Lok Sabha Question No. 1993 (UNSTARRED), answered on 2025-03-11
Subject: Agricultural Credit Mechanisms
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Shri Pushpendra Saroj

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE

## LOK SABHA UNSTARRED QUESTION No. 1993

## TO BE ANSWERED ON THE 11 Th  MARCH, 2025 AGRICULTURAL CREDIT MECHANISMS

1993. Shri Pushpendra Saroj:

Will the Minister of AGRICULTURE AND FARMERS WELFARE क ृ िष एवं िकसान कʞाण मंũी be pleased to state: (a)  whether  the  current  agricultural  credit  mechanisms  are  adequately  addressing  the emerging challenges of climate-resilient farming practices, if so, the details thereof, (b) the policy framework being considered to transition from input-intensive to knowledgeintensive agricultural systems; (c) the strategic approach to integrate technological innovations like nano-urea and nanoDAP into mainstream farming practices; and (d) the specific measures under consideration to build value chains where farmers receive

- 75- 80% of consumer prices similar to the dairy sector?

## ANSWER

MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE

क ृ िष एवं िकसान कʞाण राǛ मंũी (SHRI RAMNATH THAKUR)

- (a): The current agricultural credit mechanisms have been increasingly adapted to address the emerging challenges of climate-resilient farming practices, providing financial support to  farmers  to  help  them  adapt  to  the  impacts  of  climate  change.  These  initiatives  and policies have been tailored to support farmers in coping with climate-related challenges by promoting climate-smart agricultural practices, resilience, and sustainability. The details of these mechanisms are outlined below:

i.  Interest  Subvention  for  Farmers  Affected  by  Natural  Calamities: The  Kisan Credit  Cards  (KCC)  -  Modified  Interest  Subvention  Scheme  (MISS)  is  a  centrally funded scheme that provides concessional interest rates on short-term agricultural loans obtained by farmers. Under this scheme, farmers are offered KCC loans at a subsidized interest rate of 7%. An upfront interest subvention (IS) of 1.5% is provided to  financial  institutions,  and  farmers  who  repay  their  loans  promptly  receive  a  3% Prompt Repayment Incentive (PRI), reducing the interest rate to 4% per annum. In the event  of  natural  calamities,  the  scheme  offers  interest  subvention  on  restructured loans  for  the  first  year,  with  normal  interest  rates  applying  from  the  second  year. Additionally, for severe natural calamities, the scheme extends interest subvention and PRI on restructured  crop  loans  for  up  to  five  years,  based  on  the  approval  of  the competent authority. ii.  Supporting agriculture credit through Agriculture Infrastructure Fund (AIF): The  current  agricultural  credit  mechanisms,  particularly  through  the  Agriculture Infrastructure Fund (AIF), are addressing emerging challenges in Climate Resilient Farming practices. AIF provides medium to long term loans to set up decentralized Infrastructure, such as farm gate storage and logistics, which reduces post-harvest loses  and  minimizes  intermediaries.  The  Scheme  offers  loans  with  a  capped  9% interest rate, Interest subvention of 3% per annum for loans up to  ₹ 2 crore, and credit guarantee coverage for eligible borrowers. AIF supports climate-resilient initiatives like decentralized solar power plants under PM-KUSUM, precision agriculture tools, and organic input production, all of which help mitigate climate risks, improve productivity and promote sustainable farming practices. Through these measures, AIF is aligning agricultural credit mechanisms with the need for climate-smart investments, making farming more resilient and sustainable.

iii.  Supporting  Initiatives  for  Climate-Resilient  Agriculture: Other  agricultural credit mechanisms, such as the National Innovations on Climate Resilient Agriculture (NICRA)  models,  are  integrated  into  watershed  development  projects  to  promote climate-resilient  crop  cultivation  and  livestock  rearing.  Additionally,  Agri  Fintech platforms like ITC MAARS enable farmers to use Kisan Credit Cards (KCC) and input loans, facilitating the adoption of climate-smart agricultural practices.

iv. Customized Climate Financial Products: Public policies have been encouraging the  development  of  climate  financial  products  that  support  adaptation  activities  in regions vulnerable to climate change.  These  products  provide  incentives for investments  in  infrastructure  and  technologies  that  enhance  climate  resilience  in agriculture. For example, NABARD's involvement in the Green Climate Fund (GCF) and  the  National  Adaptation  Fund  for  Climate  Change  (NAFCC)  has  directed significant resources toward projects aimed at adapting to and mitigating the impact of climate change in agriculture. v. Promotion of Renewable Energy in Agriculture: The government has launched several  initiatives  to  promote  renewable  energy  in  agriculture,  which  is  crucial  for reducing carbon emissions and ensuring energy stability in rural areas.  Such as PMKUSUM scheme offers financial  assistance  to  farmers  for  installing  solar-powered irrigation systems, solar pumps and grid-connected solar power plants. This reduces the  dependency  on  conventional  energy  sources,  lowers  carbon  emissions  and enhances energy access for farmers. The scheme provides central subsidies of up to 30% to 50% for the installation of standalone solar pumps and for solarizing existing grid-connected agricultural pumps. vi. NABARD's Initiatives for Climate Resilience: NABARD has been implementing the Watershed Development Programme, focusing on rainfed regions vulnerable to water scarcity. This program aims to increase water availability, promote the adoption of  diverse  and  high-value crops, improve  production  and  productivity  and enhance farming  conditions.  These  interventions  reduce  the  risks  associated  with  rainfed farming, resulting in improved credit flow.  NABARD also supports tribal families by providing financial assistance for livelihood activities, such as orchard development, animal  husbandry  and  micro-enterprise  initiatives.  This  contributes  to  sustainable livelihoods and reduces distress migration. vii. Voluntary carbon market in Agriculture: 11 projects have been registered under the Voluntary Carbon Market (VCM) in agriculture on the Veera VCS platform, which focuses on promoting sustainable farming practices. (b)The  government  is  developing  Digital  Public  Infrastructure  (DPI)  in  agriculture namely AgriStack for developing evidence based and data driven Decision Support System (DSS). By equipping farmers with knowledge and innovations, these efforts aim  to  improve  productivity,  reduce  risks  and  enable  farmers  to  adapt  to  climate variability, ensuring long-term agricultural sustainability. Further, the policy framework

