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Role of Banking in Agricultural Sector
Role of Banking in Agricultural Sector
Role of Banking in Agricultural Sector
Bachelor of Commerce
Banking and Insurance
Semester V
Submitted
In Partial Fulfillment of the requirements
for the Award of Degree of Bachelor of
Commerce-Banking & Insurance
By
Sonal Gupta
Project Guide:
Ms. Binal Mehta
University of Mumbai
S.I.E.S (Nerul) College OF Arts, Science &
Commerce
Plot 1-C Sector V, Nerul, Navi Mumbai-400 076.
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2010-11
S.I.E.S (Nerul) College OF Arts, Science &
Commerce
Plot 1-C Sector V, Nerul, Navi Mumbai-400 076
CERTIFICATE
This is to certify that Ms. Sonal Gupta of
B.Com Banking and Insurance Semester V
(2011-12) has successfully completed the
project on Role of Banking in Agricultural
Sector under the guidance of Ms. Binal
Mehta.
Project Guide Course Co-Ordinator
Principal
Ms. Binal Mehta Mrs Bhumika More Mrs.Rita
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Basu
Internal Examiner External
Examiner
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DECLARATION
I, Sonal Gupta, the student of B.Com
Banking & Insurance Semester V (2011-12)
hereby declare that I have completed the
project on Role of Banking in Agricultural
Sector.
The information submitted is true and
original to the best of my knowledge.
Signature
SONAL GUPTA
ACKNOWLEDGEMENT
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A project of this scope can be done only through co-operative
efforts of many people whose advice and ideas contribute in the
making of the project.
I am sincerely thankful to our coordinator Mrs. Bhumika
More for her unconditional support and valuable thoughts.
Her guidance and encouragement have been instrumental in
making this project a learning experience.
I am thankful to my internal guide Ms. Binal Mehta for her
direction and motivation throughout this project.
I am grateful to SIESCOM and SIES Library for helping me
and providing me with so many facilities without the help of
which the completion of this project would not have been
possible.
My over-riding debt continues to my family and my friends
who have helped me to shape my thoughts.
SONAL
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GUPTA
OBJECTIVE OF THE STUDY
● To gain deep knowledge about the role of
banking in agricultural sector.
● To understand the necessity and importance of
banking in Indian Agriculture industry.
● To understand how banking helps the agricultural
industry.
● To understand how NABARD frame policies and
issues directions to banking companies.
● This project aims in giving a brief understanding
about the meaning and various elements of
Banking companies.
It highlights the various dimensions of the
Banking companies scheme in Indian
Agricultural companies.
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RESEARCH METHODOLOGY
The Research methodology for this project was done in
one way:
SECONDARY SOURCE:
The secondary information is collected from websites and other
information has been collected from newspaper and books.
RESEARCH LIMITATION
● There were few websites on role of banking in
agricultural
sector.
● The data provided by the website are not fully reliable.
●
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EXECUTIVE SUMMARY
This project focuses on the Role of Banking in
Agricultural sector.
With the help of banks agriculture sector has come
up with tremendous changes. And even developed at a
large scale. Indian banks have come up with many
schemes related to agriculture to support the farmers
and other people who become a part of agriculture.
There are many regional rural banks setup in each
state to look after the welfare of farmers as well as
their agriculture. A dynamic and growing
agricultural sectorneeds adequate finance
through banks to accelerate the overall growth.
With the government’s keen interest and special
budget allocation for agricultural in the 11th five-year
plan, it is now in the hands of the farmer to reap the
benefit of the schemes offered by the banks.
INDEX
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SR.no Topic Page no.1 Introduction 92 Role of banks in agricultural sector 133 NABARD 204 Agriculture and Food management in
India25
5 Schemes of Nationalized Banks related to Agriculture
42
6 Schemes of coperative agricultural banks
48
7 Schemes related to central ministries 518 Schemes related to state departments 549 Regional rural banks 64
10 Conclusion 7111 Bibliography 72
1. INTRODUCTION
Bank is an organization, usually a corporation, chartered by a state
or federal government or private entity, which does most or all of
the following: receives demand and time deposits , honors
instruments drawn on them, and pays interest on them
discounts notes, makes loans, and invests in securities
collects cheques, drafts and makes notes, certifies depositors
cheque and issues drafts and cashier's cheques. Banking in
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general terms means the business activity of accepting and
safeguarding money owned by other individuals and entities, and
then lending out this money in order to earn profit. Agriculture is
the backbone of Indian Economy. About 65% of Indian population
depends directly on agriculture and it accounts for around 22% of
GDP. Agriculture derives its importance from the fact that it has
vital supply and demand links with the manufacturing sector.
During the past five years agriculture sector has witnessed
spectacular advances in the production and productivity. This lead
banks to influence the agriculture sector.
Rural Infrastructure Development Fund (RIDF):
RIDF was announced by the Government of India in 1995-96 to
boost public sector investment in agriculture and rural
infrastructure.
Micro Finance:
Micro finance scheme has been introduced by National Bank for
Agriculture and Rural Development (NABARD), the apex bank
for agriculture and rural development in India, to improve the
access of the rural poor to formal institutional credit and other
financial products. In all 547 banks, which include 47 commercial
banks, 158 RRBs, 342 cooperative banks are now actively
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involved in the operation of Self Help Group (SHG)-
Bank Linkage Programme to spread the facility of micro finance to
the needy small and marginal farmers and tiny entrepreneurs. The
programme has enabled nearly 329 lakh poor families in the
country to gain access to micro finance facilities from the formal
banking system. Capital Formation in Agriculture: The share of the
agriculture sector's capital formation in G.D.P. declined from 2.2%
in the late 1990s to 1.9% in 2005-06. Stagnation or fall in the
public investment in irrigation is partly responsible for this fall.
However there is indication of a reversal of this trend with public
sector investment in agriculture accelerating since 2002-03.The
share of public investment in gross investment in agriculture
increased by 6.5 percentage points from 1999-2000 to reach 24.2%
in 2005-06.
Marketing of Agricultural Products Form of Markets exists in
India: Agricultural markets in India are dominated by the existence
of unorganized and unregulated agricultural mandies with the
presence of a large number of middlemen and widespread
prevalence of malpractices. Absence of proper warehousing
facilities in the villages, lack of proper transportation facilities and
infrastructure such as rails and good quality all weather roads and
ignorance about the market prices of their products are some of the
important factors for exploitation of farmers from middle men.
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They are forced to sell their products to these middlemen at the
farm gate at throwaway prices.
Agricultural Market Reforms in India: Ministry of Agriculture had
formulated a model law on agricultural marketing in consultation
with State/Union territory Governments to bring about marketing
reforms in line with emerging trends. This model act enables
establishment of private markets/yards, direct purchase centers,
consumers/farmers markets for direct sale, and promotion of
public-private partnership (PPP) in the management and
development of agricultural markets in the country. It also provides
for exclusive markets for onion, fruits, vegetables, and flowers.
Regulation and promotion of contract farming arrangement has
also been made a part of this legislation. A provision has also been
made for constitution of State Agricultural Produce Standard
Bureau for promotion of grading, standardization, and quality
certification of agricultural produce. So far, 15 States and 5 Union
Territories have amended their Agricultural Produce Marketing
Committee (APMC) Act to derive the benefits of market reforms.
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2. ROLE OF BANKS IN AGRICULTURAL
SECTOR:-
Commercial banks and RRBs together extended credit to 77.49
lakh new farmers during 2009-10 and cooperative banks to 13.43
lakh, thus taking the total number of farmers brought newly under
the banking system to 90.62 lakh. The total number of agricultural
loans financed as of March 2010 was 4.82 crore. The total credit
flow to agriculture during 2010-11 by commercial banks,
cooperative banks and RRBs up to September 2010 was of the
order of Rs.1,94,392.63 crore, amounting to 52 per cent of the
annual target of Rs.3,75,000.
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The flow of institutional credit to agriculture and allied activities
has greatly helped the farmers who have no resources on their own.
The agencies are Cooperative Banks (about 20 per cent), Regional
Rural Banks (about 10 per cent), and Commercial Banks (about 70
per cent). The total flow of credit in rupees was nearly two lakh
crore in 2005-06, more than two and a quarter lakh crore in 2006-
07, a little more than two and a half lakh crore in 2007-08, nearly
four lakh crore in 2009-10, and about two lakh crore till September
30 of last year.
