Primary Agricultural Credit Societies

Feb. 8, 2023

The Union Budget has recently announced Rs 2,516 crore for the computerisation of 63,000 Primary Agricultural Credit Societies (PACS) over the next five years

About Primary Agricultural Credit Societies:

These are village-level cooperative credit societies that serve as the last link in a three-tier cooperative credit structure.
These are headed by the State Cooperative Banks (SCB) at the state level.
Credit from the SCBs is transferred to the district central cooperative banks, or DCCBs, that operate at the district level.
These district central cooperative banks work with PACS, which deals directly with farmers.
Individual farmers are members of the PACS, and office-bearers are elected from within them. A village can have multiple PACS.
PACS are involved in short-term lending — or what is known as crop loans.
At the start of the cropping cycle, farmers avail credit to finance their requirement of seeds, fertilisers etc.
Banks extend this credit at 7 per cent interest, of which 3 per cent is subsidised by the Centre, and 2 per cent by the state government. Effectively, farmers avail the crop loans at 2 per cent interest only.