheme of SBI for Financing Dairy Units:

Purpose: For construction of shed, purchase of milking animals, milking machine,

chaff cutter or any other equipment required for the purpose.

Who are eligible?

(1) Individual farmers who are members of the milk procuring societies or located on

milk route.

(2) They should be less than 65 years of age.

(3) Individual dairy unit having less than 10 animal - should own minimum 0.25 acre

of land for every 5 animals for growing fodder and be in a position to procure the

balance requirements locally.

(4) Individual dairy unit having 10 animals and above - should own or lease a

minimum of one acre of land for cultivation of fodder for every 5 animals.

Other terms:

Animal purchase should be in 2 batches

Only buffaloes producing more than 7 liters of milk per day and cows

producing more than 8 liters of milk per day are financed

Animals in first and second lactation alone are eligible for finance

Loan Amount: 100 per cent of the cost for loan is up to 50000 and 90 per cent of

the cost for loan above 50000 with a maximum of 5 lakh as a term loan.

Working Capital: A working capital @ 2500 per animal per year may be

sanctioned for purchase of feed, fodder and medicine along with the term loan.
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Security: Hypothecation of assets created out of bank finance for loans up to 1.00

lakh. For loans Over 1 lakh - Mortgage of landed property (or) third party guarantee

Worth for loan amount (or) group guarantee of other 2 dairy farmers.

How do the customer repay: The loan should be repaid in monthly installments

over a period of 5 lactations.

How to apply for this loan: The customer may contact our nearest branch or talk to

the marketing officers visiting the village.

L. SBI Krishak Uthaan Yojna:

Purpose: This scheme is to provide short term production and consumption credit to

meet Genuine requirements of tenant farmers, share croppers and oral lessees who do

not have recorded land records and where there is no written undertaking/ document

available to substantiate raising of crops by the tenant farmer/ share cropper/oral

lessee. It will help increase their income from agriculture production activities.

Who are eligible?

Landless labourers, share croppers, tenant farmers, oral lessees, (also covering

oral tenants and small farmers) having no recorded land records are eligible .They

should have a permanent residential address proof & have been residing at the lace for

at least past 2 years. Migratory tillers are not eligible under the scheme.

Loan amount:

Maximum of 50000 out of which maximum consumption credit will be 10000.

What documents you need to provide:

(1) Proof of residence

(2) Proof of identity

(3) Affidavit in the prescribed format, duly notarized

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Security: Nil

How do the Customer repay: The customer should route the sale proceeds through

the cash credit account.

How to apply for this loan: The customer can contact SBIs nearest branch or even

talk to the marketing officers visiting your village.

M. Scheme of SBI for Financing Seed Processors:

Purpose: To extend financial assistance to the seed processors against their

receivables due to them from the seed growers.

Who are eligible?

Seed processors / units.

Enjoying good reputation & credit worthiness.

Holding a valid license from the concerned State Department of Industries for

Installation of Seed Processing Plant.

Having valid certificate from Seed Certification Department.

Doing business for the last 3 years.

Having receivables from the farmers.

Who have posted profits during the past two years of operation is eligible to

avail credit limits under the scheme.

Loan amount: 60 per cent of the value of the receivables minimum 2.00 lakhs. No

upper limit.

Security:

(1) Assignment/ hypothecation of receivables from the farmers.

(2) Equitable mortgage of residential/ commercial property worth 1.5 times of the

limit sanctioned belonging to either the applicant or the guarantor.

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How to repay the loan?

Loan can be liquidated within a maximum period of 6 months for each crop season

i.e., Rabi & Kharif.

How to apply for this loan?

The customer may contact his/ her nearest branch or even talk to the marketing

officers visiting your village.

N. Financing to Horticulture by SBI:

Purpose: Loans for development of fruit orchards like mango, chikoo, Grapes,

pomegranate, apple, etc., as well as short term crops like banana, pineapple, Flowers

in open and green houses and vegetable crops are financed.

Who are eligible?

All farmers have cultivable lands.

Loan amount:

Up to 50000 100 per cent of the cost of the asset / project cost
Up to 85 per cent of the asset / project are given as
Above 50000
loan.

For Short term loans, loans are given under SBI crop loan / Kisan Credit Card (KCC)
schemes.
Documents you need to provide: For Orchard development the customer needs to

submit the following:

Water and soil testing report.

A feasibility certificate from the local Horticulture department.

Land records.

Quotation/estimates for the costs to be incurred.

Project Report, if the project is large.

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Disbursement of the loan: Generally disbursements are made directly to the
suppliers. Cultivation expenses are released in stages as per the schedule set in your
proposal.
Security:

Loan amount up to 50000 Hypothecation of assets created

1) Hypothecation of assets created
Above 50000 up to 100000
2) Mortgage of land or third party guarantee
1) Hypothecation of assets created
Above 100000
2) Mortgage of lands

How do the customer repay?

The loan repayment starts after the completion of the gestation period varying from 4

to 7 years for different crops. Repayment commences from the time the crop gives

economic yield and is linked to the income generation of each crop every year and

varies between 7 to 12 years.

How to apply for this loan?

The customer can contact SBIs nearest branch or even talk to the marketing officers

visiting your village.

(B) AGRICULTURE FINANCING/ LOAN FACILITIES OF UNITED BANK

OF INDIA (UBI):

United Bank of India (UBI) is at present having maximum rural coverage in

the eastern region amongst different banks. The different financing/ loan facilities

being provided by the United Bank of India (UBI) for Agriculture sector in various

states (including UP) are described below:

A. Kisan Credit Card (KCC)

1. Objective: The scheme aims at providing adequate and timely credit for the

comprehensive credit requirements of farmers for taking up agriculture and allied

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activities under single window, with flexible and simplified procedure, adopting

whole farm approach, including the short-term credit needs and a reasonable

component for consumption needs, through Kisan Credit Card (KCC) including

repayment of farmer's dues to non-institutional lenders.

2. Area of operation: Through all rural and semi urban branches.

3. Eligibility

i. Short term crop loans to farmers those who are owner cultivators/ share-

croppers/ bargadars.

ii. KCC can also be issued for meeting the short term production need/working

capital needs in respect of the allied activities like poultry, dairy, Pisciculture,

floriculture, horticulture etc.

iii. KCC schemes also cover the term credits for agriculture and allied activities.

iv. KCC is issued to individual borrower only on merit and not to corporate body

society, association, club, group etc.

v. Illiterate and blind persons intending to avail of this facility may be allowed after

taking proper safeguard against misuse and tampering.

4. Purpose: It is intended that both term as well as short term/working capital credit

facilities will be provided through single Kisan Credit Card. The passbook provided

to KCC holders are to be divided into three separate portions for maintaining the

records of: a) Short term credit / crop loans, b) working capital credit for activities

allied to agriculture and c) term credit (repayable beyond 12 months)

However, it is to be ensured that transaction records of different loan facilities are

kept distinct.

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5. Credit limit

i. Minimum credit limit should be 25000 and maximum 10.00 lakhs in the

form of working capital and term loan. However, in deserving cases the upper

limit may be enhanced above 10.00 lakhs which has to be disposed of under

the D.P. of the General Manager in charge of Priority Sector Lending.

ii. Working capital will be in the form of revolving cash credit and any number of

withdrawals and repayments in the account is allowed with a view to provide

flexibility to the borrower in deciding the appropriate time for withdrawal of the

sanctioned limit and reducing his loan and interest burden. (For ST Crop Loan,

Consumption Loan and repayment of non-institutional loans)

iii. Term Loan to be sanctioned for purchase of agricultural implements, plant and

machinery and land developing including construction of different types of

storage facilities.

iv. While fixing the limit and sub-limits, entire year's production credit requirement

is reckoned, including those of ancillary activities such as storing, marketing,

electric expenses etc.

v. Credit limit is fixed on the basis of land holding under cultivation, cropping

pattern and the scale of finance recommended by District/State level technical

committee. In the absence of such recommendation, the branch may fix

appropriate scale of finance for the crop after getting permission from the

concerned Regional Office.

vi. The branch should also fix season-wise sub-limits within the overall credit limit.

vii. Contingency expenses, including consumption loan should not exceed 10 per

cent of the ST loan sub-limit subject to maximum 10,000 till harvesting the

benefit of production linking with family need.