The Kisan Credit Card (KCC) Scheme has become widely
accepted mechanism for delivery of credit to farmers. The scheme
now also covers borrowers of the long-term cooperative credit
structure. In order to safeguard the interests of KCC holders,
NABARD has allowed banks the discretion to opt for ‘any
insurance company of their choice’. The banks have to keep in
mind the guiding principles of the Personal Accident Insurance
Scheme (PAIS), especially the premium-sharing formula and
coverage, while negotiating with insurance companies.
With a view to making the KCC more user-friendly, NABARD has
enlarged its scope to cover term loans for agriculture and allied
activities, including a reasonable component for consumption
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needs, besides the existing facility of providing crop loan limit.
Crop loans disbursed under the KCC Scheme for notified crops are
covered under Rashtriya Krishi Bima Yayana (National Crop
Insurance Scheme), a crop insurance scheme introduced to protect
the interests of the farmer against loss of crop yield caused by
natural calamities, pest attacks, etc. The KCC has thus become a
single window for a comprehensive credit product.
The banking system has issued 955.77 lakh KCCs involving a total
sanctioned credit limit of Rs.4,37,241 crore as on 31 August, 2010.
The share of commercial banks stood at 44.4 per cent of the total
number of cards issued by the banking sector followed by
cooperative banks (40.9 per cent) and RRBs (14.7 per cent).
NABARD is the nodal agency for implementing the Scheme in
respect of cooperative credit institutions and RRBs. The Bank has
released of Rs.24,994.89 crore towards debt waiver and
Rs.3005.11 crore towards debt relief claims.
The consolidated balance sheet of the SCBs in India during 2009-
10 shows relatively sluggish growth performance, marked mainly
by slow deposit growth. The growth in profits of SCBs too was
lower in 2009-10 than in the previous year. Further, there was a
rise in the NPA ratio of SCBs in 2009-10. Though assets quality
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emerged as a concerned for the banking sector, its capital adequacy
remained fairly robust during the yeaqr, providing cushion for any
further losses.
The overall growth in the consolidated balance sheet of SCBs in
2009-10 was 15.0 per cent, which was lower than 21.1 per cent
during the previous year. Moreover, the decline in growth could be
seen across all bank groups with the notable exception of new
private-sector banks.
The major factor contributing to the slowdown in growth banks’
balance sheets was deposits. The growth in deposits of SCBs
decelerated to 17.0 per cent in 2009-10 from 22.4 per cent in 2008-
09. Further, credit growth constrained by a slowdown in deposits
growth was placed at 16.6 per cent in 2009-10 as compared to 21.1
per cent in 2008-09. The deceleration in credit growth was
accentuated on account of an overall slowdown of the economy in
the aftermath of the global financial turmoil. However, while bank
credit growth witnessed a slowdown on a year-on-year basis, bank
credit in general and credit of industry in particular, showed
distinct signs of recovery from October 2009 onwards as economic
recovery became more broad-based. The credit-deposit ratio at the
end of March 2010 was 73.6 per cent, marginally lower than that at
the end of March 2009. There was an increase in the proportion of
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current and savings accounts (CASA) in 2009-10 in contrast to a
declining trend noted in the recent past.
On a year-on-year basis, the major drivers of non-food bank credit
in 2009-10 were industry and agriculture. There was considerable
slowdown in the growth in personal loans and also credit to the
services sector during the year.
The growth in investments of banks decelerated to 18.6 per cent in
2009-10 from 23.1 per cent in 2008-09. Also, there were notable
changes in the investment portfolio of banks. The percentage
contribution of investments in approved securities declined in
2009-10 in contrast to an increase in 2008-09, which was mainly
due to banks’ preference to park their funds in low-risk instruments
against the backdrop of prevailing global uncertainties.
Consequently, the percentage contribution of investments in non-
SLR (statutory liquidity ratio) securities by banks showed an
increase in 2009-10 driven mainly by an increase in investments in
mutual funds.
Similar to the slowdown in growth in balance sheets, there was a
moderation in the financial performance of SCBs in 2009-10. The
growth in both income and expenditure of the SCBs slowed down
leading to a deceleration in the growth of operating and net profits
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of SCBs. Every indicator of profitability also showed a decline in
2009-10. The most salient indicator of profitability, return on
assets (RoA) declined to 1.05 per cent in 2009-10 from 1.13 per
cent in 2008-09. Further, return on equity (RoE) too declined to
14.3 per cent in 2009-10 from 15.4 per cent in 2008-09.
After abstaining during 2008-09, banks started resorting to the
capital market for raising resources in 2009-10. The resources
raised from the capital market by banks were in the form of both
public issues and private placement in 2009-10.
GOI has taken great note on the need of farmers for credit flow.
The Union Minister of Finance, Pranab Mukherjee, inhis budget
speech which he presented on February 28, regarding Budget for
the year 20011-2012, has clearly spelled out the details. Mukherjee
laid great emphasis on organic farming, combining modern
technology with traditional farming practice like green manuring,
biological pest control and weed management.
In order to facilitate credit flow to the farmers, the Union Minister
of Finance has announced a raise in the target of credit flow from
Rs.3,75,000 crore in 2010-11 to Rs.4,75,000 crore during 2011-12.
Banks have been asked to step up direct lending for agriculture and
credit to small and marginal farmers. Interest is a mere 7 per cent,
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down from 9 per cent to those farmers who repay their crop loans
on time. For the year 2011-12 further incentive by reducing
another 3 per cent in 2011-12 will be implemented. Thus farmers
who repay their crop loans in time will pay a very nominal interest
of only 4 per cent per annum. NABARD will also be strengthened
so as to be able to play a crucial role in this sector, with substantive
capital inflow from the Government.
It is, indeed, tragic when one peeps at the functioning of banks in
Meghalaya. From the figures of the budget speech for the year
2011-12, delivered by the Chief Minister incharge Finance, Dr.
Mukul Sangma, the State has a low Credit-Deposit (CD) ratio of
33.43 per cent as of December 2010, as against the national norms
of 60 per cent. This calculates to nearly half of the National data,
which is therefore too low. To address the issue of credit flow in
various sectors of the economy, agriculture and allied activities not
excluding, banks with Credit-Deposit ratio below 20 per cent have
been advised to chalk out an action plan to improve their
performance. They are also instructed to maintain a CD ratio of
above 40 per cent. (With inputs from PIB)
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3. NABARD:-
NABARD was established on the recommendations of Shivaraman
Committee, by an act of Parliament on 12 July 1982 to implement
the National Bank for Agriculture and Rural Development Act
1981. It replaced the Agricultural Credit Department (ACD) and
Rural Planning and Credit Cell (RPCC) of Reserve Bank of India,
and Agricultural Refinance and Development Corporation
(ARDC). It is one of the premiere agencies to provide credit in
rural areas.
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Role
● serves as an apex financing agency for the institutions
providing investment and production credit for promoting
the various developmental activities in rural areas
● Takes measures towards institution building for improving
absorptive capacity of the credit delivery system, including
monitoring, formulation of rehabilitation schemes, restructuring
of credit institutions, training of personnel, etc.
● Co-ordinates the rural financing activities of all institutions
engaged in developmental work at the field level and maintains
liaison with Government of India, State Governments, Reserve
Bank of India (RBI) and other national level institutions
concerned with policy formulation undertakes monitoring and
evaluation of projects refinanced by it.
NABARD's refinance is available to State Co-operative
Agriculture and Rural Development Banks (SCARDBs), State Co-
operative Banks (SCBs), Regional Rural Banks (RRBs),
Commercial Banks (CBs) and other financial institutions approved
by RBI. While the ultimate beneficiaries of investment credit can
be individuals, partnership concerns, companies, State-owned
corporations or co-operative societies, production credit is
generally given to individuals.
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NABARD has its head office at Mumbai, India NABARD operates
throughout the country through its 28 Regional Offices and one
Sub-office, located in the capitals of all the states/union
territories.Each Regional Of. fice[RO] has a Chief General
Manager [CGMs] as its head, and the Head office has several Top
executives like the Executive Directors[ED], Managing
Directors[MD], and the Chairperson.It has 336 District Offices
across the country, one Sub-office at Port Blair and one special cell
at Srinagar. It also has 6 training establishments.
