Suman New Project

7/30/2019 Suman New Project

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UNIVERSITY OF MUMBAI

PROJECT REPORT ON

ROLE OF BANKING IN AGRICULTURAL SECTOR

SUBMITTED BY:

SUMAN AKSHAYLAL KUSHWAHA

T.Y.B.COM (BANKING & INSURANCE)

(SEMESTER-V)

(2012-2013)

PROJECT GUIDE

PROF. UMA DURGUDE

SANPADA COLLEGE OF COMMERCE &

TECHNOLOGY PLOT NO: 3, 4 & 5, SECTOR2,

SANPADA (EAST)

NAVI MUMBAI400705


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C E R T I F I C A T E

This is to certify that Ms. SUMAN A KUSHWAHA of Bachelor

T.Y.Bcom (Banking & Insurance) has undertaken and completed the

project work titled ROLE OF BANKING IN AGRICULTURAL

SECTORduring the academic year.

2012-2013 under the guidance of Prof. UMA DURGUDE

submitted on ------------------------ to this college in fulfillment of the

curriculum of Bachelor of T.Y.Bcom (Banking & Insurance)

University of Mumbai.

This is a bonafide project work and the information presented

is true and original to the best of our knowledge and belief.

(PROF. UMA DURGUDE) (PROF. SHERAWATI JAIRAJAN (DR.

.A.SHAIKH)


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*DECLARATION*

I Ms. SUMAN A KUSHWAHA student of Sanpada college of

Commerce & Technology Fifth semester, hereby declare that I have

completed this project on ROLE OF BANKING IN AGRICULTURALSECTOR in the academic year 2012-2013

The information submitted is true and original to the best of my

knowledge.

Date : Student Signature

(SUMAN A KUSHWAHA)

Place: NAVI MUMBAI


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ACKNOWLEDGEMENT

Like every project needs direction this one is no exception. I would therefore,

like to express my sincere gratitude to UMA DURGUDE for helping me in

this project. Her valuable suggestions and insights have helped achieve much

more than what was conceived of the project at its inception. I would also like

to thank my friends who were also a great support while working on the

project. I am sincerely thankful to our coordinator Mrs. SHERAWATI

RAJAN for her unconditional support and valuable thoughts. Her guidance

and encouragement have been instrumental in making this project a learning

experience. I am grateful to ORIENTAL 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.

I believe the project would have been incomplete without their support.


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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 sector needs adequate finance

through banks to accelerate the overall growth.

With the governments 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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*INDEX*

SR.NO CONTENTS PAGE.NO.

1 EXECUTIVE SUMMARY

2 SECTION 1 8-12

3 Introduction

4 Objectives

5 Methodology

6 SECTION 2 13-19

7 Rural infrastructure Development Fund.

8 Role of Banks in agricultural sector.

9 SECTION 3 20-22

10 NABARD

11 SECTION 4 23-34

12 Agricultural and food management in India.

13 SECTION 5 35-38

14

Schemes of Nationalized banks related to

agricultural.

15 SECTION 6 39-41

16 Schemes of Co-Operative agricultural bank.

17 SECTION 7 42-44

18 Schemes related to central ministries

19 SECTION 8 45-52

20 Schemes related to state department


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21 SECTION 9 53-57

22 Religion rural bank.

23Establishment and in corporation ofregional rural bank.

24 Business of a regional rural bank.

25 SECTION 10 58-59

26 CASE STUDY

27

SECTION11 FINDINGS &

CONCLUSION 60-64

28 Findings

29 Suggestions & Recommendation

30 Limitation

31 Conclusion


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SECTION 1

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 theproduction and productivity. This lead banks to influence the agriculture sector.
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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 variouselements of banking companies.

It highlights the various dimensions of the Banking Companys 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.


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SECTION 2

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 329lakh 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


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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 man dies 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.


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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 toSeptember 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


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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, 37,241crore 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, 994.89crore towards

debt waiver and Rs.3005.11 crore towards debt relief claims.


