UPSC Prelims 2020 Question:

Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes?

1. Working capital for maintenance of farm assets
2. Purchase of combine harvesters, tractors and mini trucks.
3. Consumption requirements of farm households
4. Post-harvest expense
5. Construction of family house and setting up of village cold storage facility.
   
   

Select the correct answer using the code given below:

Explanation:

• The Kisan Credit Card (KCC) scheme was introduced in 1998 for issue of Kisan Credit Cards to farmers so that farmers may use them to readily purchase agriculture inputs such as seeds, fertilisers, pesticides etc. and draw cash for their production needs. It is implemented on the basis of their holdings for uniform adoption by the banks.
• Credit components covered under KCC include:

• • Short term requirements for cultivation of crops. So, point 1 is correct. 

• Post-harvest expenses. So, point 4 is correct. 

• Consumption requirement of farmer household. So, point 3 is correct. 

• Investment credit requirement for agriculture and allied activities like farm machinery, etc. which is repayable within one year. 

• Combine harvesters, tractors, mini trucks, construction of family house and setting up of village cold storage facility are part of the fixed capital and not of working capital. Their usage is beyond one year and are not considered as consumption requirement. So, points 2 and 5 are not correct.
  
  

Therefore, option (2) is the correct answer.

Relevance: The Union Government announced in the Budget 2018-19 their decision to extend the Kisan Credit Card (KCC) facilities to animal husbandry farmers and fisheries to help them meet their working capital requirements.

Subject: Economics | Agriculture and Food Management