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viii. Repayment of loan availed from non-institutional lenders by the farmer

borrowers in addition to consumption/contingency credit limit should not

exceed 25 per cent of the ST loan sub-limit subject to maximum 25,000.

6. Validity: The credit card will be valid for 5-7 years subject to annual review.

7. Security / Margin: It should be in conformity with the guidelines issued by

Reserve Bank of India (RBI)/ National Bank for Agriculture and Rural Development

(NABARD)/ BANK from time to time in respect of agricultural advances. As per

extant guideline there is no margin or additional security required up to a loan limit of

50,000.

Primary: Hypothecation of asset - Crop/Farm Machinery/Dairy Animal, etc. as

applicable.

Additional: Collateral Security wherever applicable, as per RBI/Bank's guidelines

i) Mortgage of land by way of declaration in Form-I.

ii) Equitable mortgage / Registered mortgage as applicable.

8. Interest: As per directive of RBI/ Bank issued from time to time. The rate of

interest is subject to change from time to time as per Head Office (HO) Instruction.

9. Interest payable on credit balances: Interest as applicable for S.B. Account, is

payable in the Revolving Cash Credit account on the minimum credit balance, if any,

between 10th and the last day of each calendar month.

10. Application form: In addition to KCC application form, separate application

form for each purpose is to be obtained. But, while fixing the limit, the sub-limit is to

be earmarked for each purpose separately.

11. Documents

i. Demand Processing (DP) Note for the sanctioned limit

ii. Loan Agreement

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iii. Letter of continuity

iv. Hypothecation of crop / assets to be created out of bank loan

v. If the sanctioned limit is more than 50,000 mortgage of land/or third party

guarantee acceptable to the Bank.

12. Repayment: The short term credit/ crop loan as well as working capital for

agriculture and allied activities would continue to be provided as revolving cash credit

repayable within 12 months. However, the term loan component will be repayable

within a maximum period of 5 to 7 years depending upon the type of activity /

investment as per existing guidelines.

13. Crop Insurance under NAIS: All Crop loans under KCC (Kisan Credit Card)

are to be covered under National Agricultural Insurance Scheme (NAIS) in respect of

the notified crops. It is implemented with the approval/consent of State Government

concerned, which is monitored and followed up by SLBC (State Level Banking

Committee) of that State.

The following crops are covered under NAIS:

a) Food crops (cereals, millets, pulses)

b) Oil seeds

c) Sugar cane, cotton and potato (annual commercial / annual horticulture crops)

All farmers both loanee and non-loanee farmers growing the above notified crops in

the notified areas are eligible for insurance coverage. In each district there is a Nodal

Branch for receiving premium for insurance coverage and remitting the premium to

the Agricultural Insurance Corporation of India. Subsidy on premium is allowed in

respect of small and marginal farmers.

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14. Personal Accident Insurance Scheme (PAIS): The coverage under PAIS is also

compulsory for all KCC holders. The premium payable under the scheme is to be

shared by the issuing Branch and the KCC holder in the ratio of 2:1.

The premium payable for a one-year policy is 15 while the same for a three

year policy will be 45 only. The insurance coverage will be from the date of receipt

of premium by the Insurance Co.

Maximum age of the farmer 70 years on the date of commence of policy.

Coverage: Accident death - 50,000.

Permanent total disability - 50,000.

Loss of two limbs or two eyes - 50,000.

Loss of one limb or one eye - 25,000.

B. United Krishija Laghu Paribahan Yojana

1. Objective: To provide financial assistance to the farmers for acquiring three

wheelers, to be used as transport equipment for carrying agricultural inputs and farm

produces.

2. Area of operation: Through all rural and semi urban branches.

3. Eligibility: The farmers owning lands or no land but having driving license will be

eligible for the loan.

4. Quantum of loan: Maximum upto 1.00 lakh.

5. Margin: 15 per cent of the cost of vehicle, Margin may be reduced to 5 per cent in

cases where additional security in the form of bank's own term deposit/NSC/KVP is

offered covering upto 10 per cent of the amount of loan.

6. Security:

Primary : The vehicle and all its accessories.

Additional : i. For loans upto 50,000 Nil.

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 ii. For loans above 50,000 Mortgage of land or third party

guarantee acceptable to the Bank / Lien on term deposit / NSC / KVP (10 per cent).

7. Rate of interest: Rates of interest is subject to change from time to time as per

H.O. Circular.

8. Processing fee: 1 per cent of the sanctioned loan amount.

9. Nature of loan: Direct lending to agriculture under MTFL.

10. Documents

i. Demand Processing (DP) Note

ii. Hypothecation of transport equipment

iii. All documents related to creation of mortgage / lien of term deposit etc.

wherever applicable. A copy of the blue book with bank's name as hypothecates and

duplicate ignition key to be kept with documents.

11. Disbursement: Directly to the supplier of vehicle by way of P.O. /D.D. etc. under

instruction from the borrower.

12. Repayment: Repayable in 40 monthly installments commencing from 30 days of

the commissioning of the vehicle on the road.

13. Insurance: Comprehensive insurance policy should be taken at the borrower's

cost with bank's clause.

C. United Krishi Sahayak Yojana

1. Object / Purpose

i. Providing financial assistance for purchasing tractor and power tiller for the

purposes of tillage operations, transportation of output and inputs and custom hiring.

ii. Providing self employment to rural youth for taking up custom hiring as well as

tillage of his own land.

iii. To increase direct lending to agriculture.

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2. Area of operation

i. Through rural and semi urban branches within or even outside their service area.

ii. For such loan service area concept will not be applicable.

iii. The concept of 'No Objection Certificate' is dispensed with, but indebtedness of

the farmer is to be examined by exchange of list of borrowers amongst the bankers in

the service area / Block / Tehsil.

3. Eligibility

i. A non-defaulter farmer possessing minimum 2.5 acres of irrigated land for

tractor and 1.5 acre of irrigated land for power tiller. In case where financing of

tractor is 100 per cent secured by liquid security like FDs (Fixed Deposits), NSCs

etc., there will be no minimum land holding criteria, but the applicant should be a

farmer.

ii. For rural youth below 35 years of age having a valid tractor driving license and

possessing minimum 2 acres of irrigated land for tractor and 0.5 acres of irrigated

land for power tiller. He should be a non-defaulter and duly recommended by block

Development Officer (BDO)/ Village Panchayat and Anchal Pradhan.

4. Margin: 10 per cent for farmers. However, there is no margin in case of loan up to

50,000.

5. Rate of interest: Rate of Interest is liable to be changed from time to time; a

reduction of 0.25 per cent is allowed if the borrower agrees to obtain a Life Insurance

Policy equal to the amount of loan. Since the Bank is acting as a Corporate Agent of

TATA AIG, borrower may be persuaded to have the policy with TATA AIG,

although it is not a compulsion.

6. Security

Primary : Hypothecation of the tractor/power tiller/accessories

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Additional : Mortgage/charge on land possessed by the applicant and/or third

party guarantee acceptable to the bank.

7. Documents to be obtained

i. Demand Processing (DP) Note

ii. Hypothecation of transport equipment

iii. Hypothecation of movable Plant & Machinery

iv. Mortgage/ charge on the land, wherever necessary

v. Assignment of Life Insurance Corporation (LIC) Policy, wherever necessary

8. Insurance: Comprehensive insurance of the tractor/ power tiller/ accessories is to

be done at the borrower's cost with bank's clause. Life Insurance of the borrower is

optional.

9. Repayment: To be repaid within 7 years, including a moratorium period of 6

months which may be extended to 12 months subject to approval of the controlling

Regional Manager; repayable is quarterly installments by the farmers and monthly

installments by the owner drivers.

10. Financing of second hand Tractor: 2nd hand Tractors can be financed upto 90

per cent of the assessed value provided the following conditions are fulfilled:-

i. Age of the Tractor must be within 7 years from the date of original purchase.

ii. Valuation of the tractor done by any automobile engineer or any other organization

/ body approved by the respective State Govt.

iii. Other terms & conditions of the scheme.

