Interest Subsidy for Farmer Loans (Cooperation Department, Chhattisgarh)

What is the Chhattisgarh Interest Subsidy for Farmer Loans?

Interest Subsidy for Farmer Loans is a scheme of the Department of Cooperation, Government of Chhattisgarh, administered by the Commissioner Cooperation and Registrar of Cooperative Societies. Under it, farmers are provided interest-free short-term loans at 0 per cent interest through cooperative societies and cooperative banks for a defined set of farm and allied activities.

The mechanism is simple. A farmer borrows a seasonal crop loan from a Primary Agricultural Credit Cooperative Society (PACS) or the cooperative bank behind it. The society charges interest as it must, and the state government pays that interest on the farmer's behalf for the covered limit. The farmer therefore repays only the principal.

The scheme sits inside a much larger cooperative credit programme in Chhattisgarh that also includes the Agricultural Credit Stabilisation Fund, the Short-Term Agricultural Loan Waiver Scheme covering loans taken from PACS up to 30 November 2018, and the ongoing digitisation of PACS at Rs 3.91 lakh per society. Knowing that context helps, because the same society office handles all of them.

How much interest-free credit does the scheme give?

According to the Chhattisgarh Department of Cooperation's official scheme list, the limits and rates are:

Three points that borrowers regularly get wrong:

The zero per cent applies to short-term credit, not to every loan. A short-term agricultural loan is a seasonal crop loan repayable within the crop cycle. A term loan for a tractor, a well or a pump set is a different product and is not covered by this rate.

Cattle rearing is deliberately not free. It is the only category on the list with a positive rate, and it is slabbed to 1 per cent on the first Rs 2 lakh, then 3 per cent on the amount between Rs 2 lakh and Rs 3 lakh.

The benefit is tied to repayment discipline. Concessional short-term credit is built on repayment within the loan period. An overdue account does not simply attract interest; it also blocks the next season's interest-free limit.

Who is eligible for the interest subsidy?

You can apply if:

• You are a farmer, fish farmer, horticulture grower, lac producer or cattle rearer in Chhattisgarh.
• You are an enrolled member of a Primary Agricultural Credit Cooperative Society or an equivalent cooperative society, since the credit runs through the cooperative structure.
• You have cultivable land records or the equivalent activity record against which a short-term limit can be fixed.
• Your earlier cooperative loan is not overdue.
• You are borrowing for a short-term seasonal purpose in one of the five covered activities.

You cannot apply, or are not eligible, if:

• You are not a member of any cooperative society, and have not enrolled in one. Membership is the gateway, not an optional extra.
• You are borrowing from a commercial or private bank outside the cooperative structure, that loan may qualify for central interest subvention, but not for this state subsidy.
• Your existing cooperative loan is in default, until it is regularised.
• You are seeking a term loan or investment credit rather than short-term seasonal credit.
• Your requirement is above the applicable ceiling. The portion above Rs 5 lakh for agriculture, or above Rs 3 lakh for fisheries and horticulture, carries normal interest.
• You are not resident in Chhattisgarh or the activity is outside the state.

There is no age bar, income ceiling or caste restriction on the interest subsidy itself. Separately, the Cooperation Department gives Rs 500 per member as a share purchase grant, credited directly to the share capital account, for small and marginal SC and ST farmers joining a PACS or Tribal Service Society, subject to a maximum of Rs 50,000 per society per financial year. That grant exists precisely to help weaker-section farmers cross the membership threshold.

What documents are required?

How to apply for the interest-free cooperative loan

1. Join your village PACS if you are not already a member. Ask the society secretary for the membership form and pay the share amount. SC and ST small and marginal farmers should ask about the Rs 500 per member share purchase grant.
2. Visit the PACS or the District Central Cooperative Bank branch before the sowing season for kharif or rabi, since short-term crop loans are disbursed against the cropping calendar.
3. Submit the loan application with your land records — khasra, khatauni, B-1 and P-II, along with Aadhaar and your bank passbook, and state the activity: agriculture, fisheries, horticulture, lac or cattle rearing.
4. Let the society fix your credit limit against the scale of finance for your crop and the size of your holding, within the applicable ceiling.
5. Sign the loan documents and Kisan Credit Card papers and collect a copy of the sanction showing the limit and the repayment date.
6. Draw the loan in cash, in kind (fertiliser and seed from the society) or both, as the society's practice allows.
7. Repay the principal within the loan period to keep the interest benefit and to remain eligible for the next season's interest-free limit.

