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1. INTRODUCTION:
The agricultural policy of the Government of India envisages doubling of the farm output during the next decade. Presently, the Bank provides finance to the farmers in the form of term loans for development purpose and short-term loans for production purposes. There is also a need to finance farmers for purchasing land to expand activities and make existing small and marginal units economically viable. This would enable farmers to diversify their present activities and take up allied activities.
Agriculture which is the lifeline of our country, is predominantly a land based activity and absence of resource support particularly for purchase of land especially by Small and Marginal farmers had been a cause for concern and come in the way of their economic development. Our Hon’ble Union Finance Minister announced a package on 18 June 2004 to double agricultural credit within three years with 30% growth each year. The agricultural policy of the Government of India also envisages substantial credit flow to increase agricultural production and productivity. Banks provide agricultural term loans to farmers for investment purposes and short-term loans for production purposes. There is a need to finance farmers for purchasing land not only to expand their activities but also to make existing small and marginal units economically viable, diversify their present activities and to bring fallow lands and waste lands under cultivation.
2. OBJECTIVES:
To make the small and marginal holdings economically viable
To bring fallow lands and waste lands under cultivation
To step up agricultural production and productivity
To finance the share croppers/tenant farmers to purchase land to enable them to increase their income
3. ELIGIBILITY:
Small and marginal farmers i.e. those who would own maximum of 5 acres of non-irrigated land or 2.5 acres of irrigated land including purchase of land under the scheme. Sharecroppers and tenant farmers can also be covered under the scheme.
COVERAGE OF WOMEN
Ownership rights of land to women would lead to their empowerment. Hence, branches may encourage purchase of land by women, giving preference to those in distress, widows, SHG members etc within overall eligibility criteria as laid down under the scheme.
4. PURPOSE:
The objective of the scheme is to finance farmers to purchase, develop and cultivate agricultural as well as fallow and waste lands. Banks may also consider financing purchase of land to enable the farmers to diversify into other allied activities. The bank while considering finance for purchase of land should obtain complete details of the project proposal of the farmer.
Farmer to be advised/encouraged to purchase land at one place and fragmented holdings may be discouraged with a view on saving on production expenses. However, farmers be financed purchase of land within village boundary or in a radius of 3 to 5 Kms – to the satisfaction of the Bank as regards viability
5. MARGIN:
Upto the limit of Rs.50,000/- -NIL
Above Rs. 50,000/- - Minimum Margin of 10 %
6. SECURITY:
The land purchase out of bank finance and mortgaged in favour of the Bank will form the security for the loan from borrowers.
7. INTEREST RATE:
As per the RBI directives on the interest rates issued from time to time.
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