The scheme has been aimed at providing gainful employment to agriculture graduates (those youths acquiring knowledge in agriculture and on the lookout for scope) in new emerging areas in agriculture and allied sectors. The scheme is open to all agricultural graduates in subjects like horticulture, animal husbandry, fishery, dairy, veterinary, poultry farming, pisciculture and other allied activities.
We support partners in the public and private sectors across several African countries that are committed to transforming smallholder agriculture into a sustainable, inclusive foundation of economic opportunity.
If implemented effectively, net-zero emissions pledges could limit warming to 2.2°C, closer to the well-below 2°C goal of the Paris Agreement. However, many national climate plans delay action until after 2030. The reduction of methane emissions from the fossil fuel, waste and agriculture sectors could help close the emissions gap and reduce warming in the short term, the report finds.
The parliament through Act 61 of 81 set up National Bank for Agricultural and Rural Development [NABARD] after the former chairman of Reserve Bank of India Shri. B. Sivaraman submitted a report to the Governor on November 28, 1979. The committee set up by Sivaraman reviewed the arrangements for Institutional Credit for Agriculture and Rural Development CRAFICARD.The objectives of NABARD was to be able to provide adequate assistance to the millions of farmers in rural India who were not being given any importance in the quick and ever rising economic boom that was happening with Indian markets and industries. The committee decided on the fact that the Agricultural sector deserved as much attention as the other sectors, it being a sources of economy that India largely depends on thus the committee realized that the huge credit that the sector would require to achieve any kind of development. There was a requirement for incorporation of the credit system and rural agricultural development. Get Help With Your EssayIf you need assistance with writing your essay, our professional essay writing service is here to help!
The agriculture sector is an important component of the Indian economy as it provides livelihood to a large section of the population. According to Census 2011, out of the total workers of 481.7 million, there are 118.7 million cultivators and 144.3 million agricultural labourers, which means approximately 55 per cent of the total workers were employed in agriculture and allied sector. However, the percentage share of workers engaged in agriculture sector has been declining. As per Labour Bureau Report 2015-16, 46.1 per cent of the working population was employed in agriculture and allied sector. Further, as per an ILO estimate1 employment in agriculture sector as percentage of the total employment was approximately 44 per cent in the year 2018.
4. Indian agriculture and allied sector broadly covers four activities, viz., crop, livestock, forestry and fisheries. To stimulate the productivity of these activities, Government of India (GoI) has, from time to time, given policy thrusts which led to the various agricultural revolutions, viz., green revolution in cereal production (late 1960s-early 1980s) which was succeeded by the white revolution in milk production (starting in the 1970s), the gene revolution in cotton production, (in early 2000) and the blue revolution which focused on increasing fisheries production and productivity (1973-2002). As a result, the agriculture sector has not only become self-sufficient but has emerged as the net exporter of several agricultural commodities like rice, marine products, cotton etc.
6. The National Credit Council, in its meeting held in July 1968, emphasised that commercial banks should increase their involvement in the financing of priority sectors, viz., agriculture and small-scale industries. The description of the priority sectors was later formalised in 1972 based on the report submitted by the Informal Study Group on Statistics relating to advances to the Priority Sectors constituted by the Reserve Bank in May 1971. Over the years the scope of priority sector lending has evolved to give greater focus to those segments of the population that have traditionally been neglected from accessing credit, thus making it a tool to address the problem of financial exclusion. The evolution of Priority Sector Lending Guidelines in agriculture is given in Annex 1.
iii. Loan Waiver - Loan waivers announced by state governments have affected the credit culture in the country with many borrowers withholding repayment, in anticipation of a loan waiver. This adversely affected the credit history of borrowers and their future prospects of availing fresh loan for agricultural purposes. This led to further deterioration of credit culture as evident from the high level of Gross NPA of 8.44 per cent as on March 31, 2019 in the agriculture sector.
11. The report consists of five chapters: Chapter 1 discusses the reach of formal agricultural credit, Chapter 2 explains the policy measures for improving inclusiveness in the agriculture sector, Chapter 3 analyses the impact of farm loan waivers on state finances and agricultural credit, Chapter 4 provides a brief on the learnings during the interaction with four financial institutions in China and Chapter 5 summarises the recommendations of the IWG.
vi. The Union Government introduced the Ground Level Credit (GLC) policy in year 2003-04. Under this policy, GoI announces GLC targets for agriculture and allied sector in the Union budget every year which banks are required to achieve during the financial year. These targets are set region-wise, agency-wise (SCBs, RRBs & Cooperative banks) and loan category wise (crop and term loan).
