The Madhya Pradesh government has approved the ‘Kavach Yojana’ to provide financial relief to farmers whose access to fresh institutional credit has been affected by pending investigations related to their loan accounts. The initiative is expected to benefit around 5,000 farmers associated with cooperative societies and help them reconnect with the formal credit system. As part of the plan, cooperative banks will create a special fund, while the state government will provide ₹25 crore as one-time share capital assistance.
The state Cabinet approved the Cooperation Department’s ‘Kavach Yojana’ during a meeting held at the Mantralaya on August 4, 2026. The Madhya Pradesh government has designated 2026 as the ‘Year of Farmers’ Welfare’, with a focus on increasing farm incomes, improving economic security and ensuring timely access to finance for agricultural activities. The scheme is aimed at preventing prolonged administrative or investigative processes from disrupting the livelihoods and farming operations of eligible farmers.
The scheme is expected to cover around 5,000 farmers associated with cooperative societies whose access to new credit facilities was affected because investigations concerning irregularities in their loan accounts were pending. The government intends to bring these affected farmers back into the institutional financial system so that they can resume agricultural activities and access eligible government schemes. The initiative is particularly significant for farmers who depend on cooperative banks and institutional credit to meet seasonal agricultural expenses.
To facilitate fresh credit for eligible farmers, the Apex Bank and District Cooperative Banks will create a special fund of up to ₹50 crore at their respective levels. In addition, the state government has decided to provide ₹25 crore as one-time share capital assistance in the interest of farmers. The measures are intended to strengthen the credit mechanism and create a pathway for eligible farmers to regain access to institutional agricultural loans.
Why Timely Institutional Credit Matters for Farmers:
Institutional credit plays an important role in ensuring that farmers have sufficient working capital during the crop cycle. Farmers can use agricultural loans for purchasing seeds, fertilisers, farm machinery, irrigation facilities and other essential inputs. Timely access to formal credit can also reduce farmers’ dependence on costly informal borrowing. Through the Kavach Yojana, the government aims to ensure that affected farmers can continue their agricultural activities without prolonged disruption caused by pending cases or investigations.
Focus on Strengthening the Farm-to-Market Value Chain:
The state government’s farmer welfare initiatives extend beyond access to credit. It is also focusing on strengthening the agricultural value chain from farm to market. Key areas include expanding irrigation capacity, promoting modern agricultural technologies, encouraging natural and organic farming, and improving farmers’ access to institutional finance. The broader objective is to make agriculture more productive, sustainable and economically viable for farmers.
Balram Agriculture Festival to Continue Till November 13:
As part of Farmers’ Welfare Year 2026, the Madhya Pradesh government is organising the ‘Balram Agriculture Festival’ across all districts of the state. The festival began on July 15, 2026, and will continue until November 13, 2026. During the 122-day programme, agriculture department officials are engaging directly with farmers at agricultural produce market yards, while agricultural scientists are providing guidance on modern farming practices and technologies.
Farmers Being Encouraged to Adopt Modern Technologies:
During the Balram Agriculture Festival, farmers are being encouraged to adopt technologies and practices that can improve productivity, resource efficiency and farm profitability.
The key focus areas include:
FAQs:
1. What is Madhya Pradesh Kavach Yojana?
It is a government initiative designed to help eligible farmers regain access to institutional agricultural credit affected by pending loan-related investigations.
2. How many farmers may benefit?
Around 5,000 farmers associated with cooperative societies are expected to benefit.
3. How much share capital will the state provide?
The Madhya Pradesh government will provide ₹25 crore as one-time share capital assistance.
4. How large will the special fund be?
The Apex Bank and District Cooperative Banks will create a special fund of up to ₹50 crore at their respective levels.
5. What is the objective of the scheme?
The main objective is to reconnect affected farmers with the formal credit system and help them continue agricultural activities without prolonged disruption.