NABARD is also known for its 'SHG Bank Linkage Programme'
which encourages India's banks to lend to self-help groups (SHGs).
Because SHGs are composed mainly of poor women, this has
evolved into an important Indian tool for microfinance. As of
March 2006 2.2 million SHGs representing 33 million members
had to been linked to credit through this programme. NABARD
also has a portfolio of Natural Resource Management Programmes
involving diverse fields like Watershed Development, Tribal
Development and Farm Innovation through dedicated funds set up
for the purpose.
Rural Innovation
NABARD's role in rural development in India is phenomenal.
National Bank for Agriculture & Rural Development (NABARD)
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is set up as an apex Development Bank by the Government of
India with a mandate for facilitating credit flow for promotion and
development of agriculture, cottage and village industries. The
credit flow to agriculture activities sanctioned by NABARD
reached Rs 1,574,800 million in 2005-2006. The overall GDP is
estimated to grow at 8.4 per cent. The Indian economy as a whole
is poised for higher growth in the coming years. Role of NABARD
in overall development of India in general and rural & agricultural
in specific is highly pivotal.
Through assistance of Swiss Agency for Development and
Cooperation, NABARD set up the Rural Infrastructure
Development Fund. Under the RIDF scheme Rs. 512830 million
have been sanctioned for 2,44,651 projects covering irrigation,
rural roads and bridges, health and education, soil conservation,
water schemes etc. Rural Innovation Fund is a fund designed to
support innovative, risk friendly, unconventional experiments in
these sectors that would have the potential to promote livelihood
opportunities and employment in rural areas.[6] The assistance is
extended to Individuals, NGOs, Cooperatives, Self Help Group,
and Panchayati Raj Institutions who have the expertise and
willingness to implement innovative ideas for improving the
quality of life in rural areas. Through member base of 250 million,
600000 cooperatives are working in India at grass root level in
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almost every sector of economy. There are linkages between SHG
and other type institutes with that of cooperatives.
The purpose of RIDF is to promote innovation in rural &
agricultural sector through viable means. Effectiveness of the
program depends upon many factors, but the type of organization
to which the assistance is extended is crucial one in generating,
executing ideas in optimum commercial way. Cooperative is
member driven formal organization for socio-economic purpose,
while SHG is informal one. NGO have more of social color while
that of PRI is political one. Does the legal status of an institute
influences effectiveness of the program? How & to what an extent?
Cooperative type of organization is better (Financial efficiency &
effectiveness) in functioning (agriculture & rural sector) compared
to NGO, SHG & PRIs.
Recently in 2007-08, NABARD has started a new direct lending
facility under 'Umbrella Programme for Natural Resource
Management' (UPNRM). Under this facility financial support for
natural resource management activities can be provided as a loan at
reasonable rate of interest. Already 35 projects have been
sanctioned involving loan amount of about Rs 1000 million. The
sanctioned projects include honey collection by tribals in
Maharashtra, tussar value chain by a women producer company
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('MASUTA'), eco-tourism in Karnataka etc.
4. Agriculture and food management in India:-
The performance of the agricultural sector influences the growth of
the Indian economy. Agriculture (including allied activities)
accounted for 17.8 per cent of the Gross Domestic Product (GDP-
at constant prices) in 2007-08, as compared to 21.7 per cent in
2003-04.
Notwithstanding the fact that the share of this sector in GDP has
been declining over the years, its role remains critical as it
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accounts for about 52 per cent of the employment in the country.
Apart from being the provider of food and fodder, its importance
also stems from the raw materials that it provides to industry. The
prosperity of the rural economy is also closely linked to agriculture
and allied activities. The rural sector (including agriculture) is
being increasingly seen as a potential source of domestic demand;
a recognition, that is shaping the marketing strategies of
entrepreneurs wishing to widen the demand for goods and
services.
In terms of composition, out of the total share of 17.8 per cent in
GDP in 2007-08 for the agriculture and allied activities sector,
agriculture alone accounted for 16.3 per cent of GDP, followed by
fishing at 0.8 per cent and forestry and logging at 0.7 per cent of
GDP.
Area, Production and Yield
Growth in the production of agricultural crops depends on acreage
and yield. Limitations in the expansion of agricultural land suggest
that increase in gross cropped area can come from multiple
cropping. In view of this, the main source of long-term output
growth is improvement in yield.
Compound growth rates of index of area under rice showed a
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negative growth of (-) 0.1 per cent per annum during 2001-08,
compared to the 1990s. Area under rice cultivation has remained
more or less stagnant in the recent years while growth in yield has
shown an increase.
Area under wheat, that was around 25 million hectares in 2002-03,
increased to 26.4 million hectares in 2005-06 and further to 28
million hectares in 2007-08. The coverage under irrigation has
been about 87 to 89 per cent of area for wheat. The compound
growth rates of indices of area, production and yield of wheat
during 1991-2000 and 2001-08 show a perceptible decline.
Cotton occupies an important place among the cash crops in
India. Cotton is grown in nine major States namely, Punjab,
Haryana, North Rajasthan, Gujarat, Maharashtra, Madhya Pradesh,
Andhra Pradesh, Karnataka and Tamil Nadu. Area under cotton
increased from 7.60 million hectares in 2003-04 to 9.43 million
hectares in 2007-08. The yield of cotton went up from 307 kgs per
hectare in 2003-04 to 466 kgs per hectare in 2007-08. The
compound growth in index of yield has shown an increase from (-)
0.4 per cent during the 1990s to 15.8 per cent during 2001-08.
However, the growth in index of area moderated, but remained
positive. The combined effect on index of production was an
increase in growth from 2.3 per cent during the 1990s to 17.5 per
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cent during 2001-08.
During 2008-09 the area sown at all-India level under kharif was
2.3 per cent less than the area sown in 2007-08 of 1,039.23 lakh
hectares. As on March 27, 2009, area sown under all rabi crops
taken together has been reported to be higher at 638.33 lakh
hectares, as compared to 619.68 lakh hectares in the corresponding
period of 2007-08.
Agricultural Inputs
Improvement in yield, which is a key to long-term growth, depends
on a host of factors that include technology, use of quality seeds,
fertilizers and pesticides and micro-nutrients, and, not the least,
irrigation. Each of these plays a role in determining the yield level
and in turn the augmentation in the level of production. The first
decisive step that a farmer takes relates to sowing. The availability
of quality seeds (among other factors) makes a critical difference
to output growth. In India, more than four-fifths of the farmers rely
on farm-saved seeds, leading to a low seed replacement rate.
The Indian Seed Programme includes the participation of Central
and State governments, the Indian Council of Agricultural
Research (ICAR), State agricultural universities and the
cooperatives and private players. There are 15 State seed
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corporations besides two national level corporations, viz. the
National Seeds Corporation and the State Farms Corporation of
India. Indian seeds programme recognizes three kinds of seed
generation, viz. breeder, foundation and certified seeds. Production
of breeder and foundation seeds during 2008-09 is anticipated at
1.00 lakh quintals and 9.69 lakh quintals, respectively, and the
distribution of certified/quality seeds at about 190.0 lakh quintals.
The Ministry of Agriculture is implementing a Central sector
scheme, “Development and Strengthening of Infrastructure
Facilities for Production and Distribution of Quality Seeds”, on all-
India basis since 2005-06. The scheme is aimed at making
available quality seeds of various crops to the farmers at affordable
price, and in time, so as to enhance seed replacement rate, boost
seed production in private sector and help the public sector seed
companies to contribute in enhancing seed production.
A major thrust under the scheme is on improving quality of farm-
saved seeds through“Seed Village Programme,” under which more
than 25,000 seed villages have been organized during 2008-09
across the country. Certified/quality seed production has increased
from 194.31 lakh quintals during 200607 to 250.35 lakh quintals
during 2008-09.
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The seed component of the Prime Minister’s Relief Package for
distressed farmers is being implemented in 31 suicide-affected
districts in four States of Maharashtra, Andhra Pradesh, Karnataka
and Kerala. Under the scheme, certified seeds are supplied at 50
per cent of the seed cost to the farmers in such affected districts.
During the year 2008-09, an amount of Rs. 445.81 crore was
released under the PM’s Relief Package.
