New Delhi, Aug. 28 -- Public sector banks (PSBs) could soon start financing the entire value chain around specific agricultural products identified for each district, rather than lend separately to farmers and businesses along the chain. This cluster financing approach could, therefore, shift the focus from financing individuals to supporting the broader farm ecosystem around district-level products.

As per a proposed framework of the finance ministry's department of financial services, in coordination with the department of agriculture and farmers welfare, banks would get six months to draw up cluster-based lending plans, covering farmers and farmer producer organizations (FPOs) as well as aggregators, processors, storage and logistics ...