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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 year, 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


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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 (Road)

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, in his 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, 000crore 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


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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

in charge 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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SECTION 3

3. NABARD:-

NABARD was established on the recommendations of Shivaraman Committee, by an

act of Parliament on 12 July 1982 to implement theNational 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 investmentand production credit for promoting the various developmental activities in rural

areas

Takes measures towards institution building for improving absorptive capacity ofthe 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 indevelopmental 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 GeneralManager [CGMs] as its head, and the Head office has several Top executives like the

Executive Directors[ED], Managing Directors [MD], and the Chair person. 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 mainlyof 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 Programmers 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.


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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.
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SECTION 4

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


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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 19T90s to 15.8 per cent during2001-08. However, the


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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 rabbi 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 sectorscheme, Development


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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

SeedVillage 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 Ministers 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 PMs

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 theseed industry so as to enhance seedreplacement


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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 actuallyutilized. 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 theagricultural 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


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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 andWest Bengal. The interventions covered under NFSM-Rice include


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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; rotators, 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 StateBihar, 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 attentionIntegrated 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.


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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 inherentlimitations 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 ProductionEstimates (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), Ahmadabad 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 modeling is being done by the Institute of Economic


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Growth (IEG), New Delhi. The activities relating to forecast of production based on

crop growth and yield modeling 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 theagricultural 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 rabbi

1999-2000 seasons. Under the scheme and until rabbi 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 kharif2008 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 rabbi 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.


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National Policy for Farmers, 2007

Major policy provisions of the National Policy for Farmers, 2007, include provisions

for asset reforms, water use efficiency, and 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 bare,

jowar, ragi and millets, which are mostly grown in dry land areas. A

comprehensiveNational 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.


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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 modernmanagement. 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 moderntechnology 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 theneeds of the farm


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SECTION 5

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

Itprovides 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 KisanSampathi, tractor

financing, Kisan Green Card, Surya Sakhti and loans to dairy agents.

Bank of Baroda

ItOffers farmers the Baroda Kisan Credit Card. It also has schemes for the purchase

of agricultural implements, heavy agricultural machinery like tractors, irrigation andother 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, withvery flexible
http://india.gov.in/outerwin.php?id=http://www.allahabadbank.com/kissan_creditcard.htmhttp://india.gov.in/outerwin.php?id=http://www.allahabadbank.com/kissan_creditcard.htmhttp://india.gov.in/outerwin.php?id=http://www.allahabadbank.com/kissan_creditcard.htmhttp://india.gov.in/outerwin.php?id=http://www.allahabadbank.com/kissan_creditcard.htm


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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 MaharashtraOffers agriculturists a MahabankKisan 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

It 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 Bankprovides 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

It offers a range of loan schemes to farmers. They are the Corp Gram MitraYojana,

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 DurgRajnandgaonGramin 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 BhumiheenKisan Credit Card

Scheme.
http://india.gov.in/outerwin.php?id=http://www.centralbankofindia.co.in/home/product/credit/centkisan.htmhttp://india.gov.in/outerwin.php?id=http://www.centralbankofindia.co.in/home/product/credit/centkisan.htmhttp://india.gov.in/outerwin.php?id=http://www.centralbankofindia.co.in/home/product/credit/centkisan.htm


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Indian Bank

A wide range of schemes for agriculturalists such as Swarojgar Credit Card,

GraminMahilaSowbhagya Scheme, Kisan Bike Loan Scheme,

YuvaKisanVidyaNidhiYojana and Indian Bank Kisan Card Scheme.

Indian Overseas Bank

It 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, KhetiUdyogKhazanaYojana, vermi

composting scheme, horticulture clinic and private veterinary clinic with dairy unit

scheme.

Punjab National Bank

This bank has a special website called PNB Krishiefor 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.
http://india.gov.in/outerwin.php?id=http://www.pnbkrishi.com/http://india.gov.in/outerwin.php?id=http://www.pnbkrishi.com/


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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 HirakJayantiKrishiYojana 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

KrishiLaghuParibahanYojana, United KrishiSahayakYojana, United

GramyashreeYojana, GraminBhandaranYojana and the United BhumiheenKisan

Credit Card.

