Financial requirements of the farmers can be classified on the basis of time period: (A) Short period (B) Medium period (C) Long period (D) Very very long period
Choose the correct answer from the options given below:

Correct option is B

The correct answer is (B) (A), (B) and (C) only

Explanation:
• In agricultural finance, credit is traditionally classified into three categories based on the duration of the loan.
• Short-term loans (A): Usually for a period of up to 15 months. These are taken for seasonal requirements like buying seeds, fertilizers, and pesticides.
• Medium-term loans (B): Usually for a period ranging from 15 months to 5 years. These are taken for purchasing cattle, agricultural implements, or making minor improvements to the land.
• Long-term loans (C): Usually for a period of more than 5 years (up to 15-20 years). These are taken for permanent improvements like buying heavy machinery (tractors), land leveling, or digging tube wells.
• There is no recognized category called "Very very long period" (D) in standard agricultural economics.

Information Booster:
• Short-term credit is also known as "Crop Loans" or "Production Credit."
• Long-term credit is also known as "Investment Credit."
• Regional Rural Banks (RRBs) and Co-operative Banks are primary sources of short and medium-term credit, while Land Development Banks (now SCARDBs) primarily provide long-term credit.

Additional Knowledge:
• The classification helps policy makers like NABARD design specific schemes for different farming needs.
• Option D is a distractor used to test the candidate's precise knowledge of financial terminology.