Rs. 800 Million Sustainable Agriculture Plan Faces Storm-Test

The government has approved a new concessional loan scheme titled the Sustainable Agriculture Program, positioning it as a cornerstone policy to revive rural livelihoods and expand agriculture’s role in national economic growth. Set to begin next year, the program will channel Rs. 800 million into the sector through a revolving credit fund. Cabinet approval was granted this week for the program to operate annually, using Participatory Finance Institutions as its primary delivery mechanism.

The initiative is anchored to the existing Smallholder Agribusiness Partnerships Program, funded jointly by the Government and the International Fund for Agricultural Development, with all loan recoveries redirected into a newly created Sustainable Agricultural Fund.

Individual borrowers and institutions can access up to Rs. 5 million through agricultural and Samurdhi banks at a highly concessional 2% annual interest rate, with repayment periods extending to five years and grace periods of up to one year. Bulk loans, capped at Rs. 500,000 per beneficiary, will carry similar interest rates with shorter three-year repayment terms.

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