Vijaya Bank

This bank offers one comprehensive financial scheme known as the

VijayaKrishiVikas (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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SECTION 6

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

RashtriyaKrishiBimaYojana.

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.


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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.


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Andhra Pradesh State Cooperative Bank Limited (APCOB) :

It 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.


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SECTION 7

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)

RashtriyaKrishiVikasYojana (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)


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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)

MinikitProgramme for Rice, Wheat & Coarse Cereals

GraminBhandaranYojna

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

SebBimaYojana (Apple Insurance)

DrakshaBima(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


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Promotion and Strengthening of Agricultural Mechanization through Training,

Testing & Demonstration

Livestock Insurance Scheme


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SECTION 8

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 RashtriyaKrishiBimaYojna

Rural Infrastructure Development Fund (RIDF)

Prime Minister RozgarYojana (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 SwalambanYojna-Loan Scheme for SC/ST Persons for Starting Transport, Service, AgricutlureSecto


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Manipur:

Macro Management Mode of Agriculture

Oilseed Production Programme

National Pulse Development Programme

Accelerated Maize Development Programme(AMDP)

PradhanMantri Gram SadakYojana (PMGSY) Integrated Cereal Development Programme (ICDP)-Rice

Sustainable development on sugarcane base croppinsystem(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


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Assistance to Small & Marginal Farmers for Increasing Agriculturalproduction

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 Programmers

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 PanchayatSamitis

Orissa

Sugarcane Development Scheme

Balance and Integrated use of Fertiliser Scheme


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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

PradhanMantri Gram SadakYojna, PMGSY

Orissa Tribal Empowerment and Livelihood Programme(OTELP)

Scheme for Homesteadless Families - Project Vasundhara

Watershed Development Programme

RashtriyaKrishiVikasYojana

National Project on Management of Soil Health and Fertility

National Food Security Mission

Command Area Development & Water Management ( CADWM)

Scheme for PaniPanchayat

Scheme on Organic Farming

Rastriya Sam VikasYojana

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

ChatragrihYojna

Book Bank Yojna


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Maharashtra

Tree Planting on Community Lands in Identified Watersheds

Western Ghat Development Programme

NABARD-WDF Assisted Watershed Development Programme

River Valley Project

Gram SachivalayaYojana (GSY)

Puducherry

Schemes for Agricultural Workers Welfare Society

Key Village Scheme

Tripura

SompornaGraminRozgarYojana (SGRY)

Madhya Pradesh

KrashakMitraYojna

Sooraj-DharaYojna

Bhoo-JalSamwardhanYojna

RashtriyaJalgrahanKshetraVikasKarykram

RashtriyaKrishiBeemaYojna

Ponds Construction Scheme for Irrigation

Rashtiya Biogas VikasYojna

BalramTaal Construction Scheme

Annapurna Yojna

SaghanKapasVikas


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IsopamYojna

Sugarcane Development Scheme

Unified Grains Development

RashtriyaKrishiBeemaYojna Minor Irrigation Scheme

Amalgamated Special Fund (ASF) Schemes

LaghuSinchaiYojnantargatNalkoopKhananYojna

Micro Management of Agriculture

River Bank/ Flood Water conservation Scheme

Punjab Subsidy on Ridomil/Hybrid seeds/ Demonstration plots

Prime Minister's RozgarYojana(PMRY)

KanayaJagritiJyoti Scheme

Training Infrastructure in Dairying for Rural Dairy Farmers

Farmer's Welfare Scheme

RashtriyaKrishiVikasYojana (RKVY)

Mai BhagoIstri Shakti Scheme

Andaman and Nicobar Island

Supply of inboard/outboard engines at 50 per cent subsidy

Fodder Development Programme

Rajasthan

Doctor KaApna Clinic Scheme, 2008

Meghalaya

SampoornaGrameenRozgarYojana (SGRY)


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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

RashtriyaKrishiVikasYojana (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


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Andhra Pradesh

Seed Village Scheme

RashtriyaKrishiVikasYojana

Economic Assistance (Bankable Scheme)

Scheme of Development of Primitive Tribal Groups

National Horticulture Mission

Polambadi


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SECTION 9

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.