The emergence of farm technologies integrated with robust ICT framework and other farm-related innovations hold tremendous potential to positively impact the growth in the agriculture sector. The technological innovations leverage tools like Internet of Things, Cloud, Big Data, etc. Some of the major developments are discussed below:
vii. Innovations like movable warehouses/cold storages and mobile based apps providing farm machineries on rental basis have been successfully operating but on a small scale. Hence, the GoI should identify the successful models in these areas which can be scaled up across the country. Further, banks should be encouraged to provide credit to such innovative solutions which support the agriculture sector.
1.5.1 In order to understand the performance of different agencies in lending to agriculture sector, a comparative analysis has been done showing their share in total agricultural and allied credit outstanding as on March 31, 2017.
b. In 2015, the RBI regulations stipulated that a minimum of 50 per cent of the MFI loans are to be deployed for income generating activities. As per Bharat Microfinance Report (2017), agriculture, animal husbandry and trading are major sub-sectors where income generating loans are deployed. Non-income generating loans are used for consumption, housing, education, water and sanitation and health etc. The trend showing the flow of credit for agriculture and non-agriculture purposes by NBFC-MFIs is as given here:
Policy interventions such as Priority Sector Lending (PSL) have resulted in improved credit flow by banks to the agriculture sector and particularly to small and marginal farmers (SMFs). The Kisan Credit Card (KCC) scheme was an innovative product designed to cater to the different credit needs of the farmers. It has boosted farm credit but needs further impetus to increase the coverage. Other credit delivery models have brought about inclusiveness to the bottom of the pyramid.
2.1.1 Priority Sector Lending is a major policy intervention/initiative through which credit is directed to sectors of national priority. The objective of the PSL has been to ensure that vulnerable and weaker sections of the society get access to credit and that there is adequate flow of credit to employment intensive sectors like agriculture and MSME.
i. The above mentioned 8 per cent sub-target for small and marginal farmers was prescribed based on the recommendation made by the Internal Working Group (IWG), which submitted its report in March 2015, to revisit the Existing Priority Sector Lending Guidelines. The said working group recommended the sub-target of 8 per cent for small and marginal farmers based on their share in the operated area, landholding and their contribution to the agriculture sector.
2.2.3 As can be seen in the above chart, the proportion of short term crop loans to crop-related investment credit which was 51:49 in 2000 has drastically changed to 75:25 in 2018. It is interesting to note that the impact on investment credit was more pronounced 2011 onwards, after the introduction of prompt repayment incentive in 2009-10. The declining trend of investment credit is a cause of concern as the flow of investment credit is important for the long term sustainability of the agriculture sector. Apart from the ISS, the other probable reasons for consistent increase in short term crop loans and decline in investment credit are attributable to:
2.2.5 GCF in agriculture as percentage of agri-GDP was 9.2 per cent in 1980-81, reached its peak at 18.2 per cent in 2011-12. Thereafter, it showed a declining trend till 2015-16 and then a slight upward trend with 13.8 per cent in 2016-17. Further, the public GCF which was at 43.2 per cent during 1980 - 81 has come down significantly to 18.8 per cent during 2016-17. Hence, there is a need for the Central Government along with state governments to improve their spending towards capital expenditure which ultimately will stimulate the demand for investment credit in the agriculture sector.
2.8.2 The basic philosophy behind the introduction of PSLC is to support the comparative advantage of different banks in their respective areas of specialisation which brings in efficiencies and results in optimal allocation of lendable resources. The banks thus have the incentive in lending to different categories of the priority sector over and above the PSL targets and sub-targets and issue PSLCs against the surplus loans, thereby enhancing lending to these sectors. For instance, a bank with expertise in lending to agriculture can increase its lending thereby creating a surplus and get benefit by selling its surplus through selling PSLCs. The premium income earned makes achieving a surplus in PSL categories a lucrative avenue for banks. 2b1af7f3a8