D. United Gramyashree Yojana

Objective: To provide uninterrupted, quick and hassle free credit with a view to

appreciate and encourage good borrowers /depositors for different productive

activities.

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Area of operation: All rural and semi urban branches.

Purpose: For all kinds of agricultural, allied and other productive activities with

emphasis on minor irrigation, farm mechanization, horticulture and plantation, dairy,

poultry, fishery, sericulture, bio-gas, high-tech agriculture, setting up of agri-business/

agri-clinic, purchase of land for agricultural purposes.

Eligibility

i. Existing medium term farm borrowers with good track record for the last 3

years, woman family members of such borrowers.

ii. Existing depositors maintaining an average balance of 25,000 or above for

the last 3 years can apply himself (herself) / recommend the loan proposals

under this Scheme as guarantor.

Quantum of loan:

i. Maximum upto the amount of the original loan repaid by the existing borrower

without further security.

ii. Maximum of 50,000 in case of woman family member.

iii. Need based finance depending upon the scheme applied / recommended /

guaranteed by the existing depositors with the following margin :

Margin:

Women family members ... Nil

Loan upto 50,000 ... Nil

50,001 to 2.00 lakhs ... 10 per cent

Above 2.00 lakhs ... 20 per cent

Rate of interest: As per Reserve Bank of India (RBI)/ Head Office (HO) guidelines

issued time to time and as applicable to priority sector advances. However, concession

in the rate of interest is to be allowed as under:

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 a) 0.50 per cent in case of women family members

b) 0.50 per cent in case Depositor is the borrower

c) 0.25 per cent in case Depositor is the proposed guarantor

Security:

Primary: Hypothecation of assets created out of the loan.

Additional:

I. For loans to account holders:

a) Loan limit up to 50,000 (inclusive of existing limit) No additional security

other than hypothecation.

b) For loan limit above 50,000 mortgage / charge on land or third party

guarantee acceptable to the bank or extension of existing mortgage/ charge/

guarantee.

II. For loans availed/ guaranteed by depositors:

a) Loan limit up to 50,000 - Nil

b) Mortgage/ charge on land or personal guarantee from persons acceptable to the

bank as per norms for loan limit above 50,000.

III. For loans granted to women family members:

a) Personal guarantee of depositor/ principal borrower only.

Repayment:

i. Repayment period of loans under agriculture and allied activities will be

guided by National Bank for Agriculture and Rural Development

(NABARD)'s repayment schedule for farm loan as circulated in "Guidelines

on Farm Finance" (5-15 years).

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 ii. Installments should be fixed monthly, quarterly or half-yearly basis

commensurating with the income generation from the activity for which the

loan is granted.

Insurance: The assets created out of loan are to be insured for fire and other risks

with bank clause and to be renewed every year. However, in case of loan limit up to

10,000 for equipments and current assets insurance may be waived at the request of

the borrower or at the discretion of the bank.

E. United Bhumiheen Kisan Credit Card

Objective: The objective of the United Bhumiheen Kisan Credit Card (UBKCC) is to

provide production credit coupled with the provision of consumption credit and credit

for liquidation of loan availed from informal sector and for meeting genuine need of

the farmers who are landless tenant farmers, oral lessees, bargadars and share

croppers for availing working capital assistance for agriculture and allied activities

like dairy, poultry, fishery, piggery, duckery, horticulture, nursery, ornamental

fishery, vegetable orchard and bee-keeping, etc.

Eligibility:

1. Any individual belonging to the above category.

2. Self Help Group (SHG)/Joint Liability Group of the above category of farmers.

3. Contract farmers under tie-ups with sugarcane, potato, vegetables, fruits and

horticultural crops processing units and other processing units in allied agricultural

activities.

Limit:

a) Maximum 25,000 for all the above purposes together.

Out of the above limit 5000 may be utilized for investment credit purpose if

required by the borrower.

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b) Consumption loan limit not to exceed 2500.

c) Repayment of loans to informal sector maximum 5000 on the basis of

documentary evidence and certified by the Panchayat Pradhan.

d) Scale of finance as fixed by District Level Technical Committee (DLTC) and unit

cost fixed by National Bank for Agriculture and Rural Development (NABARD)

will be applicable.

e) For cultivation of multiple crops different sub-limits to be fixed.

Issue of cards and operations in the Account: As per existing guidelines under

Revised Kisan Credit Card Scheme of the bank circulated on 8.2.2005.

Rate of Interest: Rate of Interest as per Head Office guidelines. Reduction of 0.25%

for satisfactory operation of the account including regular servicing of interest will be

allowed as per existing policy.

Processing Charge: NIL

F. United Gramin Sahaj Credit Card: In line with the Reserve Bank of India

(RBI)s decision to extend banking services to the small man under the financial

inclusion concept of Reserve Bank of India (RBI) issued as per the guidelines dated

27.12.2005 for introducing of General Credit Card Scheme. Pursuant to that

guideline, the Bank has introduces above-named United Gramin Sahaj Credit Card

Scheme (UGSCC) with immediate effect.

The Salient features of United Gramin Sahaj Credit Card Scheme are as under:

Objective: The scheme shall cover general credit needs of our customers in rural and

semi urban areas. The objective of the scheme is to provide hassle free credit for any

purpose to the customers based on the assessment of income/ cash flow of the

household without insisting for purpose & ensuring end use of the fund & without

insisting collaterals etc. - in line with issuing of General Credit Card.

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Implementation: The scheme will be implemented in all rural and semi urban

branches of the bank.

Nature of accommodation: The credit facility to be extended under the scheme will

be in the nature of revolving overdraft facility. The UGSCC holder will be entitled to

draw cash from the branch from where the limit will be sanctioned and a passbook

will be issued stating the limit etc. affixing photograph.

Eligibility: Any individual household having regular income from salary, business,

profession and any other economic activities (Farm and Non Farm activities) like

agriculture, Pisciculture, dairy, poultry, piggery, duckery, transport operating,

craftsmanship, artisanship, etc.

Preference is to be given the women beneficiaries under the scheme:

Identification: Identification of the key person of the household in whose name the

limit will be sanctioned to be made from salary certificate, book of accounts, ration

card, voter identity card, certificate from Panchayat, etc.

All existing defaulter loanees will be kept outside the purview of the scheme:

Branch managers are advised to utilize the services of local Post offices, schools,

Primary Health Centre, local Govt. Functionaries, Farmers' Association/ Club, well-

established community based agencies and civil society organizations for sourcing of

borrowers for issuing UGSCC.

Quantum of limit: Maximum 25,000 per individual household.

The limit to be fixed based on the assessment of income and cash flow of all the

earning members of the household. However, it is suggested that the limit to be

fixed on the basis of annual income of the household as under

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 Annual Income Limit (Max)
Up to 10000 500
Above 10000 to 25,000 2,000
Above 25,000 to 50,000 5,000
Above 50,000 to 1 lakh 10,000
Above lakh to 2 lakhs 15,000
Above 2 lakhs 25,000

To begin with the Banks branch may fix lower limit. However, depending

upon the experience and the conduct of the account the limit can be enhanced as

suggested above. In this connection for annual income up to 100000 self declaration

of income by the borrower will be sufficient. However, the Branch Manager will

make appropriate assessment of income after making enquiry from the available

sources. For annual income above 100000 the borrowers are to submit necessary

documents for justifying their annual income.

Interest rate: Rate of Interest is liable to be changed from time to time as per H.O.

guidelines. For the women beneficiaries 50 per cent concession is provided.

G. United Sahaj Rin Yojana (For North Eastern States Only)

Objective: The objective of the "United Sahaj Rin Yojana" is to provide overdraft

facility for pursuing any income generating activities in the farm and non-farm sector

(any eligible activities). The scheme is meant for weaker section of the society under

priority sector for bringing the small traders like Pan Bidi vendors, vegetable / fish

vendors, fruit vendors, newspaper hawkers, fast food stalls, phoochka stalls, etc. The

scheme is aimed to avoid borrowing by these very small traders from private money-

lenders at very high rate of interest.

Eligibility: Any individual in the age group of 18-50 yrs. belonging to BPL list and

undertaking the above-mentioned activities, and residing in the vicinity of the branch

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preferably within 1 to 1.5 km. from the Branch for proper monitoring. All existing

defaulter loanees will be kept outside the purview of the scheme.