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(2) Every Regional Rural Bank shall be a body corporate with perpetual succession

and a common seal withpower, 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


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twentyfivelakhs 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 theActs

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


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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 theSponsor 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 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:--


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(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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SECTION 10

CASE STUDY

Bank of India was founded on 7th

September, 1906 by a group of eminent

businessman from Mumbai .The Bank was private ownership and control till

July 1969 when it was nationalized along with 13th

other banks.Beginning with one office in Mumbai, with a paid up capital of Rs.50 lakh and

50 employees, the bank has made a rapid growth over the year and blossomed

into mighty institutions with a strong national presence and sizeable

international operations. In business volumes, the bank occupies a premier

position among the nationalized bank.

The bank has 3021 branches in India spread over all states/ union territories

including 136 specialized branches. These branches are controlled through 48

Zonal offices. There are 28 branches/ offices (including 3 representative offices)

abroad.

The Bank came out with its maiden public issue in 1997 and follow on

qualified institutions placement in February 2008.Total number of shareholders

has on 31st

march 2009 is 2,35,5,89.


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While firmly adhering to a policy of prudence and caution, the bank has been

in the forefront of introducing various innovative services and systems. Business

has been conducted with the successful blend of traditional values and ethics and

the most modern infrastructure. The bank has been the first among the

nationalized banks to establish a fully computerized branch and ATM facility at

the Mahalaxmi Branch at Mumbai way back in 1989. The bank is also a founder

Member of SWIFT in India. It pionnered the introduction of the health code

system in 1982,for evaluating / rating is credit portfolio.

The banks association with the capital market goes back to 1921 when it

entered into an agreement Bombay stock exchange (BSE) to manage the BSE

clearing house . It is an association that has blossomed into a joint venture with

BSE,called the BOI shareholding Ltd to extend depository services to the stock

broking community.Bank of India was the first Indian bank to open a branch

outside the country, at London ,in 1946 ,and also the first open a branch in

Europe , paris in 1974.The bank has sizeable presence abroad, with a network of

28 branches(including 5 representative offices) at key banking in financial

centers viz.london , network ,paris,Tokyo,hong-kong and Singapore .The

international business accounts for around 17.82 % of banks total business.


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SECTION 11

FINDING

1. Agricultural bank is having good brand image in the minds of the

farmers.

2. Major of the people have got loans from Agricultural bank only.

3. Most of the farmers are not aware of the products of Agricultural loan.

4. Some of the farmers felt that the interest rates are some what high.

5. Some of the farmers not having good faith on private banks like Bank of

India.

6. Most of the people directly go to Punjab National Bank to apply

agricultural loan.

7. Bank of India provides good service to the farmers.

8. The interest rates also some what high when compared to other banks.


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SUGGESTION AND RECOMMENDATION

1. Since a vast proportion of the population involve in agricultural is

marginal and poor farmers the schemes to offer credit to these

farmers should be tailored to effectively meet their demands.

2. Flexible products should be introduced which allows the farmers

to borrow frequently and paying smaller installments similar to

those offered by microfinance institutions.

3. With the vast network of public sector bank already available

there should also be a policy to allow more private participation in

the agricultural lending sector.

4. The need of the hour is to make maximum use of the existing

resources and make banks more participative and create a

conducive environment so that the agriculture sector can be cared

for life any other sector.

RESEARCH LIMITATION

There were few websites on role of banking in agriculturalSector.

The data provided by the website are not fully reliable.


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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% maybe 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, SaurabhBhat, 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.

Nationalization of banks was a major step for channelizing credit to various sectors of

economy of which agriculture is a major sector. A dynamic and growing

agricultural sector needs 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

governments 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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BIBLIOGRAPHY

www.nabard.com Www.rbi.org.in www.google.com www.business.mapsofindia.com
http://www.nabard.com/http://www.nabard.com/http://www.rbi.org.in/http://www.google.com/http://www.google.com/http://www.business.mapsofindia.com/http://www.business.mapsofindia.com/http://www.business.mapsofindia.com/http://www.google.com/http://www.rbi.org.in/http://www.nabard.com/


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