The lending to agriculture sector will include the following:

  1. Farm Credit  for Agriculture and Allied Activities. 
  2. Lending for Agriculture Infrastructure and Ancillary Activities.

Farm Credit – Individual Farmers

Loans to individual farmers including Self Help Groups or Joint Liability Groups i.e. groups of individual farmers provided banks maintain disaggregated data i.e. detailed sub-categories of such loans.

Farm Credit- Proprietorship Firms of Farmers

Loans to proprietorship firms of farmers, directly engaged in Agriculture and Allied Activities such as dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture. 

Permitted Activities under Farm Credit for Individuals & Proprietorship.
  • Crop loans including loans for plantations, horticulture and allied activities.
  • Medium and long-term loans for agriculture and allied activities. 
  • Loans for pre and post-harvest activities. 
  • Loans to distressed farmers indebted to non-institutional lenders.
  • Loans under the Kisan Credit Card Scheme.
  • Loans to small and marginal farmers for purchase of agricultural land.
  • Loans against pledge and hypothecation of agricultural produce including warehouse receipt but not exceeding the period 12 months and amount ₹50 lakhs.
  • Loans for installation of stand-alone Solar Agriculture Pumps.
  • Loans for solarisation of grid connected Agriculture Pumps.
  • Loans for installation of solar power plants on barren or fallow land.
  • Loans for installation of solar power plants in stilt fashion on agriculture land owned by farmers.

Farm Credit  for Non-Individual Categories

Corporate Farmers, Farmer Producer Organisations (FPOs)/(FPC), Companies of Individual Farmers, Partnership firms and Co-operatives of farmers engaged in Agriculture and Allied Activities.

Permitted Activities for Finance under Non-Individual Categories

Subject to an aggregate limit of ₹2 crore per borrowing entity

  • Crop loans for plantations, horticulture and allied activities.
  • Medium and long-term loans for agriculture and allied activities.
  • Loans for pre and post-harvest activities viz. spraying, harvesting, grading and transporting of their own farm produce.
  • Loans against pledge/hypothecation of agricultural produce including warehouse receipt but not exceeding the period 12 months and amount  ₹50 lakh.

Loans up to ₹5 crore per borrowing entity to FPOs/FPCs undertaking farming with assured marketing of their produce at a predetermined price.

Agriculture Infrastructure

Loans for agriculture infrastructure will be subject to an aggregate sanctioned limit of ₹100 crore per borrower from the banking system.

Activities Permitted under Agricultural Infrastructure
  • Loans for construction of storage facilities like warehouse, market yards, godowns, cold storage to store agricultural produce or products.
  • Soil conservation and watershed development.
  • Plant tissue culture and agri-biotechnology, seed production, production of bio-pesticides, bio-fertilizer, and vermicomposting.
  • Oil extraction and processing units for production of bio-fuels, their storage and distribution infrastructure.
  • Loans to entrepreneurs for setting up Compressed Bio Gas (CBG) plants.

Ancillary Services

Following loans under ancillary services will be subject to limits prescribed as under:

  • Loans up to ₹5 crore to co-operative societies of farmers for purchase of the produce of members (Not applicable to UCBs).
  • Loans up to ₹50 crore to Start-ups, as per definition of Ministry of Commerce and Industry, Govt. of India that are engaged in agriculture and allied services.
  • Loans for Food and Agro-processing up to an aggregate sanctioned limit of ₹100 crore per borrower from the banking system. 
Activities permitted under Ancillary Services
  • Loans for setting up of Agri-clinics and Agri-business centres.
  • Loans to Custom Service Units managed by individuals, institutions or organizations who maintain a fleet of tractors, bulldozers, well-boring equipment, threshers, combines, etc., and undertake farm work for farmers on contract basis.
  • Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies (FSS) and Large-sized Adivasi Multi-Purpose Societies (LAMPS) for on-lending to agriculture.
  • Loans sanctioned by banks to MFIs for on-lending to the agriculture sector.
  • Loans sanctioned by banks to registered NBFCs, other than MFIs. 
  • Outstanding deposits under RIDF and other eligible funds with NABARD on account of priority sector shortfall.

Small and Marginal Farmers (SMFs)

For the purpose of computation of achievement of the sub-target, Small and Marginal Farmers will include the following:

  • Farmers with land holding of up to 1 hectare (Marginal Farmers).
  • Farmers with a landholding of more than 1 hectare and up to 2 hectares (Small Farmers).
  • Landless agricultural labourers, tenant farmers, oral lessees and share-croppers whose share of landholding is within the limits prescribed for SMFs.
  • Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual SMFs directly engaged in Agriculture and Allied Activities, provided banks maintain disaggregated data of such loans.
  • Loans up to ₹2 lakh to individuals solely engaged in Allied activities without any accompanying land holding criteria.
  • Loans to FPOs/FPC of individual farmers and co-operatives of farmers directly engaged in Agriculture and Allied Activities where the land-holding share of SMFs is not less than 75 percent. 
    UCBs are not permitted to lend to co-operatives of farmers