Limit:

For Rural & Semi Urban Branches For Urban & Metropolitan Branches
a) Initial overdraft will be for 500. a) Initial overdraft will be for 1000.
b) Subsequently the limit may be enhanced b) Subsequently the limit may be
to 3000 in 3 years subject to enhanced to 5000 in 3 years
satisfactory operation / transactions in subject to satisfactory operation /
the account. transactions in the account.

Security:

Primary: Hypothecation of goods/ assets.

Additional: Nil

Margin: Nil

Interest: Rate of Interest is liable to be changed from time to time as per H.O.

guidelines.

Documents

a) Pronote.

b) Letter of continuity.

c) Hypothecation of goods.

Insurance: The risks of personal accident to be covered by policy of Bajaj Allianz

Ltd. and premium to be paid by the Bank.

H. Financing to Self Help Groups (SHGs) by UBI:

A Self Help Group (SHG) is a small, economically homogenous and affinity

group of rural poor having a common perception of need and impulse towards

collective action, voluntarily formed to save and mutually agreed to contribute to a

common fund to be lent to its members as per group decision for meeting the

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emergent needs of the members, both for productive and consumptions purposes to

raise their income and improve their living standards.

1. Objective:

i. To evolve supplementary credit strategies for meeting the credit need of the

rural poor.

ii. To encourage banking activities both on thrift as well as a credit portfolio.

iii. To build mutual trust and confidence amongst the group members as also

between the bankers and rural poors / groups.

2. Membership: The membership of the group should be restricted between 10 years

to 20 years. Only one person of a family either male or female can be the member of

an SHG. The Group should preferably be economically and socially homogeneous,

covering people below poverty line, above poverty line or even a mixture of the two.

The defaults by a few members of Self Help Groups (SHGs) and/ or their family

members to the financing bank should not ordinarily come in the way of financing

SHGs by Bank provided the SHG is not in default to it. However, the bank loan was

not be utilized by the SHGs for financing a defaulter member to the Bank.

3. Opening of Savings Bank (SB) Account: Savings Bank (SB) account of the

registered or unregistered Self Help Groups (SHGs) is to be opened. For this purpose

a duly filled in application form should be obtained along with the following

documents:

i. A copy of the resolution passed in the meeting of the SHG signed by all

members containing the decision to open the bank account with authorization

of 3 members for joint operation of the account.

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 ii. Bye law if any, initial cash deposit of 50 may be accepted for opening of S.B.

account. The account and Pass Book should be in the name of Self Help

Group (SHG).

4. Internal lending by Self Help Group (SHG): The deposit held in Savings Bank

(SB) Account of the Self Help Group (SHG) over the minimum balance of 50 shall

be utilized for internal lending among the members. The repayment including

principal and interest shall be deposited in the SB account and further lending be

carried on to maintain the cycle.

5. Assessment of Self Help Group (SHG): The Self Help Group (SHG) is required

to be assessed by the branch according to prescribed check list before extending

credit.

6. Credit facility:

i. Loan should be sanctioned in the name of the Group and not in the name of

individual members.

ii. Amount of loan should be up to four times the group corpus fund. Higher

amount may however, be sanctioned depending upon the Credit absorption

capacity, conduct of the SHG and viability of the project.

iii. Group corpus will include the balance in SB Account, outstanding balance in

the loan ledger, cash held by authorized person and any other contribution

received by SHG as grant, donation etc.

iv. Credit facility will be in the forms of Term Loan / Cash Credit / Overdraft

depending upon the productive activity undertaken.

7. Margin & Security Norms: Up to 50,000 no margin and collateral security to be

obtained. The branch shall not mark lien on the deposits in SB A/c. of the SHG which

is a component of group corpus fund meant for internal lending. However, a letter of

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guarantee may be taken from all the members of the group. In case of loans to NGOs,

third party guarantee and/or collateral security may be insisted upon.

8. Rate of interest: Are applicable as per Head Office Circular. The Non

Governmental Organizations (NGOs) should not charge interest to the Self Help

Groups (SHGs) more than 1.5 per cent over the rate with which they borrowed from

the Bank.

I. Gramin Bhandaran Yojana of UBI:

1. Objective:

The main objectives are:

i. Creation of scientific storage capacity with allied facilities in rural areas to

meet the storage need of farmers for farm produce, consumer articles and

agricultural inputs.

ii. Promotion of grading, standardization and quality control of agricultural

produce for improving their marketability and preventing distress sale.

iii. Promotion of pledge financing and marketing credit and to strengthen

agricultural marketing infrastructure for introduction of a national system of

warehouse receipts in respect of agricultural commodities stored in such

godowns.

2. Implementation

i. The scheme is implemented by the Directorate of Marketing and Inspection

attached to Department of Agriculture and Cooperation. Implementation of the

scheme shall be continued up to 31.03.2007.

ii. The construction of godowns shall be as per specifications of Central

/State/Public Works Department. Or any other specifications laid down on this

behalf.

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 iii. The godown complex shall have easy approach road, pucca internal roads,

proper drainage, arrangements for effective control against fire, theft and also

have arrangements for easy loading and unloading of stocks.

iv. The entrepreneur must have proper license to operate such godowns under the

State Warehousing Act or any other relevant law

v. The project to be prepared by the borrower acceptable to the bank and

submitted along with approved plan and estimated cost by an approved

engineer.

vi. Average Debt Service Coverage Ratio (DSCR) should not be below 1.5 and in

any year it should not be less than 1.33.

vii. As this is a subsidy based scheme disbursement to be made only after

receiving of 50 per cent advance subsidy.

Eligibility:

The project for construction of rural godown can be taken up by the following:
i. Individual v. SHGs ix. Cooperative
Societies
ii. Farmers vi. Partnership/ x. Agricultural
Proprietorship Produce Marketing
concern
iii. Group of vii. Companies xi. Marketing Board
farmers
iv. NGOs viii. Corporations xii. Agro Processing
Corporations

[SHGs Self Help Groups; NGOs Non Governmental Organizations]

4. Rate of interest: As per Reserve Bank of India (RBI) Guidelines.

Repayment period: Depending upon the cash flow it may be up to 11 years including

the grace period of one year. The first annual installment will fall due after 23 months

from the date of first disbursement.

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Financing by State Cooperative Banks: State Cooperative Banks of UP provide

various types of agricultural loans for farmers in the State of UP and these loans are

provided at a lower rate of interest with simple terms of repayment as compared to

that offered by private lenders.

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 ANALYSIS AND FINDINGS

The present study is consisting of following parts: (A) Questionnaire Survey of

Farmers; and (B) Discussions/ Interviews with the Officials of Banks/ Financial

Institutions. These are discussed below:

(A) Questionnaire Survey of Farmers:

Sample Size - 100 farmers of agriculture sector who have taken/ availed/ availing/

intended to avail loans/ financing from various banks/ financial institutions in UP (Uttar

Pradesh).

Q.1. Age wise distribution of respondents.

Respondents No.
Between 18 to 35 years 37
Between 35 to 45 years 33
Above 45 years 30

AGE WISE DISTRIBUTION OF RESPONDENTS/ FARMERS

Between 18 to 35
Above 45 years years
30% 37%

Between 35 to 45
years
33%

It is observed that 37 per cent of respondents/ farmers belong to the age group of 18 to

35 years, followed by 33 per cent of respondents/ farmers pertaining to the age group

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of 36 to 45 years and 30 per cent of respondents/ farmers in the age group of above 45

years.

Q.2. Gender wise distribution of respondents.

Respondents No.
Male 63
Female 37

GENDER WISE DISTRIBUTION OF RESPONDENTS/ FARMERS

Female
37%

Male
63%

It is found that amongst the respondents/ farmers, 63% are male and 37% are female.

Q.3. Is farming your only occupation?

Respondents No.
Yes 38
No 62

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 WHETHER FARMING IS THE ONLY OCCUPATION OF
RESPONDENTS/ FARMERS

Yes
No
38%
62%

It is found that 62 per cent of respondents/ farmers are into other businesses or

works along with farming occupation and 38 per cent of respondents/ farmers depend

on farming as their main occupation.

