Explain the classification of agricultural credit on the basis of the time period.

On the basis of tenure (time period), agricultural credit is classified as follows: 

• Short Term credit 
• Medium Term credit 
• Long Term credit 

(i) Short Term Credit: It is required for consumption and to carry out farming and other activities. It is for a period not exceeding 2 years. It is taken to meet expenses on purchasing fertilizer, fodder, HYV seeds as well as to meet religious expenses or expenses of social ceremonies. These loans are normally repaid after the harvest period.

(ii) Medium Term Credit: The period for these loans is up to 5 years. It is mainly needed to purchase cattle, equipment, to make improvements on the land, to dig up canals, etc. 

(iii) Long Term Credit: When farmers borrow a loan for a period of more than 5 years, it is called a long-term loan. It is mainly used to buy additional land, irrigation, making permanent improvements on the land, etc.