The Protection of Plant Varieties and Farmers’ rights
(PPV&FR) Authority was established in November 2005. The
Authority has the mandate to implement provisions of the
PPV&FR Act, 2001. Fourteen crops, namely, rice, bread wheat,
maize, sorghum, pearl millet, chickpea, pigeon pea, green gram,
black gram, lentil, field pea, kidney bean, cotton and jute were
notified for the purpose of registration under the Act. The
Authority has plans to extend its coverage to forestry, aromatic
agriculture and food management and medicinal plants.
In response to the changes that have taken place in the seed sector,
the existing Seeds Act, 1966 is proposed to be replaced by a
suitable legislation to, inter alia, (i) create a facilitative climate for
growth of the seed industry so as to enhance seed replacement
rates, boost the export of seeds and encourage import of useful
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germplasm, create a conducive atmosphere for application of
frontier sciences in varietal development and for enhanced
investment in related R&D.
Irrigation
The government of India has taken up irrigation potential creation
through public funding and assisting farmers to create potential on
their own farms. Substantial irrigation potential has been created
through major and medium irrigation schemes.The total irrigation
potential in the country has increased from 81.1 million hectares in
1991-92 to 102.08 million hectares up to the end of the Tenth Five
Year Plan (2006-07). Of the total potential created, however, only
87.2 million hectares is actually utilized. The Working Group on
Water Resources for the Eleventh Five Year Plan (2007-12) has
proposed creation of irrigation potential of 16 million hectares (9
million hectares from MMI sector and 7 million hectares from MI
sector) during the Eleventh Five Year Plan period.
The Central government has also initiated the Accelerated
Irrigation Benefit Programme (AIBP) from 1996-97 for extending
assistance for the completion of irrigation schemes remaining
incomplete. Under the programme the project approved by the
Planning Commission are eligible for assistance. In 2008-09, Rs.
2,791 crore was released to AIBP for major and medium irrigation
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schemes up to December 2008.
Fertilizers
Chemical fertilizers have played a significant role in the
development of the agricultural sector. The per hectare
consumption of fertilizers in nutrient terms stood at 117.07 kg in
2007-08. However, recent trends in agricultural productivity show
a decline in marginal productivity of soil in relation to the
application of fertilizers and in some cases has also become
negative. Some of the evident factors contributing to the decline in
marginal productivity are: skewed NPK application ratio in the
country, comparatively higher application of straight fertilizers like
urea, DAP and MOP as against the complex fertilizers (NPKs)
which are considered to be ergonomically better and more
balanced fertilizer products. Lack of application of proper nutrients
based on soil analysis has also contributed to slowdown in growth
of productivity.
The domestic production of urea in the year 2008-09 was 199.22
lakh tonnes, as compared to 187.27 lakh tonnes in 2002-03,
whereas that of DAP declined in 2008-09 to 29.33 lakh tonnes,
after reaching a peak of 52.36 lakh tonnes in 2002-03, mainly
because of shift from DAP production to complex fertilizer
production.
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Availability of raw material/intermediates has also been a major
bottleneck towards increase in production. There is no domestic
production of MOP and its requirement is met fully by import.
The government has taken various policy initiatives for the
fertilizer sector. These cover pricing policy for indigenous urea,
new investments in urea sector, nutrient-based pricing, production
and availability of fortified and coated fertilizers, uniform freight
subsidy on all fertilizers under the fertilizer subsidy regime,
concession scheme for decontrolled phosphate and potassic
fertilizers, inclusion of Mono Ammonium Phosphate (MAP), Tri
Super Phosphate (TSP) and Ammonium Sulphate (AS) in the
concession scheme, revised scheme for concession for Single
Super Phosphate (SSP) based on inputs cost and a uniform all-
India maximum retail price of Rs. 3,400 per tonne for SSP, policy
for conversion of FO/LSHS urea units to natural gas.
National Food Security Mission
The National Food Security Mission (NFSM) is being
implemented in 312 identified districts of 17 States of the
country. The NFSM-Rice is being implemented in 136 districts of
14 States i.e. Andhra Pradesh, Assam, Bihar, Chhattisgarh,
Gujarat, Jharkhand, Karnataka, Kerala, Madhya Pradesh,
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Maharashtra, Orissa, Tamil Nadu, Uttar Pradesh and West Bengal.
The interventions covered under NFSM-Rice include
demonstrations on improved practices; system of rice
intensification; promotion of hybrid rice-production and
distribution; distribution of HYV seeds; seed mini-kits; micro-
nutrients; liming; conoweeders; zero till seed drills; multi-crop
planters; seed drills; rotator’s, diesel pump sets, power weeders,
knap sack sprayers; plant protection chemicals and bio-pesticides;
farmers’ field schools; local initiatives; award for best performing
districts; mass media campaign; international exposures for
technical knowledge enrichment and project management
team. NFSM-Wheat is being implemented in 141 districts of 9
State—Bihar, Gujarat, Haryana, Madhya Pradesh, Maharashtra,
Punjab, Rajasthan, Uttar Pradesh and West Bengal.
The Rashtriya Krishi Vikas Yojana
Under the Scheme of RKVY, the following indicative broad
activities have been identified for focused attention–Integrated
Development of Food Crops, including coarse cereals, minor
millets and pulses; agriculture mechanization; soil health and
productivity; development of rain-fed farming systems; integrated
pest management; market infrastructure; horticulture; animal
husbandry, dairying and fisheries; Concept to completion projects
that have definite timelines; support to institutions that promote
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agriculture and horticulture, etc.; organic and bio-fertilizers; and
innovative schemes. During 2007-08, an outlay of Rs. 1,500 crore
was approved of which an amount of Rs. 1,246.89 crore, including
Rs. 48 crore at Rs. 10 lakh per district for preparation of District
Agriculture Plan (DAP), was released to the States. For the year
2008-09, an outlay of Rs. 2,891.70 crore has been provided at
revised estimate (RE) stage and an amount of Rs. 2,886.80 crore
has been released to the eligible States as on March 31, 2009.
Information Availability
Timely availability of reliable information on agricultural output is
of great significance for planning and policy making. The existing
system of agricultural statistics, in spite of established procedures
and wide coverage, has inherent limitations in the matter of
providing an objective assessment of crops at the pre-harvesting
stages, with the desired spatial details which are essential to
identify problem areas and the nature of required interventions in
terms of spatial, temporal and qualitative inferences. Capabilities
of the existing system of crop forecasts and crop estimation can be
enhanced with the introduction of technological advancements and
the adoption of emerging methodologies. In turn, an efficient and
sound information mechanism can assist considerably in the
management of concerns in areas such as food security, price
stability, international trade, etc. Remote Sensing (RS),
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Information and Communication Technology (ICT) and
Geographic Information System (GIS)can be used towards this
end. Schemes/projects like Forecasting Agricultural Output using
Space, Agro-meteorology and Land-based Observations (FASAL)
and Extended Range Forecasting System (ERFS) have been
initiated to establish a more scientific and reliable basis for
forecasting.
In 1987, the Department of Agriculture and Cooperation (DAC)
sponsored a project called “Crop Acreage and Production
Estimates (CAPE)” with the objective of developing
methodologies using the RS techniques for crop area and
production forecasting. The project was implemented through the
Space Applications Centre (SAC), Ahmedabad and provided a
platform for development and standardization of basic procedures,
models and software packages for crop area and production
forecasting, using remote sensing and weather data. The concept of
FASAL seeks to strengthen the current capabilities of early and in-
season crop estimation capabilities from econometric and weather-
based techniques with remote sensing applications.
Keeping in view the expertise needed, some of the functions under
the scheme have been outsourced. For example, forecasting of area
and production of major crops using Remote Sensing technology is
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being handled by SAC, and forecast of production based on
econometric modelling is being done by the Institute of Economic
Growth (IEG), New Delhi. The activities relating to forecast of
production based on crop growth and yield modelling by making
use of the agro-met data has been assigned to the India
Meteorological Department (IMD). All other functions, including
coordination with various groups are being performed by the
National Crop Forecasting Centre (NCFC) in the Ministry of
Agriculture. Experimental forecasts based on econometric models
and forecast based on RS technology for specific crops have
commenced.