Q.4. For what purpose you have taken or are intending to take Agricultural

loans?

Respondents No.
Cultivation of Crops 50
Animal Husbandry 20
Horticulture 18
Purchase of Agri Machinery 8
Others 6

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 PURPOSE WISE DISTRIBUTION OF AGRICULTURAL LOANS
OF FARMERS/ RESPONDENTS

Others
Purchase of Agri 6%
Machinery Cultivation of Crops
8% 50%

Horticulture
16%

Animal Husbandry
20%

It is observed that maximum numbers of respondents/ farmers are availing

agricultural loans for cultivation of crops (50), followed by loans for Animal

Husbandry (20), loans for Horticulture (16), loans for purchase of Agricultural

machinery (8), and other purposes (6).

Q.5. Whether you are availing or intend to avail agricultural loans for assets

located in your home state or other states?

Respondents No.
For Assets in Home State 90
For Assets in Other States 10

AGRICULTURAL LOANS TAKEN FOR ASSETS LOCATED IN

HOME STATE OR OTHER STATES

For Assets in Other

States
10%

For Assets in Home

State
90%

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It is observed that maximum nos. of respondents (90%) are availing agricultural loans

for assets in their home states.

Q.6. From which Bank/ Financial Institution you are availing/ intend to avail

Agriculture Loans for your use?

Respondents No.
State Cooperatives 30
SBI 21
Public Sector Banks Other Than SBI 25
Private Sector Banks 15
Self Help Groups/ Others 9

SOURCES OF AVAILING AGRICULTURAL LOANS BY

FARMERS/ RESPONDENTS
Self Help Groups/
Others
State Cooperatives
9%
30%
Private Sector
Banks
15%

Public Sector SBI

Banks Other Than 21%
SBI
25%

As per the respondents the sources of availing for agriculture loans are as follows (in

decreasing order of preference): State Cooperatives (30%), Public Sector Banks other

than SBI (25%), SBI (21%), Private Sector Banks (15%), Self Help Groups/ Others

(15%).

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Q.7. When you have last availed or are expected to avail the Agriculture

Loan?

Respondents No.
Last year 29
Last 2 to 5 years 44
Current Year 24
In Near Future 2

TIME OF AVAILING AGRICULTURAL LOANS BY FARMERS/

RESPONDENTS

In Near Future
2% Last year
Current Year 29%
24%

Last 2 to 5 years
45%

As per the respondents/ farmers the time of last availing or expected to avail

agricultural loans are as follows (in decreasing order of preference): Last 2 to 5 Years

(45%), Last Year (29%), Current Year (24%), In near future (2%).

Q.8. What is the approximate amount of Equated Monthly Installments (EMI)

you are paying or is likely to pay for your agricultural loan?

Response No.
Up to 5000 86
Between 5001 and 10000 10
Above 10000 4

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 APPROXIMATE AMOUNT OF EQUATED MONTHLY
INSTALLMENTS (EMI) FOR AGRICULTURAL LOANS BEING
PAID OR LIKELY TO BE PAID BY FARMERS/ RESPONDENTS

Between Rs.5001 Above Rs.10000

and Rs.10000 4%
10%

Up to Rs.5000
86%

It is observed that as per the respondents/ farmers, the approximate amount of

Equated Monthly Installments (EMI) being paid or likely to be paid by farmers for

agricultural loans are as follows: Up to 5000/- (86%), Between 5001/- to

10000/- (10%) and Above 10001/- (4%).

Q.9. How much processing fees/ charges you have given or are likely to give for

your agricultural loan?

Response No.
Up to 1% of Loan Amount 50
Between 1% to 2% of Loan Amount 44
More Than 2% of Loan Amount 6

APPROXIMATE PROCESSING FEES/ CHARGES BEING PAID

OR LIKELY TO BE PAID FOR AGRICULTURAL LOANS BY
FARMERS/ RESPONDENTS

More Than 2% of
Loan Amount
6%

Up to 1% of Loan
Amount
Between 1% to 2% 50%
of Loan Amount
44%

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 In the survey, it is found that 50 per cent of the respondents/ farmers have paid

or are likely to pay processing fees or file charges up to 1 per cent of loan amount, 44

per cent of respondents have paid or are likely to pay processing fees between 1 to 2

per cent of loan amount, while 6 per cent of respondents have paid or are likely to pay

processing fees of 2 per cent and above.

Q. 10. Do you pay or likely to pay a flat rate of interest or interest on reducing

balance for agricultural loans?

Response No.
Flat Rate of Interest 0
Interest on Reducing Balance 100

TYPES OF INTERESTS BEING PAID OR LIKELY TO PAY FOR

AGRICULTURAL LOANS BY FARMERS/ RESPONDENTS

Flat Rate of Interest

0%

Interest on
Reducing Balance
100%

It is observed that all the respondents/ farmers (100%) are paying or likely to

pay interest on reducing balance for agriculture loans.

Q.11. Whether banks/ financial institutions are insisting or likely to insist for any

collateral and/ or hypothecation of assets for agricultural loans?

Response No.
Yes 100
No 0

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 WHETHER BANKS/ FINANCIAL INSTITUTIONS ARE INSISTING
FOR COLATERALS OR HYPOTHECATION OF ASSETS FOR
AGRICULTURAL LOANS

No
0%

Yes
100%

It is observed that all the respondents/ farmers (100 per cent) have said that

banks/ financial institutions are insisting or likely to insist for collateral and/ or

hypothecation of assets for agricultural loans.

Q.12 Do you find the repayment programmes generally fixed by the banks/

financial institutions in respect of Agricultural loans are comfortable with your

Income level?

Response No.
Yes 13
No 87

WHETHER REPAYMENT PROGRAMMES FOR AGRICULTURAL

LOANS BEING FIXED BY BANKS/ FINANCIAL INSTITUTIONS
ARE COMFORTABLE FOR FARMERS/ RESPONDENTS AS
PER THEIR INCOME LEVELS

Yes
13%

No
87%

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 It is observed that only 13% of the respondents/ farmers have said that the

repayment programmes for agricultural loans being fixed by the banks/ financial

institutions are comfortable as per their income levels, but majority of respondents

(87%) have not agreed with the same.

Q.13. Are you satisfied with the lending or interest rates in respect of Agriculture

loans being/ likely to be availed by you?

Response No.
Yes 11
No 89

WHETHER SATISFIED WITH THE LENDING/ INTEREST RATES

BEING CHARGED BY BANKS/ FINANCIAL INSTITUTIONS FOR
AGRICULTURAL LOANS TO THE FARMERS/ RESPONDENTS

Yes
11%

No
89%

It is observed that majority of respondents/ farmers (89%) are not satisfied

with the lending/ interest rates being charged by banks/ financial institutions for

agricultural loans and have felt the same need to be reduced.

Q.14. Have you attended any training/ education programmes on proper use of

agricultural financing being arranged by any banks/ financial institutions in

your area?

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 Response No.
Yes 11
No 89

WHETHER FARMERS/ RESPONDENTS HAVE ATTENDED ANY

TRAINING/ EDUCATION PROGRAMMES ON PROPER USE OF
AGRICULTURAL FINANCING BEING ARRANGED BY BANKS
AND FINANCIAL INSTITUTIONS

Yes
11%

No
89%

It is observed that only 11 per cent of respondents have attended training/

education programmes on proper use of agricultural financing being arranged by any

banks/ financial institutions.

(B) Discussions/ Interviews with Managers/ Officials of Banks and Financial

Institutions (FIs):

Sample Size: 20 managers/ officials of the different banks and financial institutions (FIs)

(with their branches located in Uttar Pradesh) who are sanctioning Agricultural loans

Q.1. What are the main purposes of agricultural financing/ loans being provided

by various Banks/ Financial Institutions (FIs)?

Ans.: Easy loans lead to more investment, production and profit. This is true even for

the agricultural sector. Since, the nation depends on this sector for food and survival,

it is vital that the government promote its growth. This is done through the provision

of agricultural loans through branches of various Banks and Financial Institutions

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(FIs). These loans are provided at a lower rate of interest with simple terms of

repayment as compared to that offered by private lenders.

