Andhra Pradesh Stands Second With Crop Loans Release of Rs 2.69 Lakh Crore by March 31

Vijayawada: Andhra Pradesh won the second place among 35 states and UTs by banks issuing crop loans of Rs 2.69 lakh crore to farmers till March 31 last fiscal.

This meant the AP farmers got substantial financial support from bankers to raise crops last year.

Meanwhile, the recently held state-level bankers committee meeting has targeted a release of crop loans of Rs 3.60 lakh crore for the 2026-27 fiscal.

Farmers take crop loans for purposes ranging from preparation of land to purchase of seeds, fertilisers, pesticides and other efforts until the crop gets harvested and sold. The loans are for short term of 12 months, medium term of 18 months and long term of three to five years.

The bankers charge 7 per cent interest on these crop loans, of which the central government pays 3 per cent interest to the bankers under Interest Subvention Scheme for crop loans up to Rs 3 lakh while the state government pays 4 per cent interest to the bankers.

With this, the farmers need to pay no interest at all for the crop loans availed from the bankers.

Moreover, if the farmers avail Rs 1 lakh as crop loan with a space of one year to repay, the state government extends 4 per cent interest on the loan under interest subvention scheme. For farmers availing loan up to Rs 3 lakh, the state government provides a subsidy of 1 per cent on interest. This is known as “25 paisa interest” on the loans.

State agriculture authorities say that every year, the bankers and the officials from the agriculture, horticulture, fisheries and allied sectors will meet and fix the scale of finance to be extended as a crop loan to the farmers based on certain parameters like size of the holding, type of crop and the duration of raising crop, which will be less than a year except for sugarcane which takes 12 to 14 months for harvest.

In the agriculture department alone, the extent of finance will be decided for 24 crops -- like paddy, groundnut, millets, pulses, redgram etc-- so that the bankers will sanction such amounts as crop loan to the farmers.

As the farmers avail crop loans for the duration of a year or so ideally, the bankers wait for two to three years to consider the unpaid loans as “outstanding”. In cases of non-repayment even after three years, the bankers will declare such loans as non-performing assets (NPAs).

A senior state agriculture officer said, “The higher the loan amount sanctioned to the farmers as crop loans, the better the financial support extended to the farmers to raise crops. In fact, farmers feel more happy getting a good amount in hand to use for raising the crops in the state.”

Infographics:

Bankers sanctioned AP farmers crop loans worth Rs 3.86 lakh crore in 2025-26; out of this, Rs 2.69 lakh crore remains outstanding by end of last fiscal

Interest subvention scheme being offered by both the Centre and AP aim to inculcate financial discipline among the farmers to clear the loans promptly

In case, farmers suffer crop loss and are unable to repay loans beyond considerable time, their loans are declared as outstanding

Both Centre and AP extend annual financial support to farmers under the Annadata Sukhibhava Scheme to the tune of Rs 6,000 and Rs 14,000 respectively.