Agriculture Insurance
The frequency and severity of droughts, floods and cyclones and
rising temperatures, agro-climatic variations and erratic rainfall
accentuates uncertainty and risk in the agricultural sector leading
to huge losses in agricultural production and the livestock
population in India.
The National Insurance Scheme (NAIS) for crops has been
implemented from rabi 1999-2000 season. Under the scheme and
until rabi 2007-08, an area of 184 million hectares of about 1,155
lakh farmers have been covered and a sum of Rs. 1,21,606 crore
insured. Claims to the tune of about Rs. 11,607 crore have been
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reported against premium income of about Rs. 3,626 crore,
benefitting 302 lakh families.
Under the Weather Based Crop Insurance Scheme (WBCIS) being
implemented by the Agriculture Insurance Company of India Ltd.
(AIC), 10 States have been covered on pilot basis during the kharif
2008 season. About 1.4 lakh farmers with 1.87 lakh hectares of
cropped area were insured for a sum of Rs. 309 crore generating a
premium of Rs. 31.5 crore (including subsidy, farmers’ share of
premium is Rs. 11.82 crore). This pilot is being continued in rabi
2008-09. In addition to AIC, private insurers like ICICI-
LOMBARD General Insurance Company and IFFCO-TOKIO
General Insurance Company have also been included for
implementation of the scheme in selected areas.
National Policy for Farmers, 2007
Major policy provisions of the National Policy for Farmers, 2007,
include provisions for asset reforms, water use efficiency, use of
technology, inputs and services like soil health: good quality seeds,
disease free planting material, support services for women, credit,
insurance etc. Provisions have also been made for National
Agricultural Bio-security System, setting up of farm schools in the
fields of outstanding farmers to promote farmer to farmer learning
and to strengthen extension services and expanding food security
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basket to include nutritious crops like bajra, jowar, ragi and
millets, which are mostly grown in dry land areas. A
comprehensive National Social Security Scheme for the farmers
for ensuring livelihood security, by taking care of insurance needs
on account of illness, old age, is included.
Food Management
Food management in India has three basic objectives
viz. procurement of food-grains from farmers at remunerative
prices, distribution of food-grains to the consumers particularly the
vulnerable sections of the society at affordable prices and
maintenance of food buffers for food security and price stability.
The instruments for food management are the Minimum Support
Price (MSP) and Central Issue Price (CIP). The focus is on
incentivizing farmers by ensuring fair value for their produce
through the Minimum Support Price mechanism, distribution of
food-grains at subsidized rates to 6.52 crore BPL families,
covering all households at the risk of hunger under Antyodaya
Anna Yojana (AAY), establishing grain banks in chronically food-
scarce areas and strengthening the Public Distribution System
(PDS). The nodal agency which undertakes procurement,
distribution and storage of food-grains is the Food Corporation of
India (FCI). Procurement at MSP is open-ended, while distribution
is governed by the scale of allocation and its off-take by the
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beneficiaries.
Challenges and Outlook
The agriculture sector faces challenges on various fronts. On the
supply side, the yield of most crops has not improved significantly
and in some cases fluctuated downwards. The scope for increase in
the net sown area is limited and farm size has been shrinking. In
the case of certain crops like sugarcane, extreme variability in the
acreage and production over the years has been a matter of
concern. On the other hand, in the case of pulses, production has
just not kept pace with the requirement leading to a rise in prices
given that its availability in the international markets is limited.
Therefore, there is clearly a need for a renewed focus on improving
productivity, and at the same time, to step up the growth of allied
activities and non-farm activities that can help improve value
addition. The current focus on developing rural infrastructure,
particularly rural roads, needs to be maintained as it would go a
long way in providing connectivity that is essential for movement
of agricultural produce. The irrigation sector requires a renewed
thrust, both in terms of investment as also modern management.
There is considerable scope for development of micro-irrigation
systems and watersheds and in the use of a participatory approach
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for achieving the same.
There is also a need to narrow the gap between producer prices and
consumer prices through proper marketing support. The
development of marketing infrastructure and storage and
warehousing and cold chains and spot markets that are driven by
modern technology will go a long way in addressing this need.
As per the Report of the Committee on Financial
Inclusion (January 2008), more than 73 per cent of farmer
households have no access to formal sources of credit. Innovative
institutional mechanisms that provide credit and financial products
(including insurance products) specifically designed to meet the
needs of the farm sector, keeping their risk-bearing ability in view,
is the need of the hour.
The rural economy needs to be viewed as comprising of a
continuum of interrelated economic activities. Farming needs to be
dovetailed with viable off-farm and non-farm activities. Farmers
need to be facilitated to take up value addition such as processing
of agricultural produce, horticulture, pisciculture, poultry, and
development of non-farm rural enterprises.
On the distribution side, there is need to ensure that benefits accrue
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to the targeted population. A mission approach for promotion of
smart cards and its cross reference with ration cards and voter ID
cards would help better targeting, lesser leakages and easier
administration.
An area that requires focused attention is the issue of sustainability
of agriculture with due emphasis on environmental concerns. Soil
erosion, water logging, reduction in ground-water table and the
decline in the surface irrigation are the problems faced by
agriculture. The consequences of climate change on Indian
agriculture also need to be factored in the strategy for the
development of this sector.
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5. Schemes of Nationalized Banks related to
Agriculture:-
Allahabad Bank - Offers the Kisan Credit Card and Kisan Shakti
Yojana Scheme. The Kisan Credit Card (External website that
opens in a new window)offers the Kisan Credit Card and Kisan
Shakti Yojana Scheme. The Kisan Credit Card is a unique scheme
for farmers through which they can draw a cash loan for crop
production as well as domestic needs from the card-issuing branch
within the sanctioned limit. The Kisan Shakti Yojana provides
farm investment credit, as well as personal/domestic loans
including repayment of debt to moneylenders. The permissible
loan limit will be 50 per cent of the value of land or 5 times the net
farm income, whichever is lower, less the outstanding amount, if
any, in Agril.
Andhra Bank - provides facilities to farmers like AB Kisan Vikas
Card, AB Pattabhi Agricard, AB Kisan Chakra, rural godowns,
agri clinics, agri service centres, self-help groups and solar
cookers. They also provide other schemes such as Kisan Sampathi,
tractor financing, Kisan Green Card, Surya Sakhti and loans to
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dairy agents.
Bank of Baroda - Offers farmers the Baroda Kisan Credit Card. It
also has schemes for the purchase of agricultural implements,
heavy agricultural machinery like tractors, irrigation and other
infrastructure. Bank of Baroda also finances the development of
agri industries like horticulture, sericulture, fisheries, dairy and
poultry.
Bank of India - Has a Kisan Credit Card Scheme that helps
farmers raise short-term funds for agriculture and other farm-based
activities, on an on-going basis, with very flexible and friendly
repayment terms. It also offers an agricultural loan for
development of agriculture related industries, purchase of
machinery and other agricultural purposes.
Bank of Maharashtra - Offers agriculturists a Mahabank Kisan
Credit Card and financial schemes for digging new wells,
purchasing harvesters, livestock, vehicles and land. Repayment
terms for different agricultural loans range from three to fifteen
years.
Canara Bank - provides Kisan Credit Cards. Limits up to 50,000
have no margin while those above 50,000 have a margin of 15 to
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20 percent. Other than this, Canara Bank provides a wide array of
financial schemes for different agricultural purposes.
Central Bank of India - The Central Kisan Credit Card is a credit
service provided to farmers on the basis of their holdings for
purchasing agricultural inputs. Only those farmers having a good
track record for the past 2 years with the bank as a borrower or
depositor and who are not defaulters to any credit institution would
be considered for loans.
Corporation Bank - Offers a range of loan schemes to farmers.
They are the Corp Gram Mitra Yojana, Corp Arthias Loan Yojana,
Corp Kisan Tie-Up Loan Scheme, Corp Kisan Farm
Mechanisation Scheme and Corp Kisan Vehicle Loan Yojna.
Dena Bank - Dena Bank has sponsored 2 Regional Rural Banks
namely Dena Gujarat Gramin Bank in Gujarat and Durg
Rajnandgaon Gramin Bank (DRGB) in Chhattisgarh. The bank has
set up a Rural Development Foundation for training unemployed
youth in rural areas. Other financial schemes of the bank are the
Dena Swacch Gram Yojana, Dena Kisan Gold Credit Card Scheme
and the Dena Bhumiheen Kisan Credit Card Scheme.
