Things you will know after reading this article:
- What is an agricultural loan?
- Types of agricultural loan
- Eligibility criteria
People take loans for catering innumerable purposes, carrying out family responsibilities, and to make such things possible there is a wide range of loans to choose from. There are loans where you avail a certain amount of money and are free to spend it on your own will without any monitoring of the expenditure, then there are loans specific for specific goals in life, with more flexible criteria such as home loan, car loan, education loan, gold loan and even Agricultural loan, a loan for the heroes of our country who work hard day and night, throughout the year to ensure the food on our plates. Though this might not be very well heard of, it is a benefitting program for the ones in the need of it. Let’s discuss in detail what is an Agricultural loan and its whereabouts:
Agricultural loans are availed by a farmers, who wish to sanction a loan to fund seasonal agricultural yeilds or similar activities like, pisciculture, animal farming or poultry farming, purchase of land, farming or agricultural tools including the farming machinery. This type of loan also helps buying inputs such as fertilizers, seeds, insecticides etc. and engaging labour for cultivating and harvesting the crops. The loan also covers:
- purchasing of land
- purchasing of agricultural tools
- storage of produce and transport
- cost of ploughing land for sowing
There is very a long list of types of agricultural loans available, discussed below:
- Agricultural Term Loan: These are long term loan schemes which a farmer can avail tto fulfil their non-seasonal expenditures. A farmer can avail this loan to buy or upgrade equipment such as windmills, solar power, etc. The repayment tenure for such kind of loan schemes can go up to 4 years making it possible for the farmer to repay the loan in a stress free manner.
- Loan for Allied Agricultural Activities: Farmers involved in allied agricultural activities can apply for such type of loans if they need to raise working capitals to meet their farming expenditures.
- Solar Pump Set Loan: If a farmer is involved in small irrigation projects and require capital to buy photo voltaic pumping system or any other high end machinery, then availing a solar pump set loan is the appropriate option. The repayment tenure for such loan schemes go up to 10 years.
- Crop Loan: These types of loans are also known as Retail Agri Loans is a type of loan which allows a farmer to meet his short-term expenses arising due to cultivation of crops, maintenance of farm equipment, and other post farm activities. The farmer gets a credit card called the Kisan Credit Card on availing this type of loan which they can use to withdraw money to make necessary purchases to meet their farming needs.
Few more variations of agricultural loans:
- Agricultural Gold Loan: The applicant can avail this type of loan by pledging their gold ornament as security. The loan amount can be used to meet various farming expenses such as buying machineries or to meet cost related to cultivation of crops. These types of loans are generally offered at a low interest rate and also allows a farmer to use their gold which would otherwise stay idle.
- Horticultural Loan: Farmers involved in setting up vegetable farms and orchards can apply for a horticultural loan which not only allows them to meet the cost of managing such type of farms, but also helps in meeting the expenses related to other horticulture activities such as clearing wild trees, setting up fence, etc.
- Forestry Loan: If a person is involved in growing crops which grows on trees, then they can apply for a forestry loan. The loan amount can be used to meet the cost of activities
- such as converting a barren land into a farming land, setting up irrigation channels, clearing wild trees, etc.
Who is eligible for an agricultural loan?
- The borrower should be at least be of the age 18 years, and maximum to the age of 70 years.
- Should be a citizen of India.
- The documents of all the necessities should be available, as they are to be hypothecated to the bank.
- The loan can be individual or joint either.
|DOCUMENT REQUIRED FOR:||IMPORTANCE||DOCUMENTS THAT YOU CAN PROVIDE|
|IDENTITY PROOF||The bank needs to know that the individual opening an account is the citizen of India, and the document has a photograph of the person opening the account.||PassportPAN cardDriving licenceRation CardBirth certificateSC/ST/OBC certificates|
|ADDRESS PROOF||The address of India further proves the citizenship and identity of the individual.||Voter ID cardUtility billsPermanent driving licence Ration cardAadhar card|
Agricultural loans are a boon to farmers who need a little help in order to climb higher. These loans serve the heroes of our nation, the farmers by making their livelihood a little less stressful, by the flexible and long list of plans available!