Need for finance  
  1. Purchase of new inputs
  2. Purchase of implements
  3. Better management of risk
  4. Permanent improvement in land
  5. Better marketing of crops
  6. Facing crises
   Classification of Agricultural Finance
 Agricultural credit has been classified into three 
 categories based on the periods for which the 
 loan is given. Theses are 
 1. short-term credit (crop loan) - for 15 months 
 period and is meant for meeting the needs like 
 seed,  fertilizer,  labour,  cattle  feed,  etc.  The 
 farmer can repay the loan after harvest of the 
 crop.
                       
   2.  Medium-term credit.  The  period  for 
   medium term loan is from 15 months to 
   five years. These loans are provided for 
   meeting    the   expenses   on    land 
   improvements,    digging   of    wells, 
   purchase of implements and machinery, 
   farm  animals,  etc.  The  period  for 
   repayment is kept upto 5 years.
                              
    3.The  long  term  credit  -    is  for  longer 
    period than 5 years. This type of credit is 
    given     for   activities    requiring     heavy 
    investment. 
    The Land Development Banks provide only 
    the long term finance; while the Regional 
    Rural Banks give loans only to the weaker 
    sections  like  small  and  marginal  farmers, 
    agricultural labourers, village artisans, etc
  •       
  On the Basis of Purpose, Agricultural 
  credit needs of the farmers can be 
  classified on the basis of purpose 
  into the following categories:
  (i) Productive:
  (ii) Consumption needs and;
  (iii) Unproductive.