The Union Govt. is set to provide Kisan Credit Card (KCC) to 1.5 crore dairy farmers belonging to Milk Unions and Milk producing Companies within the next two months under a special drive.

We can expect multiple statements based prelim question here. Note the following features of the KCC from the newscard:

1. Year of its introduction (in rarest case)

2. Types of banks issuing KCC

3. Credit types extended under KCC

4. Sectors covered under KCC

What is Kisan Credit Card (KCC)?

• KCC is a credit scheme introduced in August 1998 by banks to extend credit facilities to farmers.
• This model scheme was prepared by the NABARD on the recommendations of R.V. GUPTA committee to provide term loans for agricultural needs
• Participating institutions include all commercial banks, Regional Rural Banks, and state co-operative banks. The scheme has short term credit limits for crops and term loans.
• KCC offering credit to the farmers is of two types: 1. Cash Credit 2. Term Credit (for allied activities such as pump sets, land development, plantation, drip irrigations).

Facilities under KCC

• Credit card and passbook or credit card cum passbook provided to eligible farmers facilitate revolving cash credit facility.
• Any number of withdrawals and repayments within a limit, which is fixed on the basis of operational land holding, cropping pattern and scale of finance can be made.
• Each withdrawal has to be repaid within a maximum period of 12 months and the Card is valid for 3 to 5 years subject to annual review.
• Conversion/reschedulement of loans is permissible in case of damage to crops due to natural calamities.
• Crop loans disbursed under KCC Scheme for notified crops are covered under Rashtriya Krishi Bima Yojana, to protect farmers against loss of crop yield caused by natural calamities, pest attacks etc.

What’s’ in the bucket for Dairy Farmers?

• Under the dairy cooperative movement, approximately 1.7 crore farmers are associated with 230 Milk Unions in the country.
• In the first phase of this campaign, the target is to cover all farmers who are members of dairy cooperative societies and associated with different Milk Unions and who do not have KCC.
• Although the general limit for KCC credit without collateral is Rs. 1.6 lakh, but for dairy farmers, it can be upto Rs.3 lakh.
• This will ensure more credit availability for dairy farmers associated with Milk Unions as well as assuring repayment of loans to banks.

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