Abstract
Climate change is increasingly recognized as a critical factor influencing agricultural systems worldwide. In India, the interplay between climate variability and farm credit is profound, as agriculture remains heavily reliant on weather patterns and natural resources. This paper explores the multifaceted impact of climate change on the demand and supply of farm credit, highlighting key challenges faced by farmers, financial institutions, and policymakers. Using case studies, field surveys, and secondary data analysis, the research examines how climatic risks such as erratic rainfall, droughts, floods, and heatwaves amplify financial vulnerabilities among farmers, leading to increased loan defaults and credit constraints. It also assesses the role of various schemes in mitigating climate-induced risks through investments in adaptive technologies and resilient farming practices. The findings reveal a growing need for tailored credit products, risk-sharing mechanisms like insurance-linked loans, and enhanced institutional frameworks to address climate-induced challenges in farm credit delivery. The paper concludes with recommendations for policymakers to align credit policies with climate resilience goals, ensuring financial inclusion and sustainability in the agricultural sector amidst evolving climate risks.
Literature Review
Climate change has had a significant impact on agricultural dynamics, especially on farm banking availability and demand. Farmers now face greater risks due to rising temperatures, unpredictable rainfall patterns, and a rise in the frequency of catastrophic weather occurrences, which calls for strong financial support systems.
The Pradhan Mantri Fasal Bima Yojana’s contribution to climate risk mitigation through crop insurance is highlighted in PMFBY Reports (2018–2022). According to these assessments, states like Maharashtra and Bihar have made important claims that highlight how prone they are to drought and flooding. However, as the 2023 claims data shows, issues still exist, including inadequate coverage and delayed settlements. A Bihar study highlights how climate-related uncertainties raise credit demand and put farmers at danger of debt traps. It implies that farmers’ financial constraints are exacerbated by their frequent reliance on unofficial sources due to limited access to institutional financing.
 In “How India Can Minimize Climate Risk in Agriculture,” Ashok Gulati emphasizes the importance of improved irrigation systems, diversified planting patterns, and integrating insurance programs with technology. He supports governmental initiatives that combine financial tools like providing climate adaptation plans.
Narendra Singh Tomar’s observations on Indian agriculture stress how crucial it is to increase institutional finance penetration and use technology to build up farming’s resistance to climate shocks.Writings by P. Sainath explore rural suffering and the socioeconomic hardships faced by farmers. He calls for reforms for fair access and criticizes policies that ignore systemic problems in farm credit systems.
There are significant shortfalls in the effectiveness and outreach of PMFBY, according to ResearchGate papers on its implementation. Among the suggestions are encouraging public-private collaborations and increasing the openness of claim settlements.
 These findings make it obvious that climate change demands new finance arrangements suited to farmers’ needs. Sustainable agricultural development depends on adopting climate-resilient techniques, increasing insurance effectiveness, and granting timely institutional credit. In the face of growing climate uncertainty, these steps allow farmers to secure their livelihoods while reducing risks.
Click Here To Download The Paper
đź“ŚAnalysis of Bills and Acts
đź“Ś Summary of Reports from Government Agencies
đź“Ś Analysis of Election Manifestos