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Primary Agriculture Credit Society

Primary Agriculture Credit Society

A Primary Agricultural Credit Society (PACS) is a basic unit and smallest co-operative credit institution in India It works on the grassroots level (gram panchayat and village level).

Prime Minister Narendra Modi launched a new Central Sector Scheme of financing facility under the Agriculture Infrastructure Fund of Rs. 1 Lakh Crore. The scheme will support farmers, PACS, Agri-entrepreneurs, etc. in building community farming assets and post-harvest agriculture infrastructure.


Recently, the Union Budget 2023 has announced Rs 2,516 crore for digitization of 63,000 Primary Agricultural Credit Societies (PACS) over the next five years.

Organizational Structure of Primary Agriculture Credit Society

  • General Body of PACS: Exercise the control over board as well as management.
  • Management Committee:Elected by the general body to perform the work as prescribed by the society’s rules, acts, and by-laws.
  • Chairman, Vice-Chairman, and Secretary: Work for the benefit of the members by performing their roles and duties as assigned to them.
  •  Office Staff: Responsible for performing day to day work.

Significance of Primary Agriculture Credit Society

Access to Credit:

PACS provide small farmers with access to credit, which they can use to purchase seeds, fertilizers, and other inputs for their farms. This helps them to improve their production and increase their income.

Financial Inclusion:

PACS help to increase financial inclusion in rural areas, where access to formal financial services is limited. They provide basic banking services, such as savings and loan accounts, to farmers who may not have access to formal banking services.

Convenient Services:

PACS are often located in rural areas, which makes it convenient for farmers to access their services. This is important because many farmers are unable to travel to banks in urban areas to access financial services.

PACS have the capacity to extend credit with minimal paperwork within a short time.

Promoting Savings Culture:

PACS encourage farmers to save money, which can be used to improve their livelihoods and invest in their farms.

Enhancing Credit Discipline:

PACS promote credit discipline among farmers by requiring them to repay their loans on time. This helps to reduce the risk of default, which can be a major challenge in the rural financial sector.

Read also: India’s Role in Carbon Credit Generation

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