Good News: Farmers to Get Agricultural Loans at Lower Interest Rates

Key Highlights

• Lower interest rates for farmers at 3%.
• Bihar government provides 1% interest subsidy.
• Applies to loans up to Rs. 3 lakh from various banks.
• Kisan Credit Card offers cheap, accessible loans.
• Additional support includes accident insurance and benefits for animal husbandry and fish farmers.

Farmers need loans for various farming activities like buying fertilizers, seeds, pesticides, and equipment. Loans from moneylenders are expensive due to high interest rates, making them hard for farmers to repay. To help farmers avoid these costly loans, the government launched the Kisan Credit Card (KCC) Yojana, providing cheap loans from banks for farming.

Lower Interest Rates with Kisan Credit Card

With the Kisan Credit Card, farmers pay a very low interest rate. By repaying the loan on time, the interest rate is only 4%, compared to the actual 9% interest rate from banks. Cooperative societies and banks receive a 2% interest discount from the Center, reducing the rate to 7%. Farmers who repay on time get a further 3% discount, paying just 4% interest. Now, the state government is offering more relief with an additional 1% interest subsidy for 2024-25, making loans from cooperative banks even cheaper.

New Interest Rates for Farmers

The Bihar government will provide a 1% interest subsidy on agricultural loans for 2024-25. An agreement has been signed between the Agriculture Department and NABARD for this purpose. The state government has approved Rs 10 crore for this subsidy. This means Bihar farmers can get KCC loans at just 3% interest, making loans cheaper than before.

Eligible Banks for the Scheme

Farmers can benefit from the State Interest Subsidy Scheme by taking loans up to Rs. 3 lakh from commercial, rural, and cooperative banks. The government will provide a 1% interest subsidy under the scheme for crop loans, Kisan Credit Cards, and short-term agricultural production loans.

Eligibility for the Interest Subsidy Scheme

The State Loan Interest Subsidy Scheme applies to loans taken from April 1, 2024. Farmers who took loans before this date cannot benefit from this scheme. Companies and partnership firms are also ineligible.

The objective of the Scheme

The Agriculture Minister stated that the scheme aims to reduce the interest burden on farmers, encouraging them to take more institutional loans. This will help farmers invest in modern agricultural technology, increasing crop production. The goal is to provide cheap loans for farming, ensuring financial issues do not hinder their work.

NABARD's Role

Agriculture Department Secretary Sanjay Kumar Aggarwal announced that Rs 10 crore has been approved for the 1% interest subsidy scheme for 2024-25. NABARD has been appointed as the state agency to implement the scheme, providing loans to farmers through the Kisan Credit Card for agricultural purposes.

About the Kisan Credit Card Scheme

The Kisan Credit Card Scheme, launched in August 1998, provides short-term loans to farmers for crop cultivation, harvesting, and produce maintenance. The scheme also offers accident insurance, covering up to Rs 50,000 for death, permanent disability, and loss of limbs or eyes. Farmers pay a premium of Rs 15 for a one-year policy and Rs 45 for a three-year policy. The scheme also benefits animal husbandry and fish farmers.

Also Read: Chief Minister Kisan Kalyan Yojana: Rs 1630 Crore Transferred to Farmers

CMV360 Says

The new interest subsidy scheme by the Bihar government reduces loan interest rates for farmers, making it easier for them to invest in modern agricultural practices and boost crop production. This initiative aims to alleviate financial burdens and support farmer’s growth and sustainability.