For years, Indian farmers have struggled with inadequate credit access, inefficient procurement systems, and bureaucratic delays in government support. The Kisan Credit Card (KCC), introduced in 1998 under Union Agriculture Minister Sompal Shastri, was a pioneering initiative, however, in today’s fast-evolving financial ecosystem, the KCC must evolve into a multi-purpose tool integrating procurement, production planning, and financial empowerment.
Under the leadership of Prime Minister Narendra Modi and Home Minister Amit Shah, India is undergoing a transformation in rural finance through cooperative reforms, digitalisation, and advanced technology like blockchain. KCC is no longer just a borrowing mechanism—it is being envisioned as a financial identity for farmers, ensuring transparent MSP payments, streamlined subsidy disbursals, and efficient procurement planning.
Integrating blockchain technology into the KCC system will enable every transaction—from seed purchase to final sale—to be recorded in a tamper-proof ledger. This will provide real-time production data to agencies like the Food Corporation of India (FCI), allowing them to make advance procurement decisions. As a result, market prices will stabilise, middlemen exploitation will reduce, and farmers will receive fair prices.
Blockchain-enabled traceability will also enhance food safety, boost export potential, and help policymakers tailor interventions based on regional crop patterns. With better data analytics, the government can plan input subsidies, allocate irrigation resources, and predict future demand more efficiently.
Transforming KCC into an Aadhaar-linked, chip-enabled smart card can turn it into a real-time financial education tool. Farmers will receive SMS alerts, mobile app notifications, and updates through local extension centers about loan eligibility, repayment schedules, interest subsidies, and market trends. Enhancing financial literacy will improve credit discipline and open avenues for new financial products such as savings accounts, pension schemes, and insurance policies. A financially aware farmer is better positioned to handle market risks, invest in technology, and reduce dependence on informal credit sources.
Beyond agricultural finance, KCC can serve as a credit card for farmers’ daily consumer needs. Currently, small and marginal farmers lack access to formal credit for personal consumption, forcing them to rely on high-interest informal loans. Expanding KCC’s scope within the financial ecosystem will enable farmers to use it for essential purchases, education, healthcare, and household expenses.
A chip-enabled KCC with UPI integration will allow digital payments at local stores, ATM withdrawals, and online shopping for agricultural inputs. This will bridge rural-urban financial gaps and give farmers the same financial privileges as urban consumers. Moreover, building credit history through KCC transactions will facilitate higher-value loans for farm expansion, mechanization, and allied activities like dairy and fisheries.
A key grievance of farmers regarding MSP is delayed payments, lack of transparency, and middlemen interference. A blockchain-enabled KCC system will directly link MSP procurement with farmers’ bank accounts, ensuring instant payments without deductions.
Real-time tracking of procurement will enable farmers to monitor transactions, understand the accepted quantity, and know the payment status, bringing accountability to the system. Additionally, integrating mandi prices with the KCC portal will help farmers make informed selling decisions, choosing between MSP procurement, private buyers, or direct-to-consumer markets based on prevailing rates.
Expanding the role of multi-purpose cooperative societies will transform PACS from mere lending institutions into procurement hubs, storage centers, and rural banking service providers.
This will reduce reliance on commercial banks and empower farmers through local financial institutions. Furthermore, the increase in collateral-free loan limits to `5 Lakh and interest subvention schemes reducing rates to 4 per cent per annum will make credit more accessible and affordable for small farmers and tenant cultivators.
KCC is poised to become the financial backbone of Indian agriculture—integrating banking, credit, procurement, and production planning into a single, seamless platform.A chip-enabled, Aadhaar-linked KCC will provide financial security, transparent MSP payments, seamless subsidy transfers, and direct market access. The integration of blockchain, direct benefit transfers (DBT), and smart financial tools will ensure that no farmer is left behind.
The next revolution in Indian agriculture will be driven by technology-powered financial empowerment. India must accelerate this transformation to ensure that all 140 million farmers benefit from this financial revolution. The future of Indian agriculture depends on it—and the time to act is now.
(The writer is a Secretary General CNRI and Member, High Power Committee on MSP and Agriculture Reforms, Government of India)
