Ahmedabad: Agricultural non-performing assets (NPAs) in Gujarat registered an 11.2% growth, from Rs 6,371 crore in FY2025 to Rs 7,083 crore in FY26, according to the latest report by State Level Bankers’ Committee (SLBC) Gujarat. According to farmers and bankers, the rise in NPAs is due to poor yields that hit farmers, who are already burdened by higher cost of cultivation.Crop loan NPAs rose 14% to Rs 2,934 crore from Rs 2,573 crore during the same period, while agricultural term loan NPAs climbed 9.2% to Rs 4,149 crore from Rs 3,798 crore.Banking sector sources said that even though the gross outstanding-to-NPA ratio has marginally declined, there is some agrarian stress in certain areas, which has led to a rise in NPAs this time.“This is a function of low farm incomes due to crop losses and higher input costs, indicating agrarian stress. Erratic and unseasonal rains affected crop yields during the previous agricultural season, leaving many farmers with lower-than-expected returns despite spending more on cultivation,” said a source.Officials also cited shortages of key fertilisers during the sowing season, which disrupted farm operations in some regions. At the same time, seed prices increased, pushing up cultivation costs and adding to farmers’ borrowing requirements.Pragnesh Patel, a farmer from Viramgam, said last year’s kharif season left many cultivators with lower incomes despite higher spending. “Seed prices rose by nearly 50%, while shortages of seeds and fertilisers delayed sowing in many places. Rain was also uneven, affecting crop growth and reducing returns. This has weakened our repayment capacity,” he said.The rise in crop loan NPAs indicates immediate repayment stress linked to recent harvests, while the increase in term loan defaults points to broader financial strain among farmers who have invested in irrigation equipment, farm machinery and other long-term assets.Dinesh Damji, a farmer from Dhari, said yields and crop quality both suffered. “Crop quality declined by nearly 20%, which reduced the prices farmers received. Even those who sowed early did not benefit, as market prices for crops such as groundnut and cotton remained weak,” he said.Box: Agriculture credit quality in GujaratNPA (₹, Cr)FY25FY26ChangeTotal6,3717,083+11.2%Crop Loan2,5732,934+14.0%Agri Term Loan3,7984,149+9.2%Source: SLBC Gujarat
