Primary Agricultural Credit Societies (PACS)
Why in news?
The government approved a plan in 2023 to establish 2 lakh new multipurpose PACS, dairy, and fishery cooperatives to cover all panchayats by 2028. As of January, 2026, 32,802 new societies have been registered nationwide, with 15,793 dairy and fishery cooperatives strengthened. Uttar Pradesh leads with 5,925 new registrations, followed by Odisha (2,281) and Madhya Pradesh (1,763).​
About PACS
Primary Agricultural Credit Societies (PACS) are the grassroots institutions of India’s cooperative credit system, directly serving farmers by providing short-term loans, inputs, and now expanding into storage, marketing, and digital services.
- Role: They act as the final link between farmers and higher financing agencies like District Central Cooperative Banks, NABARD, and RBI.
- Membership: Farmers and rural borrowers form the general body, which controls the management board.
Functions of PACS
- Credit Services
- Provide short-term and medium-term agricultural loans.
- Collect repayments directly from farmers.
- Input Distribution
- Supply seeds, fertilizers, pesticides, and other farm inputs.
- Marketing & Procurement
- Help in procurement of crops at Minimum Support Price (MSP).
- Facilitate storage and marketing of produce.
- Diversified Activities (New Initiatives)
- Dairy, fishery, warehousing, custom hiring centers, and even grain storage infrastructure.
- Government has introduced 20 new activities to make PACS profitable.
Advantages
- Accessibility: Farmers get loans without complex banking procedures.
- Community-Based: Local control ensures trust and accountability.
- Support for Small Farmers: Helps marginal and small farmers who often lack collateral.
- Diversification: New activities increase income streams and sustainability.
Challenges
- Overdue Loans: High levels of non-repayment weaken financial health.
- Limited Professional Management: Often run by local committees with low technical expertise.
- Political Interference: Can affect transparency and efficiency.
- Need for Modernization: Digitization and diversification are still in progress.
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