Tractor Subsidy In Karnataka
Subsidies and Loans for Tractors in Karnataka:
Farm Mechanization- SBM Agri Farm Scheme
The Mechanization of farming has been considered as one of the important inputs in farming, to complete the farm operations on time and to increase production and reduce the drudgery of human labor. With the rapid advancement in agriculture, there has been an increased use of farm mechanization equipment like Tractors and Power Tillers which help us tide over the labour problem for Agriculture We have been assisting the farmers for purchase of Reputed and well-established Models of Tractors / Power tillers.
Norms for the financing of Tractors
The borrower should possess a minimum of 4 acres of wetland or 6 acres of dry land to ensure the viability of the medium-term loan to be extended for the purpose. And finance assistance for tractors to farmers with lesser land holdings than stipulated can also be considered on a case to case basis provided the applicant is having sufficient income from other sources to service the debt.
Down payment for the scheme of farm mechanization scheme on new tractors will be not less than 10% of the investment cost in case of tractors and implements
the Interest rate is the same as the Agricultural Term loans from time to time.
Maximum 9 years.
Karnataka Government Subsidies for Tractors:
Karnataka Govt introduced schemes to give tractors on rent through manufacturer tie-ups. Karnataka government will soon offer tractor and other farm equipment on a rental basis to farmers across the state through a collaboration with automobile makers, including VST Tillers, John Deere, and Mahindra, reports Business Standard. Under the “Uber for agricultural services” scheme, the state is planning to invest around Rs 175 crore as subsidy for renting out farming equipment’s, bringing down the cost of the use of this equipment to farmers by nearly a third, added the report.
According to the government, many farmers own very small patches of land that are too small to justify the investment on mechanized equipment. Therefore, under the new model, the state would pay 75% of capital costs, while equipment makers earn money by renting it to farmers over a three-year period. Farmers will be able to procure tractors, tillers, harvesters, etc. on an hourly and daily basis, once the scheme is launched.
Custom Hire Centers:
The Karnataka state also claims to have tied up with two non-profit entities by investing Rs 87.5 crore to set up about 175 Custom Hire Service Centers (CHSCs). It plans to set up a total of 350 centers in total once the scheme is rolled out fully. The manufacturers will also stock farming equipment from other manufacturers, apart from its own equipment.
Farm Mechanization Scheme – By Government of Karnataka:
Farm Mechanization Scheme is a part of Rashtriya Krishi Vikas Yojana (RKVY) and is implemented in Mission mode. Under this scheme, 50 percent of the cost is provided as a subsidy for buying farm implements whose cost is less than Rs. 5.00 lakhs and 40 percent subsidy if the cost is more. However, a 90 percent subsidy is provided to the Scheduled Caste/ Scheduled Tribe farmers.
The state government has decided not to provide subsidy for purchasing agriculture equipment which costs more than Rs 2 lakh. Though the move stops poor farmers from purchasing costly equipments like tractors and cutting machines, they can hire the equipment from agriculture cooperative societies. Under Agriculture Equipment Subsidy Programme, there will be a cap on the subsidy for equipment priced more than Rs 2 lakh. Till recently, the government used to provide subsidy upto Rs 4 lakh for purchasing selected equipment priced up to Rs 10 lakh. There was subsidy up to 50 per cent for general farmers and up to 90 per cent for SC,ST farmers. Henceforth, the maximum subsidy will be limited to Rs 1 lakh. Under the new programme, registered farmer cooperative societies will be provided subsidy to purchase costly equipments. Such equipment can be hired by the member farmers of the society. The Karnataka Legislature Scheduled Castes and Scheduled Tribes Welfare Committee, headed by P.M. Narendra Swamy, has recommended that the government provide 50 per cent subsidy on tractors being purchased by farmers belonging to SC and ST communities for farming purpose.
Farm Mechanisation- SBM Agri Farm SchemeMechanisation of farming has been considered as one of the important inputs in farming, to complete the farm operations on time and to increase production and reduce the drudgery of human labour. With the rapid advancement in agriculture, there has been an increased use of farm mechanization equipment's like Tractors and Power Tillers which help us tiding over the labour problem for Agriculture We have been assisting the farmers for purchase of Reputed and well established Models of Tractors / Power tillers .
Norms for financing of Tractors
AcreageThe borrower should possess a minimum of 4 acres of wet land or 6 acres of dry land to ensure viability of the medium term loan to be extended for the purpose. Tractor finance to farmers who are having lesser land holdings than stipulated can also be considered on a case to case basis provided the applicant is having sufficient income from other sources to service the debt.
Economic use of TractorThe tractor should have a minimum of 1000 hrs production work in agri. per year either on own farm or on custom hire or both Minimum 3 implements should be owned by the beneficiary (either with bank finance or purchased with own funds) The Tractor financed should have the necessary commercial test report as per BIS code issued by CFMTTI (Central Farm Machinery Training and Testing Institute), Budni, Madhya Pradesh
Margin MoneyDown payment in respect of farm mechanization loan for new tractors will be not less than 10% of the investment cost in case of tractors and implements
Rate of interestAs applicable to Agricultural Term loans from time to time.
Repayment PeriodMaximum 9 years
Registration of the tractorThe tractor should be registered with the concerned Regional Transport Authority
InsuranceComprehensive Insurance cover should be obtained in respect of the assets acquired. Premium for first year will be paid by the concerned Company dealers
Selection of TractorsBank may consider financing of tractors on the basis of viability of individual proposals but the choice and selection of such tractors may be left to the choice of individual beneficiaries
SecurityAs per Bank’s norms (a) Hypothecation of Tractors (b) Equitable Mortgage of landsBack to Agri. index
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