Primary Cooperative Agriculture and Rural Development Bank: Horticulture Loan (Tamil Nadu)

What is the PCARD bank horticulture loan?

Horticulture Loan is a long-term investment credit product of the Primary Cooperative Agriculture and Rural Development Banks (PCARD banks) of Tamil Nadu, which function under the Cooperation, Food and Consumer Protection Department and are supervised by the Registrar of Cooperative Societies. The loan finances the establishment of a horticultural crop; fruit trees, plantation crops, vegetables under a perennial system: on land the farmer owns.

The Tamil Nadu government scheme directory records the loan band as Rs 25,000 to Rs 2,00,000 per 0.4 hectare, which is per acre, at an interest rate reported between 11 and 12.75 per cent, described as varying with conditions.

The institutional setting explains the product's shape. Tamil Nadu has around 180 Primary Cooperative Agriculture and Rural Development Banks, generally one per taluk, and the department's own description of their function is that they provide long-term credit to farmers for minor irrigation, land development, farm mechanisation, horticulture, animal husbandry and allied activities. The apex of this structure is the Tamil Nadu Cooperative State Agriculture and Rural Development Bank (TNCSARDB), which refinances the primary banks.

Horticulture is a natural fit for a long-term lender because a fruit orchard does not pay back in one season. A mango, guava, sapota or coconut planting takes years to come into bearing, so the credit must carry a moratorium and a repayment schedule spread across a decade or more. A crop loan from a village society cannot do that; a land development bank loan can.

One honest caveat belongs at the top of this page rather than buried in it. Cooperative department material records that, because refinance from the National Bank for Agriculture and Rural Development has not been available, PCARD banks are at present issuing only jewel loans out of the funds available with them. The horticulture line exists in the scheme framework, but a farmer should confirm at the bank whether it is actually open before spending money on estimates, an encumbrance certificate and a departmental recommendation.

Who is eligible for the horticulture loan?

You can borrow if:

• You own agricultural land in your own name, evidenced by patta and chitta or adangal, within the taluk served by the PCARD bank.
• The land is free of prior charge, shown by an encumbrance certificate from the sub-registrar.
• You propose to raise or expand a horticultural crop on that land, with a workable planting plan and, ideally, a technical opinion from the Horticulture Department.
• You are, or become, a member of the bank by subscribing to shares.
• You are not a defaulter to any cooperative institution, the village primary agricultural cooperative credit society, the District Central Cooperative Bank, or another PCARD bank.
• You can service the repayment from the projected income of the orchard and from other farm income during the gestation years.

You cannot borrow if:

• You are a tenant farmer, sharecropper or agricultural labourer with no land in your own name. Land security is the basis of the whole product; there is no unsecured variant.
• The land is already mortgaged or has a subsisting encumbrance.
• You live or the land lies outside the bank's operational area.
• You are an existing defaulter in the cooperative system.
• The proposed crop is unsuited to the land, for example a water-hungry orchard on an unirrigated plot with no source developed — and the technical assessment says so.
• The bank has no refinance funds, in which case the application will simply not move regardless of merit.

How much is sanctioned, and on what terms?

The wide band between Rs 25,000 and Rs 2,00,000 per acre reflects how different horticultural crops are. A vegetable or banana planting has a low establishment cost and a short cycle; a coconut, mango or sapota orchard with pits, planting material, staking, manure and an irrigation source runs far higher. The bank sizes the loan on an approved unit cost for the crop, and this is where the Horticulture Department's technical note earns its place. An officer's estimate of spacing, plants per acre and cost per plant is what turns a vague request into a sanctionable number.

Disbursement in stages is worth expecting. Long-term agricultural lenders normally release the first instalment for land preparation and planting material, and subsequent instalments after inspection confirms the work was done.

What documents are required?

How to apply for the PCARD horticulture loan

1. Call at the Primary Cooperative Agriculture and Rural Development Bank in your taluk and ask whether the horticulture line is currently open. Given the refinance position, this is the first question, not the last.
2. Meet the Horticultural Officer or Assistant Director of Horticulture at the block or district office and get a written note on the crop, the spacing, the number of plants per acre and the estimated cost per acre.
3. Obtain the encumbrance certificate for the land from the sub-registrar, and collect an up-to-date patta, chitta and adangal from the village administrative officer or through an e-Sevai centre.
4. Collect the loan application form at the bank, complete it, and attach the land records, the encumbrance certificate, the estimate, Aadhaar, address proof and photographs.
5. Obtain a no-dues certificate from your village primary agricultural cooperative credit society and any other cooperative institution you have borrowed from.
6. Subscribe to shares and complete membership formalities if you are not already a member.
7. Submit the application and collect a dated acknowledgement with the application number.
8. Complete the mortgage formalities after sanction, the bank will require the land to be mortgaged in its favour, and the deed is executed at the bank or before the sub-registrar.
9. Draw the instalments as the work progresses, and keep bills for planting material and inputs, because the bank inspects before releasing later stages.

How to check the status of your application

1. Quote the application number to the secretary or manager of the PCARD bank.
2. Ask specifically whether the file is pending on title scrutiny, on technical appraisal, or on funds, three different problems with three different fixes.
3. Escalate to the Deputy Registrar or Joint Registrar of Cooperative Societies for the district, who supervises the bank.
4. Escalate to the Tamil Nadu Cooperative State Agriculture and Rural Development Bank, the apex institution, where a district-level delay is not resolved.

Why horticulture loan applications fail

• No refinance funds at the bank. The commonest reason at present, and nothing in the applicant's file will fix it. Ask first.
• Land not in the applicant's name. Joint family land not yet partitioned, or land in a parent's name, stops the mortgage. Regularise the patta first.
• Encumbrance found on the land. An existing mortgage or a subsisting charge must be cleared or the loan restricted to unencumbered land.
• Default in the cooperative system. A pending crop loan overdue at the village society will block a PCARD bank sanction.
• No credible unit estimate. A request for "a horticulture loan" with no crop, spacing or cost per acre is not assessable.
• Crop unsuited to the land or the water source. Get the technical opinion before, not after, applying.
• Margin not brought in. Sanctions lapse where the farmer's own contribution does not materialise.

Where to complain

• Secretary or manager of the PCARD bank, in writing.
• Deputy Registrar or Joint Registrar of Cooperative Societies for the district.
• Tamil Nadu Cooperative State Agriculture and Rural Development Bank, the apex of the long-term cooperative credit structure.
• Registrar of Cooperative Societies, Tamil Nadu: rcs.tn.gov.in
• Assistant Director of Horticulture at the district, for the technical and subsidy side of the same planting.

Application forms are issued free at the bank. No agent or middleman can obtain a sanction, and no fee should be paid to anyone outside the bank's own receipts.