Indian Bank - A wide range of schemes for agriculturalists such
as Swarojgar Credit Card, Gramin Mahila Sowbhagya Scheme,
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Kisan Bike Loan Scheme, Yuva Kisan Vidya Nidhi Yojana and
Indian Bank Kisan Card Scheme.
Indian Overseas Bank - Offers agri business consultancy services
that include conducting feasibility and market studies, preparation
of detailed project reports and formulation of rehabilitation
packages for sick agro units.
Oriental Bank of Commerce - It has two agricultural projects -
the Grameen Project and the Comprehensive Village Development
Programme. The Grameen Project involves disbursing small loans
ranging from Rs.75 onwards to mostly women. Training is also
provided in villages in using locally available raw material to
produce pickles and jams. The Comprehensive Village
Development Programme focuses on providing an integrated
package of rural finance to villagers to build up their village.
Punjab and Sind Bank - Offers a range of financial schemes for
farmers like the Zimidara Credit Card, tractor finance scheme, drip
irrigation scheme, Kheti Udyog Khazana Yojana, vermi
composting scheme, horticulture clinic and private veterinary
clinic with dairy unit scheme.
Punjab National Bank - This bank has a special website
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called PNB Krishie for agriculturalists. It gives details on crop
practices, plant protection, farm machinery, market prices and
other farming news and activities. The website also provides a list
of financial schemes offered by Punjab National Bank on
production credit, investment credit, composite loans, animal
husbandry and farm mechanization.
Syndicate Bank - Offers a wide range of agricultural loan
products such as the Synd Jai Kisan Loan Scheme, Jewel Loan
Scheme for Agriculture, Syndicate Farm House Scheme, Finance
for Hi-tech Agriculture, Development of Irrigation Infrastructure
scheme, Syndicate 2/3/4 Wheelers Scheme and the Syndicate
Kisan Credit Card (S.K.C.C).
UCO Bank - This Bank provides the UCO Hirak Jayanti Krishi
Yojana to meet the long-term credit needs of the farming
community in rural areas for agriculture, allied activities as well as
for personal purposes. Only farmers below 60 years are eligible to
apply. Minimum quantum of the loan is Rs.25,000/- and the
maximum is Rs.5 lakhs.
Union Bank of India - Facilities provided to farmers include
Kisan ATM Cards and special Kisan ATM Machines. These
ATM's are easy to operate and do not require farmers to have a
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high level of literacy. They are voice enabled in the local language,
have a touch screen monitor and work on a bio-metric
authentication system like finger print verification.
United Bank of India - The range of financial schemes offered to
agriculturalists include the United Krishi Laghu Paribahan Yojana,
United Krishi Sahayak Yojana, United Gramyashree Yojana,
Gramin Bhandaran Yojana and the United Bhumiheen Kisan
Credit Card.
Vijaya Bank - This bank offers one comprehensive financial
scheme known as the Vijaya Krishi Vikas (VKV) Scheme. This
scheme provides a simple package to farmers to meet entire
agricultural credit requirements such as crop production,
investment credit and consumption credit. All farmers including
owners, tenant cultivators, leased land farmers and sharecroppers
are eligible for this scheme.
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6. Schemes of Cooperative Agricultural Banks
National Bank for Agriculture and Rural Development or
NABARD – This bank is responsible for refinance disbursement to
commercial banks, State cooperative banks, State cooperatives,
rural development banks, Regional Rural Banks (RRBs) and other
eligible financial institutions. It also sanctions money through its
Rural Infrastructure Development Fund for projects covering
irrigation, rural roads and bridges, health and education, soil
conservation and drinking water schemes. NABARD also offers a
Kisan Credit Card Scheme and crop loans under the Rashtriya
Krishi Bima Yojana.
Banks and RRB's introduced the Kisan Credit Card Scheme of
NABARD in their areas of operation. In this scheme eligible
farmers are provided with a Kisan Credit Card and a passbook or
card-cum-pass book. The revolving cash credit facility allows any
number of withdrawals and repayments within the limit. This limit
is fixed on the basis of operational land holding, cropping pattern
and the scale of finance. Sub-limits may be fixed at the discretion
of banks.
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This Kisan Credit Card is valid for 3 years subject to annual
review. As incentive for good performance, credit limits may be
enhanced to take care of increase in costs, change in cropping
pattern, etc. Each drawl should be repaid within a maximum period
of 12 months. Conversion or rescheduling of loans is allowed in
case of damage to crops due to natural calamities. Security,
margin, rate of interest and other details are fixed according to RBI
norms.
Bihar State Co-operative Bank Limited (BSCB) - Offers a
range of loans and financial schemes to agriculturalists.
Haryana State Co-operative Apex Bank Limited
(HARCOBANK)- The bank offers crop loans, Kisan Credit
Cards, cash credit against hypothecation of stocks and interim
finance by way of cash credit.
National Federation of State Co-operative Banks Limited
(NAFSCOB) - This federation offers a range of agricultural loans
through Member State Cooperative Banks, District Central
Cooperative Banks and Primary Agricultural Cooperative
Societies.
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Orissa State Co-operative Bank Limited (OSCB) - The bank has
introduced Kisan Credit Cards in the S.T. Cooperative Credit
Sector. It also organizes seminars on agri finance. OSCB has 17
Central Cooperative Banks and around 810 mini banks in different
districts of Orissa.
Repatriates Co-operative Finance and Development Bank
Limited - This bank does not have any specific agricultural loan,
but offers a range of financial products that can be accessed by
people who wish to develop agriculture and related activities.
Punjab State Cooperative Agriculture Development Bank
Ltd - Initially, the bank only gave farmers loans to pay off old
debts and purchase land. Today, the bank provides loans for
various purposes like improvement of alkaline and saline lands,
purchase of tractors, installing tube wells and other modern
agricultural equipment. It also offers financial schemes for poultry
development, dairy development, horticulture, floriculture, sheep
rearing and inland fisheries.
Andhra Pradesh State Cooperative Bank Limited (APCOB) -
has a loan portfolio that covers crop loans, medium term loans and
long term loans for agricultural purposes. It also supports
government sponsored District Rural Development Agency
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projects through IRDP loans and cooperative sugar factories,
spinning mills, weaver's societies, employees' cooperative credit
societies and other organizations. APCOB has also extended
finance to apex cooperative institutions in the State such as APCO,
MARKFED and GCC.
