Karnataka farmers have received a major boost in agricultural credit as the state government continues its interest-free crop loan scheme through cooperative credit institutions. For the 2026–27 financial year, eligible farmers can obtain crop loans of up to ₹5 lakh without interest, subject to the applicable rules and repayment conditions.
The scheme is intended to provide farmers with easier access to working capital during the cultivation season. By reducing the interest burden, the government aims to help cultivators manage expenses such as seeds, fertilizers, labour, irrigation, and other agricultural inputs.
Crop Loan Limit Increased to ₹5 Lakh
The Karnataka government had earlier raised the maximum interest-free crop loan limit from ₹3 lakh to ₹5 lakh during the 2023–24 financial year. However, implementation was affected in some cases by funding-related difficulties, including issues concerning the release of funds through NABARD.
For 2026–27, the Cooperation Department has issued fresh directions concerning the applicable loan limits. Under the current framework, eligible farmers can seek crop loans of up to ₹5 lakh through Agricultural Credit Cooperative Societies and associated cooperative banking institutions.
Farmers should note that approval is subject to eligibility requirements, documentation, lending norms, and the availability of credit through the concerned cooperative institution.
Support for Animal Husbandry and Fisheries
The latest provisions are not limited to crop cultivation. Farmers involved in allied agricultural activities can also receive financial assistance.
An interest-free working-capital loan of up to ₹2 lakh is available for eligible activities connected with animal husbandry and fisheries. This can provide additional support to rural households that depend on dairy, livestock, or fisheries for income.
The government has also revised the limit for certain medium-term loans carrying a 3% interest rate. The maximum limit has been increased from ₹10 lakh to ₹15 lakh, subject to the applicable conditions.
Focus on Wider Access
Cooperative institutions have been encouraged to ensure that the benefits of agricultural credit reach a broader group of farmers. The directions include efforts to extend lending opportunities to new members and to eligible members from Scheduled Caste and Scheduled Tribe communities according to prescribed targets.
This approach is intended to make cooperative agricultural finance more accessible across different sections of the farming community.
Repayment Is Important
Farmers seeking the interest-free benefit should pay close attention to repayment requirements. Crop loans of up to ₹5 lakh generally need to be repaid within the specified one-year period to qualify for the government’s interest assistance, subject to the scheme’s conditions.
Farmers are also advised to confirm that the sanctioned loan amount has actually been credited to their savings account maintained with the concerned District Central Cooperative Bank.
How Farmers Can Apply
Those interested in obtaining the facility should first approach their local Agricultural Credit Cooperative Society or DCC Bank. Officials can provide information about eligibility, required documents, loan limits, repayment schedules, and other applicable conditions.
Before accepting a loan, farmers should carefully verify the sanctioned amount, repayment deadline, interest-assistance conditions, and account details.
The revised credit limits could provide meaningful financial relief to Karnataka’s farming community by making agricultural working capital more affordable. Farmers who meet the eligibility requirements are encouraged to contact their cooperative institution and obtain the latest official information before submitting an application.