Further, the Banks and Financial Institutions (FIs) accommodate the needs of

farmers including landless agricultural labourers through their rural and semi-urban

branches. There are even specialized bank branches of some banks for the

development of agriculture. These branches advise and extend loans/ financial

assistance towards a wide range of agricultural activities such as crop production,

horticulture, plantation crops, farm mechanization, land development, irrigation

projects, forestry, godowns, processing of agricultural products and allied activities

like dairy, fisheries, livestock rearing and sericulture.

In addition, many banks and financial institutions periodically hold farmers

meets in villages to inform farmers about the various schemes offered by their

branches. Some banks have also set up agricultural business units and employs

agricultural specialists in various disciplines to guide farmers.

Q.2. What will be your suggestions towards improving access of agricultural

credits to small and marginal farmers:

Ans.: For improving access of agricultural credits to small and marginal farmers

following actions are required to be taken by banks/ financial institutions and

government:

(1) The farmers from the disadvantageous sections of the farming community

experience difficulties in gaining access to credit. It is primarily due to their lack of

awareness about various government schemes. So, the state governments should have

due concern to this aspect. In fact, some sort of incentive mechanism may be

introduced for the bank whose consumer set is constituted of more than 50 percent of

the marginal, small, tribal and dalit farmers.

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(2) The tribal areas have less availability of the banking facilities. An effort should be

made by the banks to establish new banks branches in these areas. In fact, the

availability of banks in the village is found to be having large impact on introducing

the banking habits among the poor farmers.

(3) The option of microfinance should be adopted and streamlined to alleviate the

plight of the marginal, small, tribal and dalit farmers. They should be linked

effectively to the Self Help Groups (SHGs). Most often, it is the lack of knowledge

about the utility of the SHGs that refrains this class of farmers in joining the SHGs.

So, these farmers should be made aware of the benefits of the SHGs through various

documentaries. The access to SHGs is expected to help the farmers especially Dalit

and Tribal farmers in enhancing their self-esteem and self- confidence at an individual

level and it also help them in becoming more empowered economically.

(4) Strong financial institutions should be developed for rapid financial inclusion of

marginal, small, dalit and tribal farmers. So far, the banking system has catered the

financial needs of the medium and large farmers and the prime concern of credit

delivery has been the upliftment of agriculture. But, such approach has been myopic.

Given the dominance of marginal and small farmers in overall land structure, it would

be inappropriate to leave such a vast set of farmers with inadequate attention. If the

prime goal is to enhance the growth rate of agriculture, then there is no other option

except taking care of the credit needs of the marginal, small, tribal and dalit farmers.

Once these farmers have adequate access to credit, the performance of agriculture

sector is bound to improve.

Q.3. As per your opinions, what are the major problems presently being faced by

the farmers in getting agricultural loans from banks and how these problems can

be minimized/ removed?

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Ans.: The major problems presently being faced by the farmers in getting agricultural

loans from banks/ financial institutions may be as follows:

Feeling of high rate of interest on loans amongst farmers,

Lack of financial knowledge,

Cumbersome process of getting loans,

Bank staff not being very much cooperative,

Lack of security of collateral, and

Fear factor of banks about recovery process.

The policy makers need to simplify the procedure of agriculture credit and interest

rates for marginal and small farmers may be reduced. Regarding the problem of lack

of cooperation by bank staff, the training colleges of bank staff may provide

compulsory periodical rural oriented training to the bank staffs. Further, education

about financial knowledge (financial inclusion) to marginal and small farmers needs

to be spread by effectively involving various concerned NGOs (Non Governmental

Organizations) and SHGs (Self Help Groups) and educational institutions.

The role of government should strictly be concentrated to infrastructure development

like road, transport, irrigation and electricity Micro financing (bank linkage) is a right

step for financial inclusion.

The recovery process of loan needs to be elastic and based on reality. Fear

factor about recovery process of banks/ financial institutions amongst rural farmers

should be reduced through Periodical campaigns/ raining programmes to be arranged

periodically by banks/ financial institutions. Further, the image of banks/ financial

institutions should be presented in rural society as friend, philosopher and guide.

Q.4. What are the major risks in agricultural financing and how these can be

minimized?
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Ans.: Management of risk in agriculture is one of the major concerns of the decision

makers and policy planners, as risk in farm output is considered as the primary cause

for low level of farm level investments and agrarian distress. Both, in turn, have wide

implications on output growth. In order to develop proper mechanisms and strategies

to mitigate risks in agriculture loan, it is imperative to know the sources and

magnitude of fluctuations involved in agricultural output. Farmers are exposed to risk

from rainfall variability, market price fluctuations, credit uncertainty and adoption of

new technology.

Different sources of risk that may affect agriculture are as follows: Production

Risk, Price or Market Risk, Financial and Credit Risk, Institutional Risk, Human or

Personal Risk, Legal / Policy Risk, Resource Risk, Health Risks, Assets Risks, and

Technology Risk.

Beside above mentioned risks, there are certain other problems/ risks, which have

been observed by banks officials in extending loans/ credits to agriculture sector.

These are as follows:

(i) Recovery in agriculture sector loan is often difficult; because of diversion

of loan money by farmers for purposes other than agricultural needs namely,

for social ceremonies like marriage, functions etc and sometime it is also used

for paying old debts. Apart from the above, sometimes farmers purchase

defective assets, due to which chances of loan default may increase. There is

also willful default in agriculture loan repayment, because farmers sometimes

wait if there would be any kind of wave off of loan.

(ii) Due to huge amount of agriculture loan work burden of bank officials also

increase. The main reason behind this is the number of accounts are more and

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 accounts are of small amount. So pre sanction visit, post sanction visit,

installment reminder, recovery reminders and paper work increase.

(iii) In agriculture loan there is sometimes lot of social, political and target

pressure on bank officials, who are indirectly forced to provide loans to the

person who is renowned

The diversities in the sources of risks require a variety of instruments for

protecting the farmers. In India, these include crop insurance, rainfall insurance, farm

income insurance and a calamity relief fund. Most of these measures other than crop

insurance are in the experimental stage.

In addition, there should be closed monitoring of agriculture loans and provisions of

adequate bank staffs/ officials for properly handling the huge amount of work

involved in agriculture loans.

Q.5. What are the general agricultural credit policy and initiatives taken by the

Government of India in this regard?

Ans.: The Government of India has initiated several policy measures to improve the

accessibility of farmers to the institutional sources of credit. The emphasis of these

policies has been on progressive institutionalization for providing timely and adequate

credit support to all farmers with particular focus on small and marginal farmers and

weaker sections of society to enable them to adopt modern technology and improved

agricultural practices for increasing agricultural production and productivity. The

various agriculture policies lay emphasis on augmenting credit flow at the ground

level through proper credit planning, adoption of region-specific strategies and

rationalization of lending policies and procedures. These policy measures have

resulted in the increase in the share of institutional credits of the rural households over

the years.

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Some of the special initiatives taken by the Government of India for increasing flow

of credits in the agriculture sector are as follows:

(i) Farm credit package: Government of India in its Farm Credit Package announced

in June 2004, advised banks to double credit to agriculture sector in three years, i.e.,

by 2006-07. In the subsequent annual budgets, Government of India announced

targets for credit to agriculture to ensure adequate credit flow to the sector. The flow

of agriculture credits since 2003-04 has consistently exceeded the target.

(ii) Interest subvention to farmers: Government of India announced an interest

subvention scheme in 2006-07 to enable banks to provide short term credit to

agriculture (crop loan) up to .3 lakh at 7 per cent interest to farmers. Further, to

incentivise prompt repayment, in the Union Budget for 2009-10, Government of India

announced an additional interest subvention of 1% to those farmers who repay their

short term crop loans promptly and on or before due date. This was subsequently

raised to 2% in 2010-11 and 3% in 2011-12 onwards. Thus, farmers, who promptly

repay their crop loans, are now extended loans at an effective interest rate of 4% p.a.

As proposed in the Union Budget 2013-14, Interest subvention scheme for short-term

crop loans to be continued and the scheme extended for crop loans borrowed from

private sector scheduled commercial banks

(iii) Extension of interest subvention scheme to post harvest loans: In order to

discourage distress sale by farmers and to encourage them to store their produce in

warehousing against warehouse receipts, the benefit of interest subvention scheme has

been extended to small and marginal farmers having Kisan Credit Card (KCC) for a

further period of up to six months post harvest on the same rate as available to crop

loan against negotiable warehouse receipts for keeping their produce in warehouses.

