Chandigarh: In one of the biggest agricultural reforms in recent decades, Punjab Chief Minister Bhagwant Singh Mann has introduced a major overhaul of the Kisan Credit Card (KCC) system, aiming to transform agricultural credit access and reduce farmers’ dependence on moneylenders.
The revised framework replaces a 26-year-old credit structure, making institutional lending more modern, transparent, and farmer-friendly.
26-Year-Old Credit System Replaced with Digital Framework
The revamped KCC system dismantles the outdated structure introduced in 2000, which farmers reportedly found complex and dependent on paperwork, passbooks, and cheque-based processes.
The new system introduces a digital, transparent and streamlined credit mechanism, allowing farmers easier access to loans through modern banking channels.
CM Mann said the reform is aimed at ensuring that farmers receive direct financial support without bureaucratic delays or intermediaries.
Higher Crop-Wise Loan Limits Based on Real Costs
A key highlight of the reform is the significant increase in crop-wise credit limits, aligned with actual cultivation costs.
Major revisions include:
- Wheat: ₹24,380 → ₹30,000 per acre
- Paddy: ₹25,440 → ₹39,000 per acre
- Horticulture crops: up to ₹1.57 lakh per acre (earlier ₹32,000)
- Sugarcane (planted): ₹44,000 → ₹1 lakh per acre
- Ratoon crops: ₹65,000 per acre (introduced for the first time)
Officials said the revised limits will ensure better financial support for farmers and reduce reliance on informal lending sources.
Focus on Crop Diversification and High-Value Farming
The new KCC framework strongly promotes crop diversification beyond the traditional wheat-paddy cycle.
For the first time, financial support has been extended to:
- Agroforestry crops like bamboo and poplar
- Agro-horticulture crops such as jamun and lemongrass
- High-value crops like dragon fruit, chia seeds, and quinoa
This move aims to encourage farmers to shift toward more profitable and sustainable agricultural practices.
Support for Horticulture, Vegetables and Fisheries
The revised policy introduces crop-specific lending for horticulture and vegetable farming:
- Garlic: ₹1,57,372 per acre
- Onion: ₹92,686 per acre
- Hybrid tomato: ₹80,981 per acre
In the fisheries sector, credit limits have also been increased:
- Fisheries: ₹2.5 lakh → ₹3 lakh per hectare
- White shrimp: ₹5.5 lakh per hectare
Officials said these reforms will support emerging agricultural sectors and boost rural incomes.
Inclusion of Stubble Management in Credit System
In a first for India, Punjab has integrated stubble management funding into the KCC framework.
- ₹2,000 per acre from paddy loan limit is earmarked specifically for stubble management
This initiative aims to support environmental protection efforts and reduce stubble burning.
Digital Banking and Direct Benefit Transfer
The new system enables farmers to access funds through:
- ATM withdrawals
- UPI payments
- CBS-enabled digital banking
Additionally, Component-A funds will be transferred directly to farmers’ bank accounts, ensuring transparency and eliminating middlemen.
Farmers opting for digital repayment methods will also receive additional banking incentives.
Six-Year KCC Approval and Easier Credit Access
Under the revised structure:
- Farmers will receive 6-year KCC approval
- Annual review will be conducted by a state technical committee
- Credit component flexibility has been increased up to 100%
This will allow farmers to use credit for seeds, fertilizers, fodder, machinery hiring, drone services, and stubble management.
13 Lakh Farmers to Benefit Across Punjab
The government estimates that more than 13 lakh farmers across the state will benefit from the new KCC reforms.
CM Mann said the initiative will:
- Increase institutional credit access
- Reduce dependence on moneylenders
- Encourage crop diversification
- Strengthen cooperative banking systems
He also reiterated that no bank will be allowed to forcibly seize farmers’ land.
CM Criticises Previous Policies, Highlights Farmer Welfare Focus
Criticising past agricultural policies, the Chief Minister said earlier systems failed to support farmers adequately, forcing them into debt traps.
He stated that the new reforms aim to secure farmers’ financial independence and strengthen Punjab’s rural economy.
The Punjab government has described the reform as the biggest transformation of the Kisan Credit Card system in 26 years, marking a shift toward digital agriculture financing, higher credit access, and diversified farming.
The policy is expected to reshape Punjab’s agricultural economy by improving credit availability and promoting sustainable, high-value farming practices.
