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Showing posts with label credit. Show all posts
Showing posts with label credit. Show all posts

Gramin Bhandaran Yojana

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Gramin Bhandaran Yojana

It is well known that the small farmers do not have the economic strength to retain the produce with themselves till the market prices are favourable. There has been a felt need in the country to provide the farming community with facilities for scientific storage so that wastage and produce deterioration are avoided and also to enable it to meet its credit requirement without being compelled to sell the produce at a time when the prices are low. A network of rural godowns will enable small farmers to enhance their holding capacity in order to sell their produce at remunerative prices and avoid distress sales. Accordingly, Gramin Bhandaran Yojana, a capital investment subsidy scheme for construction/renovation of rural godowns was introduced in 2001-2002.
 

The main objectives of the scheme include creation of scientific storage capacity with allied facilities in rural areas to meet the requirements of farmers for storing farm produce, processed farm produce and agricultural inputs; promotion of grading, standardization and quality control of agricultural produce to improve their marketability; prevention of distress sale immediately after harvest by providing the facility of pledge financing and marketing credit; strengthen agricultural marketing infrastructure in the country by paving the way for the introduction of a national system of warehouse receipts in respect of agricultural commodities stored in such godowns and to reverse the declining trend of investment in agriculture sector by encouraging private and cooperative sectors to invest in the creation of storage infrastructure in the country. 

The project for construction of rural godowns can be taken up by individuals, farmers, groups of farmers/ growers, firms, non-Government organizations (NGOs), Self Help Groups(SHGs), companies, corporations, co-operatives, federations and agricultural produce marketing committees in the country. 
 

Financing Agriculture : Some Issues (India)

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Financing Agriculture : Some Issues (India)
 

Small and marginal farmers should be helped to liberate themselves from the stranglehold of moneylender and should be given priority for accessing low cost credit.

Post 1990 India has emerged as one of the world’s fastest growing economies. Its GDP growth rate of about 9% in the last few years is historically unparalleled except by our neighbour China. With rapid economic and social growth, however, new challenges emerge as also new growth strategies. For sustainable economic development, the crucial agricultural sector has to grow at a consistent 4% growth rate to GDP. Given the fact that 60% of our farming is monsoon dependent, ensuring consistent growth in food production is a major challenge, especially in wake of global warming and consequent climatic changes.

Credit has a very important role to play in supporting agricultural production and investment activities. The total credit flow to agriculture during the 10th Five Year Plan was expected to grow at a compound annual growth rate (CAGR) of 26.38%, as against the CAGR of 18.63% achieved during the 9th Five Year Plan. However, although the total agricultural credit has increased during the last six years, there are serious quantitative as well as qualitative concerns. The poor outreach of the formal institutional credit structure is a serious issue that needs to be corrected expeditiously. The findings of the National Sample Survey Organisation (NSSO) 59th Round (2003), reveal that only 27% of the total number of cultivator households received credit from formal sources while 22% received credit from informal sources. The remaining households, comprising mainly small and marginal farmers, had no credit outstanding. Comprehensive measures aimed at financial inclusion in terms of innovative products and services to increase access to financial services and institutional credit, are required. Other issues such as ensuring credit flow to tenant farmers, oral lessees and women cultivators, complex documentation processes, high transaction costs, lack of availability of quality inputs across all regions, inadequate and ineffective risk mitigation arrangements, poor extension services, weak marketing links and sectoral and regional issues in credit are also required to be addressed expeditiously. The lack of rural credit bureaus also delays the process of sanction of agricultural loans as there is need to reduce loan risk and documentation procedures.

 

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