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(iv) Collateral free loans: The limit of collateral free farm loan has been increased

from 50,000 to 1,00,000.

(v) Guidelines for providing relief in the event of occurrence of natural

calamities: Reserve Bank of India (RBI) has put in place a mechanism to address

situations arising out of natural calamities. The banks have been issued necessary

guidelines for undertaking necessary credit relief measures in the event of occurrence

of natural calamities. The guidelines contain directions to banks to ensure that the

meetings of District Consultative Committees or State Level Bankers Committees

need to be convened at the earliest opportunity to evolve a co-ordinated action plan

for implementation of the relief programmes in collaboration with the State/ district

authorities.

Banks have been further advised by RBI to provide conversion/ rescheduling

of loans and consider moratorium period of at least one year in all cases of loans

restructuring. To enhance awareness, the banks are also required to give adequate

publicity to their disaster management arrangements, including the helpline numbers.

Further, the banks have been advised not to insist for additional collateral security for

such restructured loans. Asset classification for restructured loans will remain the

same as prevalent at the time of restructuring for a period of one year as per extant

guidelines. The relief measures initiated and undertaken are required to be reviewed

periodically in the weekly/ fortnightly meetings of specially constituted Task Forces

or Sub Committees of the SLBC (State Level Bankers Committee) till such time as

conditions are normalized. In addition, there has been interest subvention for loan

restructured in the drought affected states from 2012:

(vi) Kisan Credit Card (KCC) Scheme: In order to ensure that all eligible farmers

are provided with hassle free and timely credits for their agricultural operations, Kisan

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Credit Card (KCC) Scheme for farmers was introduced in 1998-99 to enable the

farmers to purchase agricultural inputs such as seeds, fertilizers, pesticides, etc. The

Kisan Credit Card (KCC) Scheme is in operation throughout the country and is

implemented by Commercial Banks, Cooperative, Banks and RRBs (Regional Rural

Banks). The scheme has facilitated in augmenting credit flow for agricultural

activities. The scope of the KCC has been broad-based to include term credit and

consumption needs of farmers. All farmers including Small farmers, Marginal

farmers, Share croppers, oral lessee and tenant farmers are eligible to be covered

under the Scheme. The KCC card holders are covered under Personal Accident

Insurance Scheme (PAIS) against accidental death/ permanent disability.

(vii) Agriculture Debt Waiver and Debt Relief Scheme (ADWDRS) 2008: To

mitigate the distress of farming community in general and small and marginal farmers

in particular and to decongest the institutional credit channels and make farmers

eligible for fresh credits, the Debt Waiver and Debt Relief Scheme (ADWDRS), 2008

was announced in the Union Budget for 2008-09. The scheme covered direct

agricultural loans disbursed (i) between 31 March 1997 and 31 March 2007 (ii)

overdue as on 31 December 2007 and (iii) remaining unpaid until 29 February 2008.

In the case of small and marginal farmers, short term production loans (subject to a

ceiling in respect of plantation and horticulture) and installments of investment loans

overdue were covered, while in the case of the other farmers, one time settlement was

extended under which a rebate of 25 per cent of the eligible amount was given on the

condition that the farmer repays the balance 75 per cent in three installments. The

debt waiver exercise was completed by 30th June 2008, whereas the debt relief

exercise was closed in June 2010 after granting a few extensions.

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(viii) National Agriculture Insurance Scheme (NAIS): The Government of India

experimented with a comprehensive crop insurance scheme which failed. The

Government then introduced in 1999-2000, a new scheme titled National

Agricultural Insurance Scheme (NAIS) or Rashtriya Krishi Bima Yojana (RKBY).

The NAIS envisages coverage of all food crops (cereals and pulses), oilseeds,

horticultural and commercial crops. It covers all farmers, both loanees and non-

loanees, under the scheme. The premium rates vary from 1.5 per cent to 3.5 per cent

of sum assured for food crops. In the case of horticultural and commercial crops,

actuarial rates are charged. Small and marginal farmers are entitled to a subsidy of 50

percent of the premium charged and the subsidy is shared equally between the

Government of India and the States. The subsidy is to be phased out over a period of 5

years. NAIS operates on the basis of the following:

Area approach- defined areas for each notified crop for widespread calamities.

On individual basis- for localized calamities such as hailstorms, landslides,

cyclones and floods.

Under the scheme, each state is required to reach to the level of Gram Panchayat as

the unit of insurance in a maximum period of 3 years. Agriculture Insurance

Corporation of India is implementing the scheme.

(C) Major Observations/ Findings:

Based on the questionnaire survey of farmers (as described in Section (A) above),

following major observations/ findings have been made in respect of agricultural loans

being offered by various banks/ financial institutions:

(1) Majority of respondents/ farmers are up to the age level of 45 years.

(2) Majority of respondents/ farmers are males.

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(3) Majority of respondents/ farmers are into other businesses or works along with

farming occupation.

(4) Maximum numbers of respondents/ farmers are availing agricultural loans for

cultivation of crops, followed by loans for animal husbandry and loans for horticulture.

(5) Maximum numbers of respondents (90%) are availing agricultural loans for assets

located in their home states.

(6) Majority of respondents/ farmers are taking agricultural loans from State

Cooperative Banks, SBI (State Bank of India) and Public Sector Banks (Other than

SBI). The general conditions and/ or procedures of sanctioning agricultural loans are

almost same in all the banks/ financial institutions (FIs). However, the numbers of

applicants for Agriculture loans are more in case of State Co-operatives rather than

banks.

(7) Majority of respondents/ farmers have availed their agricultural loans within the

last one year period.

(8) For most of the respondents/ farmers availing agricultural loans, the amount of

equated monthly installments comes out to be up to 5000 per month.

(9) The majority of farmers/ entrepreneurs who have availed agricultural loans have

paid processing fees to the tune of up to 1 per cent of loan amount.

(10) The interest rates for Agriculture loans may vary from time to time by different

banks. However, all respondents/ farmers like to avail interest on reducing balance

rather than flat rate of interest.

(11) All the respondents/ farmers have stated that in all cases of sanctioning of

agricultural loans to farmers, collaterals and/ or hypothecation of assets have been

insisted by Banks/ Financial Institutions (FIs).

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(12) Most of the respondents/ farmers have said that the repayment programmes for

agricultural loans being fixed by the banks/ financial institutions are not comfortable as

per their income levels.

(13) Most of the respondents/ farmers are not satisfied with the lending/ interest rates

being charged by banks/ financial institutions for agricultural loans and have felt the

same need to be reduced.

(14) Most of the respondents/ farmers have not attended any training/ education

programmes on proper use of agricultural financing being arranged by any banks/

financial institutions, thereby indicating that there is lack of such training programmes

in adequate numbers in rural areas.

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 SUGGESTIONS AND CONCLUSIONS

Based on the major observations/ findings from the questionnaire survey of

farmers and discussions/ interviews with the officials of banks/ financial institutions

(as described in the previous chapter) following suggestions can be made for making

various agricultural loans/ financing to farmers/ agriculture sector more attractive to

the users/ beneficiaries:

(A) Specific Suggestions:

(1) The State Government needs to take special initiatives along with bankers

associations to revisit and review the agricultural loans repayment schedule being

prescribed by various banks. The same needs to be more flexible based on ground

realities and farmers paying capacities and prevalent conditions of crops.

(2) The State Government along with bankers associations also needs to put in their

efforts to reduce the present interest rates for agricultural loans to maximum possible

extent.

(3) Various banks/ financial institutions operating in the state need to arrange

periodical training/ education programmes cum loan campaigns for farmers availing/

intending to avail agricultural loans. Such training courses should also show the most

practical ways and means of how to gainfully utilize the agricultural loans as well as

timely repay the same. The different NGOs (Non Governmental Organizations) and

SHGs (Self Help Groups) operating in the state should also be actively involved in

conducting the above training programmes for farmers.

