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Farmers in Bihar have received a significant boost. A provision has been made to provide loans of up to ₹3 lakh to farmers at an interest rate of 3%. To facilitate this, the Bihar government has signed a Memorandum of Understanding (MoU) with NABARD. Under this arrangement, the state government will provide an additional 1% subsidy on agricultural loans. However, this does not apply to all agricultural loans; it covers specific essential agricultural loans that will carry an interest rate of just 3%. A condition applies: the subsidy benefit is available only if the loan is repaid on time.

**How ​​the 3% interest rate is calculated**
Typically, agricultural loans carry an interest rate of 7%. The Central Government provides a 3% subsidy on these loans, bringing the effective interest rate down to 4%. Now, the Bihar government is offering an additional 1% subsidy, resulting in a final interest rate of 3% for the farmers. However, this entire subsidy is contingent upon timely loan repayment; otherwise, the farmer will have to pay interest at the standard rate of 7%.

It has also been specified that the subsidy applies only to loans up to ₹3 lakh; loans exceeding this amount are not eligible. This scheme covers small, marginal, and all other categories of farmers.

**Which loans are eligible for the subsidy?**
Farmers will receive the 1% subsidy on Kisan Credit Card (KCC) loans, crop loans, and short-term agricultural produce loans. Notably, KCC loans provide up to ₹3 lakh to cover expenses related to crop cultivation, fertilizers, seeds, and pesticides.

Additionally, the Bihar government has launched a facility to provide instant digital KCC loans to registered farmers—via the 'Bihar Krishi App' and 'Farmer ID'—without the need for lengthy paperwork.

**Which farmers are eligible for the loan?**
Loans are granted to farmers who are permanent residents of Bihar and are registered farmers. They must possess their own cultivable land. Farmers cultivating land on a rental or sharecropping basis can also apply for loans by forming Joint Liability Groups. If they have not yet registered, they can do so online by visiting the Bihar Agriculture Department's website.

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