Economic Survey | India's credit initiatives boost agri growth — A look at key schemes

It is a central sector scheme to supplement the financial needs of land-holding farmers. The financial benefit of Rs 6,000 per year is transferred into the bank accounts of farmer families through DBT. About 11.3 crore farmers were covered under the scheme in its April-July 2022-23 payment cycle. The scheme, through a span of over three years, has successfully provided assistance of more than Rs 2 million to crores of needy farmers.

Many studies and findings indicate that the PM KISAN scheme has helped farmers towards productive investment in agricultural activities, the survey said.

AIF is a financing facility operational from 2020-21 to 2032-33. Under this, a provision of Rs 1 lakh crore for 2020-21 to 2025-26 has been made, and interest subvention and credit guarantee assistance will be given until 2032-33.

Since its inception, an amount of Rs 13,681 crore has been sanctioned for agriculture infrastructure in the country, covering more than 18,133 projects. These include 8,076 warehouses, 2,788 primary processing units, 1,860 custom hiring centres, 937 sorting and grading units, 696 cold store projects, 163 assaying units and around 3613 other kinds of post-harvest management projects and community farming assets, the survey said.

PMFBY is currently the largest crop insurance scheme in the world regarding farmer enrolments, averaging 5.5 crore applications every year and the third largest in terms of the premium received. The scheme promises minimal

financial burden on the farmer, with them paying only 1.5 percent and 2 percent of the total premium for the Rabi and Kharif seasons, respectively, with Centre and State Governments bearing most of the premium cost.

During the last six years of its implementation, farmers paid a premium of Rs 25,186 crore and received claims amounting to Rs 1.2 lakh crore (as of October 31, 2022).

The acceptability of the scheme amongst the farmer can be ascertained from the fact that the share of non-loanee, marginalised, and small farmers have increased by 282 percent since the scheme’s inception in 2016, the survey said.

Several expert groups have identified horticulture as a high-growth area and a source of buoyant income and improved resilience for farmers. The scheme to promote horticulture covering fruits, vegetables, root and tuber crops, spices, flowers, plantation crops etc., was introduced in 2014-15.

The interventions include introducing improved varieties and quality seeds, incentives for plantation crops, cluster development, and post-harvest management. According to third advance estimates (2021-22), a record production of 342.3 million tonnes in an area of 28.0 million hectares was achieved.

The government has identified 55 horticulture clusters, of which 12 have been selected for the Cluster Development Programme (CDP) pilot phase. This programme is designed to leverage the geographical specialisation of horticulture clusters and promote integrated and market-led development of pre-production, production and post-harvest activities, including the entire

supply chain, the survey said.

India launched the National Agriculture Market (e-NAM) Scheme in 2016 to create an online transparent, competitive bidding system to ensure farmers get remunerative prices for their produce. Under the e-NAM Scheme, the government provides free software and assistance of Rs 75 lakh per APMC mandi for related hardware, including quality assaying equipment and the creation of infrastructure like cleaning, grading, sorting, packaging, compost unit, etc.

As on December 31, 2022, more than 1.7 crore farmers and 2.3 lakh traders have been registered on e-NAM portal 8.17 Climate-Smart Farming Practices: This is slowly gaining acceptance with farmers using clean energy sources like solar for irrigation. The farmers have been incentivised to transfer electricity generated through solar to the local grid.

Crop yield prediction models using artificial intelligence and drones for monitoring soil and crop health have been initiated. Smart farming also enables crop diversification, which will help farmers reduce their dependence on monsoons for water. There are over 1,000 agritech start-ups in India. These assist farmers in improving farming techniques, the survey said.

The Kisan Credit Card Scheme (KCC) was introduced in 1998 for farmers to empower them to purchase agricultural products and services on credit at any time. As of December 30, 2022, banks issued Kisan Credit Cards (KCC) to 3.89 crore eligible farmers with a KCC limit of Rs 4,51,672 crore. With the Government of India extending the KCC facility to fisheries and animal husbandry farmers in 2018-19, the number of such cards in the fisheries and animal husbandry sector has also grown.

As a result of the initiatives taken and the measures to strengthen existing policies, there has been a consistent increase in the agriculture credit flow over the years, exceeding the target every year for the past several years. In 2021-22 also, it was about 13 percent more than the target of Rs 16.5 lakh crore. The target for the flow of credit to agriculture for 2022-23 has been

fixed at Rs 18.5 lakh crore.

To ensure that the farmers pay a minimal interest rate to the banks, the Government of India has introduced the Interest Subvention Scheme (ISS), now renamed Modified Interest Subvention Scheme (MISS), to provide short-term credit to farmers at subsidised interest rates. Under this scheme, short-term agriculture loan up to Rs 3 lakh is available at 7 percent per annum to farmers engaged in Agriculture and other Allied activities, including Animal Husbandry, the survey said.