FINANCING FOR ORGANIC FARMING

Purpose :
  • To help farmer for conversion from conventional farming to organic farming under organic certification by approved certifying agencies.

  • Investment credit to develop a farm design and management under Organic Farming for an initial period of two years.

  • Assessed financial limit will be utilized for production and incorporating the organic inputs like bio-fertilizers, bio-pesticides, vermicompost, FYM, fruit & vegetable waste and compost etc.

  • To cover certification and training expenses of Organic Farming.

(In addition, usual crop production short term loan i.e. KCC will be given.)

Who are eligible?
  • All farmers who own individually or collectively a minimum of 4 acres of irrigated land or 10 acres of dry (rain fed) land (or equivalent) are eligible.

  • JLGs engaged in crop production activity.

  • Farmers applying for Organic Farming registration with Certified Agencies may also be considered, however, disbursements will be subject to completion of the registration formalities.

  • The product is currently launched on pilot basis in Bangalore, Chennai, Delhi, Hyderabad and Mumbai Circles in select branches.

Quantum of Loan: ( unit cost)
Total cost for 3 years:

Cost of infrastructure required to produce Organic Inputs on own farm (Rainfed Crops 10 acres / Irrigated crops  4 acres / Commercial Irrigated Crops  2 acres.)*

Requirement

Domestic purpose

Export purpose RS.

Term loan for production of organic input

40,000/-

40,000/-

For Certification

60,000/-

1,05,000/-

Total Cost

1,00,000/-

1,45,000/-

Margin:

Minimum 20% - either contributed by the borrower or by subsidy.

Bank Loan - 80%

80,000/-

1,16,000/-

* Circles will not deviate from the above fixed unit costs.
Repayment:

Repayable in 9 years including a gestation period of 3 years in half yearly / yearly installments.

Security:
For Individual Farmers:

Primary

Collateral

Hypothecation of assets created & crops to be raised

Mortgage of land OR any other readily realizable liquid/ immovable security of adequate value.

Group Farmers (JLGs)

Unit Size

Primary

Collateral

ATL & ACC Max. Rs. 50,000/- per member.Max. 10 members / group.

ATL & Hypothecation of assets created and crops to be raised

-Nil-(Mutual Guarantees offered by the JLG members to be obtained)