(4) The state government agriculture department along with a team of bank officials

as well as agricultural experts/ specialists should conduct area wise/ zone wise

periodic financial surveys, so as to assess the real prevailing crop conditions and

farmers needs for finance and if necessary advise/ counsel the later for effectively
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tackling the situations. Such measure is expected to effectively address the real

financial needs of farmers and also reduce the risks for defaulting in agricultural loan

repayments. Such exercise should be conducted regularly and local gram panchayats

and NGOs/ SHGs should also be involved in the same.

Broad Suggestions:

(1) Both the Central Government as well as State Governments along with NABARD

(National Bank for Agriculture & Rural Development) should take active initiative to

make all the Banks/ Financial Institutions in Agriculture sector to critically examine

their existing interest rates, facilities, repayment periods, etc., vis--vis the

convenience level of general farmers of different categories. The overall aim should

be to undertake a thorough review of the various existing Agricultural loans, so as to

come out with a more convenient and easily acceptable and flexible terms and

conditions for various categories of such loans/ financing, since it is observed that a

major portion of Agricultural loan takers are not satisfied with the same.

(2) The promotion of the Agriculture sector in India has been an important thrust of

agricultural policy since independence though the focus of concern changed a bit with

the priorities of each five year plan. The same trend should continue in the future

plans of both Government of India as well as State Governments.

(3) Agriculture plays a vital role in Indias economy. Over 58 per cent of the rural

households depend on agriculture as their principal means of livelihood. As per the

first advanced estimates by the Central Statistical Organization (CSO), the share of

agriculture and allied sectors (including agriculture, livestock, forestry and fishery) is

expected to be 17 per cent of the Gross Value Added (GVA) during 2016-17 (at 2011-

12 prices). Hence, it is very much important to ensure proper credit flow (both

quantitatively and qualitatively) to this sector by banks/ financial institutions.

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However, certain problems/ risks have been observed by banks officials in extending

loans/ credits to agriculture sector, which are as follows:

(i) Recovery in agriculture sector loan is often difficult; because of diversion

of loan money by farmers for purposes other than agricultural needs namely,

for social ceremonies like marriage, functions etc and sometime it is also used

for paying old debts. Apart from the above, sometimes farmers purchase

defective assets, due to which chances of loan default may increase. There is

also willful default in agriculture loan repayment, because farmers sometimes

wait if there would be any kind of wave off of loan.

(ii) Due to huge amount of agriculture loan work burden of bank officials also

increase. The main reason behind this is the number of accounts are more and

accounts are of small amount. So pre sanction visit, post sanction visit,

installment reminder, recovery reminders and paper work increase.

(iii) In agriculture loan there is sometimes lot of social, political and target

pressure on bank officials, who are indirectly forced to provide loans to the

person who is renowned.

Some of the possible suggestions for solving the above problems in agriculture loan

may be as follows:

(i) Diversion of agriculture loans by farmers can be stopped/ minimized to a

large extent if tight monitoring is made by the bank officials on the use of

loans.

(ii) The overall work burden of bank officials on account of agriculture loan

can be reduced if separate category of employees are recruited by banks for

dedicatedly handling only agriculture loans cases in all agriculture branches.

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 (iii) The problem of political, social and target pressure can be minimized if

the banks insist on the qualitative aspects of the agriculture loans (instead of

quantitative criteria. For this it is essential that bank officials should be

assigned qualitative targets rather than quantitative targets.

Further for properly motivating bank officials for increasing

agriculture loans, RBI (Reserve Bank of India) may consider introducing

following measures:

(a) For bank officials, in spite of considering the total amount of loans

as a percentage target, it should be on the basis of number of accounts.

(b) Proper incentives/ rewards should be provided to bank officials for

disbursing more fruitful agriculture loans.

(4) Proper strengthening of the SHGs (Self Help Groups) and banks linkage

programme should be done by both the Central and State Governments, especially

with NABARD (National Bank for Agriculture & Rural Development), thereby

bearing promotional costs in the initial years. SHG Federations must be facilitated and

linked to various apex development agencies so that they become a vehicle of macro-

finance, human development and sustainable livelihoods for the rural poor in the

agriculture sector.

(5) Since the majority of the Indian populations are dependent on agriculture for their

livelihood, the Budgets of Government of India as well as State Governments would

need to place highest emphasis on agriculture sector in the forthcoming years. The

main objective is to be self-sufficient in food along with creation of gainful

employment.

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Conclusions:

Agriculture is set to play a more dynamic role in the Indian economy, with the

government's increased focus on the sector. Therefore, all out efforts are required to

be made by both Government of India and State Governments to make the

Agriculture sector and its stakeholders financially strong and more productive as well

as export oriented in the forthcoming years.

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 REFERENCES

Anand, S. C. (1990). Rural Banking and Development. Delhi: UDH Publishing

House.

Bhattacharya, Hrishikes. (1998). Banking Strategy - Credit Appraisal and

Decisions - A Risk Return Framework. Delhi: Oxford University Press.

Dhingra, I. C. (1993). Rural Banking in India. New Delhi: Sultan Chand and

Sons.

ACRC. (1993). A Review of the Agricultural Credit System in India, Report

of the Agricultural Credit Review Committee (ACRC), Reserve Bank of India,

Mumbai.

Giri A.K. and Dasgupta, Tamal. (1988). Some Aspects of Intra-State

Variations in the Flow of Institutional Agricultural Credit, Indian Journal of

Agricultural Economics, Conference Number, Vol. XLIII, No. 3, July-Dec.

Annual Reports and Websites of:

(i) Department of Agriculture & Cooperation, Ministry of Agriculture,

Government of India.

(ii) Department of Agriculture, Government of Uttar Pradesh.

(iii) National Bank for Agriculture & Rural Development (NABARD).

(iv) Ministry of Statistics & Programme Implementation (MOSPI),

Government of India.

(v) Agricultural and Processed Food Products Export Development Authority

(APEDA).

Website of India Brand Equity Foundation (IBEF) at www.ibef.org

Economic Survey 2016-17, Ministry of Finance, Government of India.

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 ANNEXURE

Questionnaire for Survey of Farmers:

Q.1. Age wise distribution of respondents.

Response
Between 18 to 35 years
Between 35 to 45 years
Above 45 years

Q.2. Gender wise distribution of respondents.

Response
Male
Female

Q.3. Is farming your only occupation?

Response
Yes
No

Q.4. For what purpose you have taken or are intending to take Agricultural loans?

Response
Cultivation of Crops
Animal Husbandry
Horticulture
Purchase of Agri Machinery
Others

Q.5. Whether you are availing or intend to avail agricultural loans for assets located in

your home state or other states?

Response
For Assets in Home State
For Assets in Other States

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Q.6. From which Bank/ Financial Institution you are availing/ intend to avail

Agriculture Loans for your use?

Response
State Cooperatives
SBI
Public Sector Banks Other Than SBI
Private Sector Banks
Self Help Groups/ Others

Q.7. When you have last availed or are expected to avail the Agriculture Loan?

Response
Last year
Last 2 to 5 years
Current Year
In Near Future

Q.8. What is the approximate amount of Equated Monthly Installments (EMI) you are

paying or is likely to pay for your agricultural loan?

Response
Up to 5000
Between 5001 and 10000
Above .10000

Q.9. How much processing fees/ charges you have given or are likely to give for your

agricultural loan?

Response
Up to 1% of Loan Amount
Between 1% to 2% of Loan Amount
More Than 2% of Loan Amount

Q. 10. Do you pay or likely to pay a flat rate of interest or interest on reducing

balance for agricultural loans?

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Response
Flat Rate of Interest
Interest on Reducing Balance

Q.11. Whether banks/ financial institutions are insisting or likely to insist for any

collateral and/ or hypothecation of assets for agricultural loans?

Response
Yes
No

Q.12. Do you find the repayment programmes generally fixed by the banks/ financial

institutions in respect of Agricultural loans are comfortable with your Income level?

Response
Yes
No

Q.13. Are you satisfied with the lending or interest rates in respect of Agriculture

loans being/ likely to be availed by you?

Response
Yes
No

Q.14. Have you attended any training/ education programmes on proper use of

agricultural financing being arranged by any banks/ financial institutions in your area?

Response
Yes
No

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