There is no separate application form for the interest subsidy. The subsidy is applied automatically to a qualifying loan by the society, so the only thing a farmer applies for is the loan itself.

How to check your loan and subsidy status

• At your PACS, where the member ledger records the sanctioned limit, drawings, repayments and the interest position on your account.
• At the District Central Cooperative Bank branch, which holds the society's refinance account and can confirm the applicable rate on your product.
• Through your Kisan Credit Card statement or passbook, which shows whether interest has been debited to you or borne by the state.
• On the eRCS Chhattisgarh portal at states.ercs.nic.in/chhattisgarh, which carries the Registrar of Cooperative Societies' records for societies in the state.
• At the district Deputy Registrar of Cooperative Societies office, for disputes the society cannot resolve.

Why farmers lose the interest benefit, and how to avoid it

• Overdue earlier loan. The commonest cause. Regularise the old account first; a fresh interest-free limit is not sanctioned over a default.
• Not a society member, or lapsed membership. Renew or enrol before applying.
• Wrong product taken. A term loan for equipment or a well does not attract the zero per cent rate. Confirm with the secretary that what you are signing is a short-term crop loan.
• Borrowing above the ceiling. The amount above Rs 5 lakh for agriculture, or above the sub-limit for allied activities, carries ordinary interest.
• Land record mismatch, especially where the khasra entry is in a father's or brother's name. Get the revenue record mutated before the season.
• Crop loss in a calamity year. Do not simply stop paying. Ask the society about conversion of the short-term loan into a medium-term loan, which the state supports through the Agricultural Credit Stabilisation Fund, into which the government contributes a 2.50 per cent share as a loan to the State Cooperative Bank.

What else the Cooperation Department does for cooperative credit

Understanding the surrounding schemes helps a member use the society fully:

• One-time grant of Rs 50,000 per society to the 725 newly formed PACS restructured in 2020, for operational and office setup costs.
• Digitisation of PACS, a centrally sponsored project running from 2022-23 to 2026-27 at Rs 3.91 lakh per society, shared 60 per cent Centre and 40 per cent State, with software and training funded by the Government of India and NABARD.
• Upgradation of PACS to multi-purpose cooperative societies, with a grant of Rs 10 lakh against a project of up to Rs 25 lakh, provided once per eligible society.
• Warehouse construction with NABARD support to 200 MT warehouse-cum-office buildings for 100 warehouse-deficient societies at a total cost of Rs 21.11 crore, with a 10:90 society-to-state share in Sarguja and Bastar and 20:80 elsewhere.
• Share capital investment by the state in cooperative banks, DCCBs, PACS, sugar factories and marketing societies, to raise their borrowing capacity.

Key facts to remember

• Agriculture: up to Rs 5,00,000 at 0 per cent interest.
• Fisheries and horticulture: up to Rs 3,00,000 at 0 per cent.
• Lac producers: up to Rs 2,00,000 at 0 per cent, through societies.
• Cattle rearing: 1 per cent up to Rs 2,00,000, then 3 per cent to Rs 3,00,000.
• Route: PACS, DCCB or the Chhattisgarh Rajya Sahakari Bank.
• Condition: cooperative membership plus repayment within the loan period.

Where to complain

• Society secretary and the PACS managing committee, as the first step for a limit or ledger dispute.
• District Deputy Registrar of Cooperative Societies, listed division-wise on coop.cg.gov.in, for a complaint against a society.
• Commissioner Cooperation and Registrar of Cooperative Societies, headquarters Raipur, 0771-2511920. The Additional Commissioner's office is on 0771-2511923.
• Chhattisgarh State Cooperative Tribunal, which the department funds for judicial resolution of cooperative disputes.
• CM Helpline 1076 for a general Chhattisgarh government grievance.

No fee is payable to any individual for sanctioning an interest-free crop loan. The only money a member owes the society is the share amount for membership and the principal of the loan itself.