Q.What are the sources of agriculture finance?

The Kisan Credit Card is a banking scheme that gives farmers a simple, flexible credit facility for crop and farm expenses at reasonable interest, reducing their dependence on moneylenders.

This is a 2-mark short note in the AP Intermediate 2nd-year Economics agricultural-finance unit.

The Kisan Credit Card scheme was introduced so that farmers can get timely and adequate credit from banks in a simple way. Under it, a farmer is given a credit card and a sanctioned credit limit based on landholding and cropping, which can be used to buy seeds, fertilisers, pesticides and to meet other agricultural and household needs. Credit is available at reasonable interest and the farmer can draw and repay flexibly, usually linked to the harvest. …

The Kisan Credit Card, launched in 1998, lets farmers obtain timely, flexible short-term credit from banks for cultivation and allied needs at reasonable interest, reducing their dependence on moneylenders. This is an AP Intermediate 2nd-year Economics topic on agricultural finance.

The Kisan Credit Card (KCC) is a credit-delivery scheme for farmers introduced in 1998 by banks with the support of NABARD and the Reserve Bank of India. Its main features are:

1. Farmers are issued a credit card and passbook that allow them to draw loans up to a sanctioned limit whenever needed.
2. It provides timely and adequate short-term credit for crop production, purchase of seeds, fertilizers and pesticides, and for allied and household needs.
3. The procedure is simple and flexible, and credit can be drawn and repaid repeatedly within the limit.
4. Interest rates are low and, with government interest subvention, affordable.
5. It reduces farmers' dependence on village moneylenders and helps check rural indebtedness. …

Agricultural finance comes from non-institutional sources (moneylenders, traders) and institutional sources (cooperatives, banks, NABARD).

Non-institutional sources: village moneylenders, relatives, landlords, and traders/commission agents — historically the dominant source, but often associated with high interest rates and exploitation.

…