Primary Agriculture Credit Society(PACS), with historical challenges of financial viability and shortage of qualified human resources, manage this transition?
A separate line of credit has been set up under AIF by earmarking concessional refinance of `5,000 crores at 3% during FY21. PACS will get term-loans at 4%, which, with interest subvention under AIF, will come down to just 1%.
Need-based accompanying measures in the form of the grant would also be made available to the cooperative banks for capacity building, project management expenses, and ICT initiatives, all of which will finally impact the PACS.
A primary agricultural credit society is a basic unit and the smallest Cooperative credit institution in India. It works on the grassroots level ( Gram Panchayat and village level ). It is basically an Association of members residing in a particular area. The members can be borrowers and nonborrowers.
The primary agricultural credit societies are the bottom tiers of the three tier Co operative credit structure operating in the country . These are short term Cooperative credit structures functioning at the grassroots level .
Work of PACS: PACS are currently being used only for a single purpose -disbursement of Crop loans. However, they can be used to provide agricultural inputs, implements and to provide warehousing and other facilities to farmers. They can bring about transformation in rural areas.
Objectives of Primary Agriculture Credit Society[PACS] :
- To Cater to the credit need, mostly farm credit and income-generating activities of farmers artisans and other members
- To create awareness among farmers to adopt improved farming practices
Current status of PACS : PACS occupy a predominant position in the Cooperative credit structure and form its base . These societies cover about 90% of 5.8 lakh villages .
PACS should be recognised as nodal points for the development of hinterlands in the country . This initiative will enable PACS is to support farmers in post harvest marketing activities and provide ancillary services to its members like creation of storage and processing facilities custom hiring centres and collective purchase of inputs . This will also help in increasing non fund based income PACS .
Issues and concerns associated with development of PACS are
- The problem of capital inadequacy
- The problem of credit provided
- The problem of loan policy of PACS
- The problem of recovery of loans
- Problem of overdue
- Problem of supervision
- The problem of loans advance other than a Cash crop
- Problem of Management
Conclusion: primary agricultural credit society needs capacity building, project management expenses, and ICT initiatives all of which will finally impact the Primary Agriculture Credit Society.