Top Agriculture Business Loans for Farmers in 2025

Agriculture is the backbone of India, with over 54% of the population dependent on it for livelihood. But farming today comes with rising costs—whether it’s seeds, fertilizers, modern machinery, cold storage, or food processing. Managing these expenses often puts pressure on farmers’ savings.

To ease this burden, banks and the government provide agriculture business loans at affordable interest rates. These loans help farmers modernize their practices, expand operations, and ensure financial stability. In this blog, we’ll explore the top agriculture business loans for farmers in India in 2025—covering schemes, interest rates, eligibility, and benefits.

What are Agriculture Business Loans?

An agriculture business loan is a type of financing offered to farmers, agri-entrepreneurs, cooperatives, and small agribusinesses. These loans are designed to:

• Purchase modern machinery and tractors
• Set up food processing and storage facilities
• Improve irrigation and farm infrastructure
• Invest in renewable energy solutions for farms

Agriculture loans can be short-term (for seasonal expenses like seeds and fertilizers) or long-term (for infrastructure, equipment, and expansion projects). With government subsidies and special schemes, they make farming more sustainable and profitable.

Best Agriculture Business Loans

Here are some of the best agricultural loans for farmers, agri-entrepreneurs, and cooperatives:

1. Pradhan Mantri Fasal Bima Yojana (PMFBY):

More like a savior for the crops. This agriculture scheme gives protection to the farmers in case the crop is destroyed due to natural disasters.

• Eligibility: All farmers cultivating notified crops in notified areas are eligible, irrespective of age. Both loanee and non-loanee farmers can apply.
• Premium amount: Farmers pay only a small share—2% of the sum insured for Kharif crops, 1.5% for Rabi crops, and 5% for commercial/horticultural crops. The government pays the remaining premium.
• Required documents: Identity proof, address proof, land registered document, bank passbook, passport-size photo.
• Benefit: Acts as a safety net, ensuring financial stability even when crops fail.

2. SBI Agri & Food Enterprise Loan:

This loan provides support through customised financial products that allow farmers and agri-business owners to purchase equipment and expand their operations, helping them to utilise the modernised equipment and increase productivity.

• Eligibility: Individuals, proprietorships, partnerships, LLPs, companies, and cooperatives engaged in agri or food-related activities.
• Loan amount: Depends on project requirements and viability; SBI finances both small and large-scale enterprises.
• Repayment period: Generally, the repayment period has a maximum of 10 years, based on how much you get.
• Required documents: KYC, business proof, project report, financial statements, and other scheme-specific documents.
• Interest rate: Linked to SBI’s EBLR/MCLR, depending on borrower profile and credit assessment. 
• Benefit: Supports both small farmers and large agribusinesses with long repayment flexibility.

3. Kisan Credit Card (KCC):

The Government of India launched this scheme in 1998 with the aim of providing financial support. It offers loans at lower interest rates for buying seeds, fertilisers, machinery, and can be used for emergency purposes.

• Eligibility: Farmers, self-help groups can be individual or group, are eligible.
• Credit amount: Generally provided from Rs. 10,000 - 3 lakh and may exceed based on the farm size, crop type, and the income of the farmer.
• Required documents: Identity proof, address proof, income statement, passport-sized photos, land ownership papers, and other documents as per the loan sanction.
• Repayment period: It depends on the yield the farmer gets. The repayment period ranges from 1 - 5 years based on the credit amount.
• Benefits: These are the perks:

• • Interest rate of 9% p.a., with government subsidies reducing it to as low as 4% for prompt repayment.

  • Personal accident insurance cover.

  • Flexible repayment options aligned with crop harvest cycles.

  • Hassle-free and collateral-free loans for smaller amounts.

4. Farm Credit - Small Agri Business Loan(HDFC):

HDFC offers it for agri traders, food processing firms, exporters, and agri-related businesses.

• Eligibility: Individuals, proprietors, partnerships, companies, and agri-related businesses engaged in trading, processing, or exporting agricultural produce. Applicants should demonstrate stable financial performance and repayment capacity.
• Required documents: KYC documents, income-related documents, bank statement for at least 6 months, stock and receivables statement, business registration proof, address proof, and photo.
• Benefits: Quick loan approval with lower interest rates while maintaining transparency. 
• Loan Amount & Tenure: The loan amount depends on business turnover, collateral, and project requirements. Tenure is flexible, generally up to 5 years.

Other Agricultural Loan Schemes for Farmers

1. Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) – Direct income support for small farmers.
2. Pradhan Mantri Kisan Maan Dhan Yojana – Pension scheme for farmers above 60 years.
3. Modified Interest Subvention Scheme (MISS) – Lower interest rates for short-term crop loans.
4. Agricultural Infrastructure Fund (AIF) – Financing for storage, processing, and agri-infrastructure.

Factors to be Considered Before Applying for Agriculture Business Loans

Before taking a loan, consider the following factors:

• Purpose of the loan: Decide why you’re applying, whether you’re looking for short-term or long-term needs.
• Repayment capacity: Taking out an agriculture loan is easy, with paper and documents, but checking your repayment capacity can help you manage your finances.
• Collateral requirement: If you’re aiming to get a loan without pledging your security, then look for collateral-free schemes. It reduces the burden and helps you to focus on the business.
• Flexibility payment option: Check whether the loan has a flexibility payment option, which allows you to manage your other expenses.
• Hidden charges: Though many banks provide a transparent service, always look for additional charges, like a processing fee.
• Eligibility: Before you decide to apply, check your eligibility. Make sure to hold the required documents on hand for faster approval.

Conclusion:

Agriculture instant business loans in 2025 are empowering farmers with the financial tools they need to grow, modernize, and secure their future. Whether you’re investing in new machinery, building storage facilities, or simply managing seasonal expenses, these loans provide timely support.

At My Mudra, we make the process even easier—by comparing multiple schemes, negotiating the lowest interest rates, and guiding you through every step of the application. With the right financing partner, farmers can focus on what they do best: feeding the nation and building a stronger future.

Also Read:
- How to Get a Machinery Loan for Your Business?
- How Business Loan for Expansion is Helpful for Entrepreneurs