Benefits of Schemes to Farmers

Benefits of Schemes to Farmers

Press Information Bureau 
Government of India
Ministry of Agriculture & Farmers Welfare

31-July-2018 18:47 IST

Benefits of Schemes to Farmers 

Government Schemes are intended to help all farmers across the country and roughly 85 per cent of the total operational holdings in the country (about 43 per cent of the gross cropped area) are in the Small and Marginal Farmers (SMFs) category.  As far as the issue of such farmers qualifying for loans is concerned, the Govt. has taken several measures to facilitate their access to institutional credit including inter-alia:-

i) The Reserve Bank of India (RBI) has issued Priority Sector Lending Guidelines    (PSL), which mandate all Domestic Scheduled Commercial Banks to earmark 18% of their Adjusted Net Bank Credit (ANBC) or Credit Equivalent amount of Off-Balance Sheet Exposure (OBE), whichever is higher, as on the corresponding date of the previous year, for lending to Agriculture and within the 18 percent target for agriculture, a sub-target of 8 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, (whichever is higher) has been prescribed for SMFs.

ii)As per PSL guidelines, loans to distressed farmers to repay non-institutional lenders are eligible under priority sector. Besides loans to stressed persons (other than farmers) not exceeding Rs. 1,00,000/- per borrower to repay their debt to non-institutional lender are also eligible for the purpose of priority sector lending by banks.

iii)The Kisan Credit Card (KCC) Scheme enables eligible farmers to draw cash through ATM enabled debit card to purchase agricultural inputs such as seeds, fertilisers, pesticides as well as meet other agricultural and consumption needs.

iv)To bring small, marginal, tenant farmers, oral lessees, etc. into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks. The Government also promotes formation of Farmer Producer Organisations (FPOs) in a big way to enable farmers to leverage economies of scale, not only for agricultural inputs but also for enhanced marketing opportunities.

v)Vide RBI’s circular dated 18th June, 2010 the Banks have been advised to waive margin/security requirements of agricultural loans upto Rs.1,00,000/-.

vi)Further, with respect to lessee cultivators (tenant farmers), since leases are informal and may not constitute appropriate legal document for purposes of loan from institutional sources, the NITI AAYOG has formulated Model Agricultural Land Leasing Act, 2016 to provide a legal and institutional framework for legalisation of agricultural land leasing. This is with a view to facilitate financial institutions to advance agricultural loans to lessee cultivators.    Following NITI AAYOG’s Model Act, Uttrakhand and Uttar Pradesh have legalised land leasing. 

The Government of India fixes Minimum Support Price (MSP) for both Kharif and Rabi crops based on the recommendations of the Commission on Agriculture Costs & Prices (CACP). The Commission collects & analyses data on cost of cultivation and recommends MSP.  While recommending its Price Policy, the CACP considers all costs in a comprehensive manner.  The costs include all paid out costs such as those incurred on account of hired human labour, bullock labour/machine labour, rent paid for leased in land, expenses irrigation charges, depreciation on implements and farm buildings, interest on working capital, diesel/electricity for operation of pump sets etc., miscellaneous expenses and imputed value of family labour.  Hence the costs considered are very comprehensive and based on the methodology recommended by Expert Committees from time-to-time. 

In the Union Budget for 2018-19, the Government had announced that MSP for all Kharif crops not hitherto covered will be 1.5 times the cost of production.  This was followed by Government decision of 4th July, 2018 to increase MSPs for all Kharif crops for 2018-19 season at a level of at least 150 percent of the cost of production. 

The MSP declared during 2012-13 to 2018-19 for various crops is Annexed.

Further, to inculcate discipline for timely repayment of short term crop loans  Government has also provided for prompt repayment incentive under Interest Subvention Scheme (ISS). 


Lok Sabha Unstarred Question No. 2120 due for 31.07.2018 regarding 'Benefit of Schemes to Farmers' (7 years MSP Statement)
Rs Per Quintal
S. No.CommodityVariety2012-132013-142014-152015-162016-172017-182018-19
Grade 'A'1280134514001450151015901770
9COTTONMedium Staple3600370037503800386040205150
Long Staple3900400040504100416043205450
10GROUNDNUT IN SHELL37004000400040304220*4450^4890
11SUNFLOWER SEED37003700375038003950*4100*5388
12SOYABEENBlack220025002500- - - -
Yellow ##22402560256026002775*3050^3399
17GRAM3000310031753500**4000^[email protected]
18MASUR (LENTIL)2900295030753400**[email protected]4250*
(Calender Year)Ball5350550055005830624067857750
23DE-HUSKED COCONUT  (Calender Year)1400142514251500160017602030
Fair and remunerative price.
##Single MSP of Soyabean (yellow)is recommended by CACP since 2015-16,as black variety of soyabean is no longer
Cultivated in major producing states.  Since 2015-16,MSP of Soyabean yellow is also applicable to black variety
*Including Bonus of Rs. 100 per quintal.
**Including Bonus of Rs. 75 per quintal .
^Including Bonus of Rs. 200 per quintal.
^^Including Bonus of Rs. 425 per quintal.
@including bonus of Rs. 150 per quintal

This Information was given by the Minister of State for Ministry of Agriculture & Farmers Welfare Shri Gajendra Singh Shekhawat

Source: PIB

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