7. Schemes related to central ministries
Central
• National Bio-Science awards for career development
• Agricultural Census
• Jute Technology Mission
• Technology Mission on Cotton (Mini Mission III & IV)
• Rashtriya Krishi Vikas Yojana (RKVY)
• National Project for Cattle and Buffalo Breeding (NPCBB)
• Schemes of Department of Animal Husbandry, Dairying &
Fisheries
• Livestock Insurance Scheme
• Assistance to States for Feed and Fodder Development
• Scheme on Development of Inland Fisheries and
Aquaculture
• Scheme on Development of Marine Fisheries, Infrastructure
and Postharvest Operations
• National Scheme on Welfare of Fishermen
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• Scheme on Fisheries Training and Extension
• Scheme on Strengthening of Database and Information
Networking for the Fisheries Sector
• Horticulture Promotion Service
• Market Information Services for Horticulture Crops
• Technology Development and Transfer for Promotion of
Horticulture
• Development of Commercial Horticulture through
Production and Post-Harvest Management
• Schemes by National Horticulture Board (NHB)
• Dairy/Poultry Venture Capital Fund
• Scheme on Livestock Health
• Small Farmer's Agri-Business Consortium
• National Project for Cattle and Buffalo Breeding (NPCBB)
• Centrally Sponsored Fodder Development Scheme
• Integrated Sample Survey Scheme for Estimation of Major
Livestock Products
• National Programme for Prevention of Animal Diseases
• Central Cattle Breeding Farms
• Central Minikit Testing Programme on Fodder Crops
• Central Poultry Development Organisation
• Central Herd Registration Scheme
• Strengthening infrastructure for quality & clean milk
production
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• Assistance to Cooperatives
• Centrally Sponsored Scheme on Fisheries Training And
Extension
• Financing Purchase of Land for Agricultural Purposes
• National Agricultural Insurance Scheme (NAIS)
• Minikit Programme for Rice, Wheat & Coarse Cereals
• Gramin Bhandaran Yojna
• Development/Strengthening of Agricultural Marketing
Infrastructure, Grading and Standardization
• Strengthening Infrastructure for Quality & Clean Milk
Production
• Livestock Health and Disease Control
• National Horticulture Mission
• National Bamboo Mission
• Central Sector Scheme of Soil Conservation Training
Centre, Damodar Valley
• Central Assistance to State Plan Scheme on Watershed
Development
• Poppy Insurance
• Seb Bima Yojana (Apple Insurance)
• Draksha Bima(Grape Insurance)
• Pulp wood Tree Insurance
• Rubber Plantation Insurance
• Capacity Building to enhance Competitiveness of Indian
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Agriculture and Registration of Organic Produ
• Promotion of Integrated Pest Management
• Promotion and Strengthening of Agricultural Mechanization
through Training, Testing & Demonstration
• Livestock Insurance Scheme
8. Schemes related to state departments
State Schemes
Himachal Pradesh
• Flood Protection Works
• Command Area Development Programme
● Quality Seed Multiplication and Distribution
● Crop Improvement Programme
• Rashtriya Krishi Bima Yojna
• Rural Infrastructure Development Fund (RIDF)
• Prime Minister Rozgar Yojana (PMRY)
• Entrepreneurial Development of Women Farmers
• Development of Beekeeping
• Establishment of Tissue/Leaf Analysis Laboratory
• Establishment of Plant Health Clinic • Incentive to Farmers •
MT Non-Agricultural Loan Scheme
• Society Agriculture Loan Scheme
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• MT Agriculture Loan Scheme
• Rural Development through Diversification in Agriculture
● Self-Reliance through Sericulture and Dairy Development
● Kisan Credit Card Scheme
• Subsidy on Horticulture Production Inputs to Small Farmers
● General Loan Scheme
● Him Swalamban Yojna-Loan Scheme for SC/ST Persons for
Starting
● Transport, Service, Agricutlure Secto
Manipur
• Macro Management Mode of Agriculture
• Oilseed Production Programme
• National Pulse Development Programme
• Accelerated Maize Development Programme(AMDP)
● Pradhan Mantri Gram Sadak Yojana (PMGSY)
• Integrated Cereal Development Programme (ICDP)-Rice
• Sustainable development on sugarcane base croppin
system(SUBACS)
• Strengthening of Existing Laboratory
• Farm Mechanization
• Rodent Control
• Integrated Pest Management
• Reclamation of water logged lands
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• Promotion of Green Manure Crops
• Agriculture Technology Management Agency (ATMA)
• Assistance to Agricultural Coops.
• Modernization of Agricultural farms
• Procurement and Distribution of seed
• Strengthening of Agriculture Extension & Administration
• Procurement and Distribution of PP chemical &Rural &
Urban Compost
• Pest Surveillance and Management
• Fibre crop development Programme including ramie and
kouna cultivation
• Strengthening of Agricultural Information Unit
• Crop Statistics
• Pulps Development Programme
• Development of Kharungpat, Foot Hills and Shallow Lack
Area
• Oilseeds production Programme
• Regional Pulses Dev. Farm
• Popularisation of Multiple cropping
● Development of Organic Farming for sustainable agriculture
● Watershed Development Project in Shifting Cultivation
areas
● Assistance to Small & Marginal Farmers for Increasing
Agricultural production
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Goa
• Development of Agricultural Extension
• Development of Manure Scheme • Soil and Water
Conservations Scheme
• National Horticulture Mission Scheme
• Crop Production and Input Management Scheme
• Cultivation of Red Oil Palm (ISOPOM) Scheme
• Agricultural Research & Education
Gujarat
• Scheme for Integrated Horticulture Development
Programmes
Haryana
• Scheme for Agriculture Engineering and Services
• Soil Conservation
• Sustainable Development of Sugarcane Based Cropping
System (SUBACS) Macro Management Of Agriculture
• Financial Assistance to Panchayats and Panchayat Samitis
Orissa
• Sugarcane Development Scheme
• Balance and Integrated use of Fertiliser Scheme
• Farm Mechanization Scheme
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• Indo-Danish Comprehensive Watershed Development
Scheme
• Integrated Wasteland Development Project (IWDP)
• Drought Prone Area Programme • Component Wise
Operational Guideline for ISOPOM
● Integrated Scheme of Oilseeds,Pulses & Maize •
Integrated Rural Energy Planning, IREP
• National Horticulture Mission • Pradhan Mantri Gram Sadak
Yojna, PMGSY
• Orissa Tribal Empowerment and Livelihood
Programme(OTELP)
• Scheme for Homesteadless Families - Project Vasundhara •
Watershed Development Programme • Rashtriya
Krishi Vikas Yojana
• National Project on Management of Soil Health and Fertility
• National Food Security Mission • Command Area
Development & Water Management ( CADWM)
• Scheme for Pani Panchayat • Scheme on Organic Farming
• Rastriya Sam Vikas Yojana
Tamil Nadu
• Tamil Nadu Women Development Project • Land Purchase
Scheme for Scheduled Caste/Tribe Women
• Integrated Horticulture Development Scheme
• Tamil Nadu Agricultural Labourers - Farmers (Social
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Security and Welfare) Scheme, 2006
• Schemes under Tamil Nadu Watershed Development
Agency (TAWDEVA)
Chhattisgarh
• Chatragrih Yojna
• Book Bank Yojna
Maharashtra
• Tree Planting on Community Lands in Identified
Watersheds
• Western Ghat Development Programme
• NABARD-WDF Assisted Watershed Development
Programme
• River Valley Project
• Gram Sachivalaya Yojana (GSY)
Puducherry
• Schemes for Agricultural Workers Welfare Society •
Key Village Scheme
Tripura
• Somporna Gramin Rozgar Yojana (SGRY)
Madhya Pradesh
• Krashak Mitra Yojna • Sooraj-Dhara Yojna
• Bhoo-Jal Samwardhan Yojna
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• Rashtriya Jalgrahan Kshetra Vikas Karykram
• Rashtriya Krishi Beema Yojna
• Ponds Construction Scheme for Irrigation
• Rashtiya Biogas Vikas Yojna
• Balram Taal Construction Scheme
• Annapurna Yojna
• Saghan Kapas Vikas
• Isopam Yojna
• Sugarcane Development Scheme
• Unified Grains Development
• Rashtriya Krishi Beema Yojna
• Minor Irrigation Scheme
• Amalgamated Special Fund (ASF) Schemes • Laghu
Sinchai Yojnantargat Nalkoop Khanan Yojna
• Micro Management of Agriculture • River Bank/ Flood
Water conservation Scheme
Punjab
• Subsidy on Ridomil/Hybrid seeds/ Demonstration plots •
Prime Minister's Rozgar Yojana(PMRY) • Kanaya Jagriti
Jyoti Scheme
• Training Infrastructure in Dairying for Rural Dairy Farmers
• Farmer's Welfare Scheme
• Rashtriya Krishi Vikas Yojana (RKVY) • Mai Bhago Istri
Shakti Scheme
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Andaman and Nicobar Island
• Supply of inboard/outboard engines at 50 per cent subsidy
• Fodder Development Programme
Rajasthan
• Doctor Ka Apna Clinic Scheme, 2008
Meghalaya
• Sampoorna Grameen Rozgar Yojana (SGRY)
Karnataka
• Pledge Loan Scheme
Jammu and Kashmir
• Agriculture Export Zones
• Technology Mission for Post-Harvest Management,
marketing and exports
Kerala
• Scheme for Strengthening of Agricultural Extension
• Rashtriya Krishi Vikas Yojana (RKVY)
• Commodity Safety Net Scheme
• Development of Vegetable Cultivation in Villages
• Crop Insurance Scheme
• Scheme for Integrated Development of Coconut Holdings in
the State
• Sustainable Development of Rice Based Farming System
• Schemes for Integrated Pest Management System
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• Modernisation of Agricultural Farms under the Department
of Agriculture
• Technology Transfer • Scheme for Soil and Water
Conservation on Watershed
• National Agricultural Insurance Scheme (NAIS) • Scheme
to Expand Information Services for Farm
● Information and Communication in the State
• Integrated Development of Scampi/Fish Farming • Small
Farm Mechanization
Mizoram
• National Agricultural Insurance Scheme
• Farm Mechanization
Andhra Pradesh
• Seed Village Scheme
• Rashtriya Krishi Vikas Yojana
• Economic Assistance (Bankable Scheme)
• Scheme of Development of Primitive Tribal Groups •
National Horticulture Mission
● Polambadi
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9. Regional rural banks:-
REGIONAL RURAL BANKS ACT 1976
THE REGIONAL RURAL BANKS ACT, 1976
ACT NO. 21 OF 1976
[9th February, 1976.]
