Getting a crop loan from a bank and after repaying the entire amount getting back the land or house papers submitted as collateral security for availing the loan are not easy tasks.

“Farmers know well how hard it is to get a bank loan today. In several cases they are often in the dark about their eligibility for applying or interest calculated on their loan amount disbursed.

“As an answer for this our specialist team has developed a new farm loan calculator called,” says Dr. P.V. Habeeburrahman, Professor and Head, KVK (Krishi Vigyan Kendra) Malappuram.

Scale of finance

The new online calculator, based on scale of finance concept, can help farmers know their loan eligibility and help banks to easily estimate crop loan limit.

Agricultural credit falls under two major categories, one, crop loan and the other, investment loan.

Crop loan is to meet the expenses for cultivation, maintenance and repair of pumps, agriculture machineries etc and investment loan is sanctioned for developing a new enterprise like fertilizer or seed shop that may not give immediate return.

Usually during the sowing season, farmers approach their local bank for crop loan disbursement. The bank officials after necessary verification work out the amount for disbursal using scale of finance as base. Scale of finance in simple terms is the expenditure incurred for growing the particular crop. The cost of labour, chemicals, irrigation, marketing etc. falls under this category.

There is a district level technical committee in every district which decides the loan amount to be disbursed. The committee meets every year and decides the loan limit for the different crops grown in that area.

Not fixed

“The scale of finance is not fixed. It is variable and differs in different districts even for the same crop grown and keeps changing annually. To cite an example, paddy cultivation per hectare in Kasargod is Rs 63,000 while in the nearby Kozhikode district is Rs 35,000.

“Similarly, all crops included in a district may not find a place in another district. Betel vine is a commercial crop in Malappuram, while it is not in Thiruvananthapuram,” explains Dr. Habeeb. All the required information has been collected from 14 districts from NABARD for the year 2013-14, the data validated and fed into the calculator.


As soon as a farmer selects a district, the list of crops cultivated in that district will pop on the screen.

And once the cultivated crop is selected, the scale of finance for that crop is displayed. This is followed by a request for entering the farmer’s particulars and choice of crop he wishes to cultivate.

Once this is done the minimum and maximum eligible finance will be shown on the screen at the click of the mouse.

Since a number of intercrops are being cultivated in Kerala, the calculator has been designed to accommodate a maximum of five crops to arrive at the eligible loan amount.

In some cases a farmer may not be interested in availing the whole loan amount immediately.


He would prefer to utilise a portion first and after some months take the remaining loan, and in such a case the online programme calculates only the interest rate for the loan amount he wishes to utilise. Once he takes the entire loan then principal is also calculated.

Similarly the interest charged for the loans may also differ among banks. The software effectively takes care of all these problems and gives the interest and principal part to be repaid at the end of the crop season. Thus, by using the tool, farmers can have an estimation of the eligible loan amount without going to the bank.

For more details interested farmers can contact Dr. P.V. Habeeburrahman, Professor and Head, KVK Malappuram, email:, mobile: 9446058252.

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