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Kisan Credit Card (KCC) to Animal Husbandry Farmers and Fisheries

In an endeavor to target the farmers, the Union Government in its 2018-19 budget had announced its decision to extend the facilities of Kisan Credit Card (KCC) to Animal Husbandry farmers and fisheries (AH & F). It will help them in meeting their working capital requirements.  Now finally it has got approval in consultation with stakeholders to extend this facility to the farmers to meet their working capital requirement.

So now let’s have a look at this facility which is notified through 4^th February 2019 notification of Reserve Bank of India (RBI).

Before moving ahead, let’s try to know what Kisan Credit Card is?

What is Kisan Credit Card?

The Kisan Credit Card was introduced by the NDA Government in 1998. Further, the main purpose of this card is to fulfill timely and short term credit needs of the farmers in India. Also, this is mainly during the planting and harvesting season.

However, the motive behind launching this card was to reduce the dependency of the farmers on the informal banking sectors. The Kisan Credit Card intends to remove complications by offering cost-effective credit to farmers for agricultural purposes.

What is the purpose of the Kisan Credit Card (KCC) Scheme for animal husbandry and fisheries farmers?

The KCC scheme aims at providing adequate and timely credit support to the farmers from the banking system under a single window with a flexible and simplified procedure for short term crop loans.

However, this Scheme will serve the purpose of meeting short term credit requirements of farmers to take care of:

• Animals
• Birds
• Fish
• Shrimp
• Capture of fish
• Other Aquatic Organisms

What are the eligibility criteria for eligible beneficiaries under the Kisan Credit Card Scheme?

To avail the benefits under the Kisan Credit Card Scheme, the following eligibility criteria needs to be taken care of:

• Fishery

Inland Fisheries and Aquaculture:

• Fisheries, Fish Farmers. Self-help groups, joint liability group and women groups
• The beneficiary will have to own or lease any of the fisheries-related activities. For example pond, tank, open water bodies, raceway, rearing unit, and hatchery. They must possess a necessary license for fish farming and fishing-related activities, any state-specific fisheries and allied activities.

Marine Fisheries:

Beneficiaries who own or lease registered fishing vessels or boats must possess a necessary fishing license or permission for fishing in sea, fish farming activities in the open sea and any other such related activities.

• Poultry and Small ruminant

It includes farmers, poultry farmers which can be either individual or joint borrower, joint liability groups. They can further include tenant farmers of sheep/ goats/pigs/poultry/birds/rabbits and having owned/rented/leased sheds.

• Dairy

Farmers and Dairy farmers either individual or joint borrower, Joint Liability Groups or Self Help Groups. It further includes tenant farmers having owned /rented/leased sheds.

Read our article:Pradhan Mantri Kisan Samman Nidhi Scheme

How finance will be available to farmers under this scheme?

The working capital requirements or finance would be measured on the following basis:

• Under the KCC scheme for animal husbandry farmers and fisheries, the amount of finance will be fixed by the District Level Technical Committee. However, that amount will be based on the local cost worked out on the basis of per acre /per unit /per animal/per bird, etc.
• The working capital would be available for recurring costs towards seed, feed, organic and inorganic fertilizers, harvest and marketing charges, fuel, electricity charges, etc.
• For capture fisheries, working capital may include the cost of fuel, ice, laboring charges; mooring/landing charges, etc. may form part of the scale of finance.
• Moreover, in animal husbandry, the working capital amount can be available for feeding, veterinary aid, labor, water, and electricity supply
• The maximum period for assessment of working capital requirements may be based on the cash flow statement or completion of one production cycle.
• Fisheries and Animal Husbandry experts of the Govt. may be made members of the DLTC for giving technical inputs for assessing the cash credit requirement.
• Progressive entrepreneurs of the livestock/fisheries sector may also be included in the DLTC. It will be providing field-level inputs while assessing the working capital requirements.

What are the general guidelines of the KCC Scheme?

The general guidelines are as under:

• Drawing power: The drawing power will be on the basis of the latest valuation of stocks, receivables and/or cash flows as per terms of sanction.
• Repayment: The loan will be in the nature of a revolving cash credit limit. Repayment will be as per the cash flow/income generation pattern of the activity undertaken by the borrower.
• Monitoring of end-use: The account/smart card for the loan issued under the scheme is to be maintained/issued separately from the existing KCC loan to monitor the utilization limit. The monitoring of the end-use of funds will be in line with other loans (including KCC on crop loans). Further, this can be field visits to the site of the unit/project to be carried out by the branch officials to check progress. Banks will periodically review the facility and continue/withdraw/scale down the facility based on the performance of the borrower.
• Prudential norms: The extant prudential norms on income recognition, asset classification and provisioning on allied activities will likewise apply.
• Rate of Interest: The rate of interest will be as stipulated in DBR’s Master Direction – Reserve Bank of India^[1] (Interest Rate on Advances) Directions 2016.
• All other guidelines laid down in Kisan Credit Card Scheme for short term crop loans will be applicable mutatis mutandis.

Press Release for Kisan Credit Card (KCC) Scheme: Working Capital for Animal Husbandry and Fisheries

You can read the complete circular issued by the Reserve Bank of India from here “Kisan Credit Card (KCC) to Animal Husbandry Farmers and Fisheries^[2]”

Conclusion

While the scheme launched seems impressive as the Government of India has decided to extend the facilities of Kisan Credit Card (KCC) to Animal Husbandry farmers and Fisheries. Moreover, the Reserve Bank of India is also of the opinion that it will ultimately help them meet their working capital requirements.

Read our article:Budget 2019: Key Highlights of Interim Budget at a Glance