The move is suggested to increase the credit flow to the priority sector, and reduce the dependence of small farmers on moneylenders who extort the farmers by levying heavy interest. The sum borrowed under this scheme can be used to buy seeds, fertilizers, or diesel required to raise crops.

Farmers who repay loans before the due date would be exempt from interest. According to a senior official, this kind of loan scheme is first of its kind in the country. According to the officials close to the scheme, this would be available to both kharif and rabi crops and loans would be available through over 5000 cooperative societies in the state.

Total fund for such loans have been increased from Rs. 8,000 crore to Rs. 9,431 crore. The government's move is said to be directed towards farmers in distress, and also provide compensation to farmers struck with natural calamities.