The agriculturist needs credit for a variety purposes and for different periods. Firstly hen’ short-term credit (up to 15 months) for the pure of requirements of current production (seed, furriers, pesticides, electricity, diesel, cattle feeder of farm implements, wages to hired labourers, and to meet the consumption needs of his family the harvest of the crop.
Secondly, he requires odium-term finance (up to 5 years) for such pup as buying cattle and implements, undertaking of wells or other minor irrigation works, effecting substantial improvement to land. Find requires long-term finance (for over five ye for such purposes as purchase of land, subs tan investment in pumping-sets, farm machinery orchards, and to repay old loans.
In earlier times, the agriculturists mostly rowed from non-institutional sources such as mo lenders, traders, commission agents and relate The All-India Rural Credit Survey 1951 -52 should that of the total rural credit secured by three clitoris, money lenders accounted for 69.7%, relate 14.2%, traders and commission agents 5.5%, operatives 3.1%, government agencies 3.3% others 4.2%.
This led to allot of exploitation money lenders charging exorbitant retiled and fraudulently grabbing the property of the’ rower and forcing him to act as bonded laborer, present farmers are getting agricultural through co-operatives, commercial banks regional rural banks.
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In 1975-76 the total agricultural credit was 1674.6 crore rupees which inure to Rs. 3,435.6 crores in 1980-81, 12,329 crores 1989-90 and Rs. 15,455 crores in 1991-92. When cooperatives provided bulk of the credit facilities 1975-76 (71%) their place has now been taken scheduled commercial and regional rural banks (6 in 1990-91).
As at the end of March, 1997, pub sector banks extended Rs. 31,012 crore constituti1 16.4 percent of the net bank credit to the agricultural sector. Up to March, 1997 there were 196 regional rural banks covering 436 districts with a network of 14,450 branches. The loans and advances stood at Rs. 7,852.7 crores as at the end of September, 1996.
National Bank for Agriculture and Rural Development (NABARD) founded on 12 July, 1982 took over the functions of the erstwhile Agriculture Credit Department, Rural Planning and Credit Cell of the Reserve Bank of India and Agriculture Refinance and Development Corporations.
Its subscribed and paid-up capital stands at Rs. 500 crore at the end of March, 1996. NABARD was established for providing credit for promotion of agriculture, small- scale industries, cottage and village industries, handicrafts and other economic activities in rural areas. NABARD provides refinance to the state land development banks, state co-operative banks, scheduled commercial banks and regional rural banks. During 1996-97 it sanctioned short-term credit limits of Rs. 789.9 crore (as of September, 1996), comprising an amount of Rs. 552.2 crore for seasonal agricultural operations.
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It has been emphasised that larger proportion of the agricultural credit should go to the tiny and small farmers. Between 1979-80 and 1987-88 the share of small and marginal farmers with up to 1 ha. (2.5 acre) of holdings in the total short-term credit by scheduled commercial banks including the RRBs has gone up from 33.5 percent to 36 per cent. Banks have also been asked to make special efforts to assist the scheduled castes and scheduled tribes with adequate credit so as to enable them to undertake self- employment ventures and improve their standard of living.
Kisan Credit Card-K.C.C. scheme was launched in 1998-99. Under the scheme43.5 million credit cards releasing a loan of 1, 11,459 crore rupees have been issued by different banks up to 30.09,2004. The scheme is giving wide popularity amongst formers.