Crop loans now account for approximately 77% of total agriculture credit in Rajasthan and Uttar Pradesh, an increase of 7-8 % points over the last five years, compared to the national average of 59–61% over the same period.
The other type of agricultural credit is term loans, which vary in duration depending on the bank, the scheme/purpose, and the beneficiary’s ability to repay. Crop loans are short-term credit for farmers, with repayment cycles lasting 1-2 seasons. Credit up to ₹3 lakh is disbursed through the Kisan Credit Card (KCC), which is used by 7.36 crore farmers (based on operative KCC account data) as of December 31, 2023.
Banks have disbursed ₹18,44,767.32 crore in agriculture credit up to December 31 in the current fiscal, with ₹11,26,160.72 crore for crop loans and ₹7,18,606.60 crore for term loans, official sources said. The government’s target for farm credit is ₹20 lakh crore, but the actual disbursement in the previous fiscal was ₹21.55 lakh crore.
Awareness
“This could be due to KCC campaigning and increased participation in the scheme. The penetration in both Uttar Pradesh and Rajasthan has increased under KCC. Farmers who had previously refused crop loans have now accepted them, according to a top government official.
From April to December 2023–24, crop loans totaling ₹86,424.62 crore were disbursed in Rajasthan, accounting for 77% of the total farm credit reported in the state. In 2019–20, crop loans accounted for more than 70% of the total agriculture credit disbursement of ₹95,051 crore.
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In Uttar Pradesh, crop loans worth ₹1,00,365.54 crore were disbursed until December 31 in the current fiscal, accounting for 77% of the total farm credit reported in the state. In 2019–20, crop loans accounted for more than 68% of the total agriculture credit disbursement of ₹1.09 lakh crore.
State wise crop loan share
This year, the State’s crop loan share in total farm credit disbursal was higher than the national average share (crop loan) in Haryana (69%), Punjab (73%), and Madhya Pradesh (69%), according to data.
On the other hand, West Bengal has reported a significant increase in crop loan disbursement, with its share of total farm credit rising from 24% in 2029–20 to 42% as of December 31, 2023–24. Farmers received crop loans worth nearly ₹22,000 crore this year, compared to ₹13,620 crore in 2019-20.
In the North-East, crop loans account for only 40% of total farm credit, despite a significant increase from 18% in 2019-20. This year, the region has already received up to ₹4,852 crore in farm loan disbursements.
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For fiscal year 2023–24, the RBI mandates a priority sector lending target for banks, with 18% allocated specifically to agriculture and a 10% sub-target for Small and Marginal Farmers (SMFs). KCC offers farmers a short-term crop loan with 2% interest subsidy up to ₹3 lakh and an additional 3% prompt repayment incentive (PRI) if repaid within six months to one year.
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