Top Central Government Schemes to Provide Financial Support to Farmers

Table of Contents

• Introduction
• Top Central Government Schemes to Support Farmers Financially
  • Interest Subvention Scheme
  • Pradhan Mantri Kisan Man Dhan Yojana
  • Pradhan Mantri Kisan Samman Nidhi Yojana
  • Kisan Credit Card Scheme
  • Pradhan Mantri Fasal Bima Yojana (PMFBY)
• Conclusion

Introduction

Agriculture in India is prone to fluctuations in price and output as it is largely dependent upon South-West monsoon. This impacts the farmers the most. To address it, the Central Government has launched various financial support schemes for the welfare of the farmers. The overall aim of these schemes is to uplift the economic conditions of the farmers and revitalise the agriculture sector.

Top Central Government Schemes to Support Farmers Financially

The Central Government from time to time launch various financial support schemes for farmers’ welfare. Some of the prominent schemes are Pradhan Mantri Kisan Samman Nidhi, Pradhan Mantri Kisan Man Dhan Yojana, Interest Subvention Scheme, and PM Fasal Bima Yojana, among others. we have discussed each one of them with their salient features.

Interest Subvention Scheme

Interest subvention scheme provides loan to farmers at discounted rate or less interest rate compared to prevailing market interest rate. Under the Interest Subvention Scheme launched in 2015-16,

• An interest subvention of 3% is provided on the short-term crop loan of up to INR 3 lakhs.
• If, the prevailing interest rate on loan to farmers is 7%, then it gets reduced to 4% on prompt repayment.
• In case of natural calamities, an interest subvention of 2% is provided to the banks on the restructured loan amount for the first year.
• The benefit of the scheme is available to small and marginal farmers holding KCC for a further period of 6 months from the harvest of crops.

Pradhan Mantri Kisan Man Dhan Yojana

Pradhan Mantri Kisan Man Dhan Yojana (PMKMDY) was launched by the Central Government on 12 September 2019. Some of the salient features of the schemes are:

• The scheme is designed to provide social security and financial support for Small and Marginal Farmers (SMF) in their old age.
• Under this program, approximately 5 crore marginalized farmers will receive a minimum monthly pension of INR 3,000 upon reaching the age of 60.
• Eligibility Criteria: To qualify for the scheme, the following criteria apply to Small and Marginal Farmers:
  • Entry age must be between 18 to 40 years.
  • Ownership of cultivable land up to 2 hectares, as indicated in the land records of the respective State/Union Territory.

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) was launched in February 2019 and effective from December 2018. Some of the key features are:

• The PM-KISAN scheme aims to provide direct income support to small and marginal farmers.
• Under this scheme, eligible farmers receive financial assistance of INR 6,000 per year, which is paid in three equal instalments of Rs. 2,000 each.

• Targeted towards small and marginal farmers, the scheme has a pan-India reach, covering all states and union territories.
• The financial assistance is provided directly into the beneficiaries' bank accounts through Direct Benefit Transfer (DBT).
• Farmers are required to submit documents such as Aadhaar cards, bank account details, landholding papers and citizenship certificates.

PM-KISAN has been instrumental in providing financial relief to farmers, helping them cope with various agricultural expenses and contributing to their economic well-being.

Kisan Credit Card (KCC) Scheme

• The Kisan Credit Card (KCC) Scheme was launched in the year 1998 to provide timely and adequate credit to farmers for their short-term needs. Under the scheme,
• An interest subvention of 2% on loan and a prompt repayment incentive of 3% is provided.
• Credit is provided at a subsidized annual interest rate of 4% for various purposes, including:
  • Marketing loans for agricultural produce.
  • Meeting the consumption needs of farmer households.
  • Covering post-harvest expenses.
  • Fulfilling investment credit requirements for agriculture and related activities.
  • Securing working capital for the upkeep of farm assets and activities associated with agriculture.

Pradhan Mantri Fasal Bima Yojana (PMFBY)

The Pradhan Mantri Fasal Bima Yojana was launched from Kharif Season 2016. The umbrella agriculture insurance scheme replaces the erstwhile National Agriculture Insurance Scheme (NAIS). Some of the salient features of the scheme are:

• Comprehensive crop insurance coverage from pre-sowing to post-harvest losses against non-preventable natural risks.
• Risk mitigation tools for farmers at low premium rates:
  • 2% for Kharif crops
  • 1.5% for Rabi crops
  • 5% for annual commercial/horticultural crops
• Actuarial premium shared equally (50:50) by Central and State Governments.
• Voluntary participation for States and applicable in crops and areas notified by respective State governments.
• Mandatory for loanee farmers, optional for non-loanee farmers.

Conclusion

The Indian government's commitment to the welfare of farmers is evident through these top central government schemes. From direct income support to the promotion of collective farming initiatives and the development of agricultural infrastructure, these schemes aim to address the various challenges faced by farmers and empower them to lead more prosperous lives. By providing financial support, access to technology, and market linkages, these initiatives are not just about improving farmers' income but also ensuring food security and overall rural development in the country.