An Act to provide for the incorporation, regulation and winding up
of Regional Rural Banks with a view to developing the rural
economy by providing, for the purpose of development of
agriculture, trade, commerce, industry and other productive
activities in the rural areas, credit and other facilities, particularly
to the small and marginal farmers, agricultural laborers, artisans
and small entrepreneurs, and for matters connected therewith and
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incidental thereto.
Short title, extent and commencement.
1. Short title, extent and commencement.
(1) This Act may be called the Regional Rural Banks Act, 1976.
(2) It extends to the whole of India.
(3) It shall be deemed to have come into force on the 26th day of
September, 1975.
Establishment and incorporation of Regional Rural Banks.-
(1) The Central Government may, if requested so to do by a
Sponsor Bank, by notification in the Official Gazette, establish in a
State or Union territory, one
or more Regional Rural Banks with such name as may be specified
in the notification and may, by the said or subsequent notification,
specify the local limits within which each Regional Rural Bank
shall operate.
(2) Every Regional Rural Bank shall be a body corporate with
perpetual succession and a common seal with power, subject to the
provisions of this Act, to acquire, hold and dispose of property and
to contract and may
sue and be sued in its name.
(3) It shall be the duty of the Sponsor Bank to aid and assist the
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Regional Rural Bank, sponsored by it, by--
(a) subscribing to the share capital of such Regional Rural Bank;
(b) training personnel of such Regional Rural Bank
(c) providing such managerial and financial assistance to such
Regional Rural Bank during the first five years of its functioning,
as may be mutually agreed upon between the Sponsor Bank and
the
Regional Rural Bank: Provided that the Central Government may,
either on its own motion or on the recommendation of the National
Bank, extend the said period of five years by such further period,
not
exceeding five years at a time, subject to such conditions as it may
deem fit to impose.
(4). Offices and agencies.-
(a) A Regional Rural Bank shall have its head office at such place
in the notified area as the Central Government may, after
consultation with the [National Bank] and the Sponsor Bank,
specify
by notification in the Official Gazette.
(b) A Regional Rural Bank may, if it is of opinion that it is
necessary so to do, establish its branches or agencies at any place
in the notified area.
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(5). Authorised capital.- The authorised capital of each Regional
Rural Bank shall be 2*[five crores of rupees dividend into five
lakhs] of fully paid-up shares of one hundred rupees each:
Provided that the Central Government may, after consultation with
the [National Bank] 2* and the Sponsor Bank, increase or reduce
such authorised capital; so, however, that the authorised capital
shall not be reduced below twentyfive lakhs of rupees, and the
shares shall be, in all cases, fully paid-up shares of one hundred
rupees each.
Issued capital.
(6). Issued capital.- The issued capital of each Regional Rural
Bank shall, in the first instance, be such as may be fixed by the
Central Government in this behalf, but it shall in no case be less
than twenty-five lakhs of rupees or exceed one crore of rupees.] Of
the capital issued by a Regional Rural Bank under subsection, fifty
per cent. shall be subscribed by the Central Government; fifteen
per cent. by the concerned State Government and thirty-five per
cent. by the Sponsor Bank. The Board may, after consultation with
the 5*[National Bank] concerned State Government and the
Sponsor Bank and with the prior approval of the Central
Government, from time to time, increase the issued capital of the
Regional Rural Bank; and, where additional capital is issued, such
capital shall also be subscribed in the same proportion as is
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specified in sub-section. Shares to be approved securities.
(7). Shares to be approved securities.- Not withstanding anything
contained in the Acts hereinafter mentioned in this section, the
shares of a Regional Rural Bank shall be deemed to be included
among the securities enumerated in section 20 of the Indian Trusts
Act, 1882 (2 of 1882), and shall also be deemed
(8). Management.-
(a) Subject to the provisions of this Act, the general
superintendence, direction and management of the affairs and
business of a Regional Rural Bank shall vest in a Board of
directors who may exercise all the powers and discharge all the
functions which may be exercised or discharged by the
Regional Rural Bank.
(b) In discharging its functions, the Board shall act on business
principles and shall have due regard to public interest.
(9). Board of directors.-
(a) The Board of directors shall consist of the Chairman appointed
under sub-section (1) of section 11, and the following other
members, namely:--
a.two directors, who are not officers of the Central Government,
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State Government, Reserve Bank, National Bank, Sponsor Bank or
any other bank, to be nominated by the Central Government;
( b). one director, who is an officer of the Reserve Bank, to be
nominated by that Bank;
(c).one director, who is an officer of the National Bank, to be
nominated by that Bank;
(d). two directors, who are officers of the Sponsor Bank, to be
nominated by that Bank; and
(e) two directors, who are officers of the concerned State
Government, to be nominated by that Government.]
BUSINESS OF A REGIONAL RURAL BANK BUSINESS OF
A REGIONAL RURAL BANK
Business which a Regional Rural Bank may transact. Business
which a Regional Rural Bank may transact.-
(1) Every Regional Rural Bank shall carry on and transact the
business of banking as defined in clause (b) of section 5 of the
Banking Regulation Act, 1949 (10 of 1949), and may engage in
one or more forms of business specified in sub-section (1) of
section 6 of that Act.
(2) Without prejudice to the generality of the provisions of
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subsection
every Regional Rural Bank may, in particular, undertake the
following types of business, namely:--
(a) the granting of loans and advances, particularly to small and
marginal farmers and agricultural labourers,
1. Ins. by Act 1 of 1988, s. 11 (w.e.f. 28-9-1988).
2. Certain words omitted by s. 11, ibid. (w.e.f. 28-9-1988). 271
whether individually or in groups, and to cooperative societies,
including agricultural marketing societies, agricultural processing
societies, co-operative
farming societies, primary agricultural credit societies or farmers'
service societies, for agricultural purposes or agricultural
operations or for other purposes connected therewith;
(b) the granting of loans and advances,
particularly to artisans, small entrepreneurs and persons of small
means engaged in trade, commerce or
industry or other productive activities, within the notified area in
relation to the Regional Rural Bank. CHAP
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10.Conclusion
Banks in India are hopeful to meet their farm sector lending targets
of 18% in the current financial year 2010-2011. They are now
thoroughly focusing on the disbursement of funds to agricultural
sector, in order to achieve the credit target mandated by Reserve
Bank of India.
The 'Trend and Progress Report of 2010' published by the Reserve
Bank of India (RBI), says that a host of public and private banks
failed to disburse the mandated 18% of their net bank credit to
agriculture. As part of agricultural lending, banks are expected to
lend 13.5% of net bank credit directly for agriculture, whereas
4.5% may be allotted to related activities.
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Leading newspaper Business Standard quoted S Chakrabarthy,
Deputy Managing Director, Axis Bank, saying that they had 60
rural branches last year and would take it to 125 by next month this
year. He expects that this will give a major fillip to the agri lending
business.
While, Saurabh Bhat, Group Executive Vice President,
Development Banking, Yes Bank, said that they had recently
started a program for small and middle-level farmers to finance
them so that they could keep their commodities in warehouses. He
informed that they have already done a few disbursements. They
have 24 rural and 47 semi-urban branches.
Nationalisation of banks was a major step for channelising credit to
various sectors ofeconomy of which agriculture is a major sector.
A dynamic and growing agricultural sectorneeds adequate finance
through banks to accelerate the overall growth. The government
has directed the banks to double their flow of credit
to agriculture sector in three years commencing from the year
2004-05. With the government’s keen interest and special budget
allocation for agricultural in the 11th five-year plan, it is
now in the hands of the farmer to reap the benefit of the
schemes offered by the banks.
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11. BIBLIOGRAPHY
● www.nabard.com
● Www.rbi.org.in
● www.google.com
● www.business.mapsofindia.com
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