The Massive Impact Of Pacs On Agricultural Productivity Inner

Primary Agricultural Credit Societies (PACS) are revolutionizing the farming industry. PACS improves methods and increases productivity by using data, analysis, and automation. This blog examines how PACS transforms traditional farming through modern technology for higher yields at lower costs while promoting sustainable land cultivation. 

We aim to provide a comprehensive grasp on how PACSs are revolutionizing crop production and contributing towards future advancements in food security. Through exploring practical applications and tangible advantages, we highlight the measurable benefits of these technologies through a case study.

What Are PACS?

The cornerstone of the short-term cooperative credit system is PACS, an acronym for Primary Agricultural Credit Societies. Operating at a fundamental level, these societies actively provide loans to individuals in rural regions, manage loan repayments, and support distribution and marketing initiatives.

The cooperative credit structure relies heavily on the involvement of PACS. Acting as a vital intermediary, they serve as a conduit between rural loan recipients and large financial institutions such as Scheduled Commercial Banks, RBI, and NABARD.

The Union Budget of 2023 has allocated a significant amount of Rs. 2,516 crore towards digitizing PACS to effectively aid approximately 13 crore small and marginal farmers. Each PACS has received approximately Rs. 4 lakh for modernizing infrastructure. The undertaking entailed converting antiquated financial documents into a digital format and integrating them with cloud software.

The digitization of PACS holds significant importance for various reasons:

  • Its goal is to enhance the functioning of these societies, fostering openness and accountability, ultimately enabling a range of positive developments.
  • The objective is to establish PACS as a pivotal entity capable of dispensing services such as Direct Benefit Transfer (DBT), Interest Subvention Scheme (ISS), Pradhan Mantri Fasal Bima Yojana (PMFBY), and facilitating the disbursement of agricultural necessities like fertilizers and seeds.
  • This endeavor also aims to facilitate job creation, and it is foreseen that each center has the potential to create about 10 employment prospects. The ultimate objective over five years ahead is to expand the coverage of PACS up to 3 lahks.

The Impact Of PACS On Agricultural Productivity

  • Input Management

PACS ensures that farmers have the necessary high-quality seeds, fertilizers, and pesticides so they can improve their crop yields, increase the quality of their crops, and decrease production expenses. By providing a stable supply of inputs, PACS helps farmers to enhance their production process and achieve higher returns from it.

  • Improved Resource Utilization

PACS help farmers use resources effectively because they provide a chance to utilize modern agricultural technology and equipment. They also educate farmers through training and extension services about good methods for farming, managing water, and controlling pests. This results in less waste, improved soil quality, and increased total output.

  • Better Market Distribution

Farmers can enter bigger markets because of PACS, which provides transport, storage, and processing services. This enables the selling of agricultural products at fair prices while reducing losses after harvest time. PACS helps improve farmers’ earnings and promote development in the rural economy by removing middlemen and establishing direct market connections.

  • Financial Inclusion

For farmers who cannot use normal banks, PACS offers a range of financial services: loans, savings accounts, and insurance specifically tailored to meet the unique needs of agricultural individuals. This inclusion in finance aids those engaged in farming activities by enabling them to invest funds into their farms; embrace new technologies; and manage risks associated with the uncertainties inherent in agriculture.

  • Sustainability Practices

PACS helps promote eco-friendly farming methods. They do this by providing access to environment-friendly supplies, teaching conservation farming techniques, and giving rewards for responsible land management. By backing up sustainable agriculture, PACS protects the environment, conserves natural resources, and ensures a bright future for the agricultural industry.

Case Study: Impact Of PACS On Farmer’s Economy In Panchmahal District, Gujarat

In the tribal area of Panchmahal district, Gujarat, there is a network containing more than 100 Primary Agricultural Cooperative Societies (PACS). These PACS give crop production loans to farmer members who live in different villages or groups of villages. An examination was carried out to evaluate the socio-economic effects of these PACS. The study concentrated on 168 people who responded – this group included 84 borrowers and an equal number of non-borrowers.


  • Borrower farmers had larger cropped land and higher cropping intensity, indicating investment in irrigation systems for year-round farming.
  • Employment increased by 8.21% and 9.29% before and after receiving financial assistance, attributed to improved irrigation systems and increased productivity.
  • Access to loans from PACS led to increased asset value for farmers, enabling investments in irrigation facilities, farm structures, livestock, and land.
  • Challenges in loan repayment included delinquency by 29.76% of borrowers, with small-scale and marginal farmers having the highest arrears. Factors contributing to default included low productivity/income, crop failures, and high family expenditure.



PACS has a profound and versatile impact on agricultural productivity. By implementing digital initiatives and providing financial assistance, they are revolutionizing traditional farming techniques, improving input management, maximizing resource utilization, and streamlining marketing and distribution activities.

Furthermore, PACS promotes financial inclusivity and advocates for sustainable practices resulting in heightened yields, decreased expenses, and fortified resilience within the agricultural sector. PACS progress and broaden their scope as they advance agricultural innovation and guarantee food security, making their role imperative for upcoming developments.

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