5th Sem Project

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.

T.Y.B.com (Banking and Insurance)2011-2012 1

1Bcom Banking and Insurance



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





Basu

Internal Examiner External

Examiner





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





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





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.





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.

●





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





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





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





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.





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.





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.





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





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





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





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





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,





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)





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.





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.





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)





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





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





('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





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





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





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





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.





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





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





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.





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,





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





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),





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





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





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





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





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





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





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.





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





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





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,





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





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





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.





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.





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.





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





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





• 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





• 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





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





• 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





• 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





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





• 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





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





• 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





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





• 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





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





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





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.





(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





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,





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





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





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.





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.





11. BIBLIOGRAPHY

● www.nabard.com

● Www.rbi.org.in

● www.google.com

● www.business.mapsofindia.com



5th Sem Project

Documents

Transcript of 5th Sem Project