Public sector banks may fund entire farm value chains, not just individual farmers

The government is considering a shift in how public sector banks lend to the agricultural sector. Rather than funding individual farmers alone, PSBs would finance entire value chains centred on key district products. This cluster-based lending model would connect farmers and farmer producer organisations (FPOs) with processors, storage facilities, and logistics businesses.

The proposal seeks to strengthen agricultural infrastructure and create integrated production systems at the district level. By linking all stakeholders in the supply chain, the approach aims to improve efficiency and reduce post-harvest losses in farming operations.