mentioned above at point (a) is also being developed to facilitate the transition from input-intensive  agriculture  to  knowledge-based  and  climate-resilient  farming.  This transition emphasizes the use of advanced technologies, better access to information and  knowledge  dissemination  to  farmers.  It  includes  promoting  digital  to  tools, precision agriculture, and real-time advisory services.

The  Government  of  India  is  actively  transitioning  from  input-intensive  to knowledge-intensive  agricultural  systems  to  enhance  sustainability,  efficiency,  and productivity in the sector. Key initiatives such as the Kisan Rin Portal are playing a significant role in this shift. The portal connects 1.89 lakh bank branches and provides farmers  with  easy  access  to  financial  resources,  enabling  them  to  the  increasing working capital requirements like high-quality seeds etc. This encourages the adoption of sustainable, technology-driven farming practices. Additionally, the portal supports integrated farming systems by offering loans for diverse agricultural activities, fostering organic  inputs  and  reducing  reliance  on  chemical  fertilizers.  NABARD  is  also promoting  knowledge-intensive  agriculture  by  collaborating  with  ICAR,  KVKs,  and other research bodies, focusing on sustainable farming practices, natural farming, and farm mechanization. NABARD  funds  digital agriculture projects that leverage technologies like IoT, AI, drones, and geospatial tools for efficient farm management. Furthermore,  ICAR  and  National  Agricultural  Research,  Education  and  Extension System  (NAREES)  also  contributes by developing resilient crops,  enhancing productivity through sustainable practices, and improving food processing and energyefficient  technologies. The government is also encouraging the use of GIS, remote sensing, and AI for precision farming, which helps farmers make informed decisions to increase crop yields and minimize resource waste. Through these combined efforts, the government aims to build a knowledge-intensive agricultural system that enhances productivity, reduces environmental impact, and improves farmers' livelihoods.

## (c): The following strategic approach has been devised to integrate technological  innovations  like  nano-urea  and  nano-DAP  into  mainstream farming practices:

i.  Use  of  Nano  Fertilizer  (Nano  Urea/  Nano  DAP)  is  promoted  through  different activities such as awareness camps, webinars, nukkad nataks, field demonstrations, Kisan Sammelans and films in regional languages etc.

- ii.  Nano  Fertilizer  is  made  available  at  Pradhan  Mantri  Kisan  Samridhi  Kendras (PMKSKs) by concerned companies.

iii. Nano Fertilizer has been included under monthly supply plan issued by Department of Fertilizers regularly.

- iv. ICAR through Indian Institute of Soil Science, Bhopal recently organized National Campaign on "Efficient and Balanced Use of Fertilizer (including Nano-fertilizers)".
- v.  Promotion  of  use  of  nano  fertilizers  is  also  being  done  during  various  outreach campaigns.
- vi. With an aim to provide drones to 15,000 women Self Help Groups (SHGs), the Government of India has launched the 'Namo Drone Didi' Scheme. Under the said scheme, 1094 drones have been made available to Namo Drone Didis of Women Self Help  Groups,  which  is  ensuring  increased  application  of  nano  fertilizers  through drones.

vii. Department of Fertiliser (DoF) in collaboration with fertilizer companies has initiated a Maha Abhiyan for adoption of Nano DAP in all 15 agro-climatic zones of the country through consultations and field level demonstrations. Further, DoF in collaboration with fertilizer companies has also launched campaign for field level demonstrations and awareness programs of Nano Urea plus in 100 districts of the country.

- (d): The  Agri  Infrastructure  Fund  (AIF)  in  Department  of  Agriculture  and  Farmers Welfare (DA&FW) is focused on building agricultural value chains that ensure farmers receive 75-80% of consumer prices, similar to the dairy sector. The AIF aims to bridge gaps  in  post-harvest  management  and  processing  infrastructure,  improving  price realization for farmers, reducing waste, and enhancing market access. It decentralizes infrastructure by supporting farm-level storage, logistics, and value addition, reducing dependency on intermediaries and bringing farmers closer to consumers, especially for perishable goods. The fund provides affordable financing with a 9% interest cap, along  with  subsidies  and  guarantees,  enabling  farmers  and  agri-entrepreneurs  to invest in essential infrastructure like modern  warehouses,  cold  storage,  and

processing  facilities.  Furthermore,  it  promotes  investments  in  farming  assets  like organic inputs,  seed  processing, farm automation,  and renewable  energy projects, improving productivity and sustainability. These measures are designed to create a more farmer-centric value chain, enabling farmers to move up the value chain and secure  higher  incomes  while  ensuring  high-quality  produce  reaches  consumers  at competitive  prices.  Further,  in  Department  of  Animal  Husbandry  and  dairying (DAH&D), the dairy sector's model, where cooperatives ensure farmers receive the majority of the consumer price, serves as a reference for this value chain development approach.

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