CHAPTER 3 AGRICULTURAL FINANCE GIVEN BY CO-OPERATIVE BANKS

Transcription

1 CHAPTER 3 AGRICULTURAL FINANCE GIVEN BY CO-OPERATIVE BANKS India is agricultural based country and its majority of population stay in rural area. Agriculture is a dominant sector of our economy and credit plays an important role in increasing agriculture production. Availability and access to adequate, timely and low cost credit from institutional sources is of great importance especially to small and marginal farmers. Along with other inputs, credit is essential for establishing sustainable and profitable farming systems. Most of the farmers are small producers engaged in agricultural activities in areas of widely varying potential. Experience has shown that easy access to financial services at affordable cost positively affect the productivity, asset formation, and income and food security of the rural poor. The major concern of the Government is therefore; to bring all the farmer households within the banking fold and promote complete financial inclusion. 3.1 DEFINITION OF AGRICULTURAL FINANCE Murray (1953) defined agricultural 1 Finance as an economic study of borrowing funds by farmers, the organization and operation of farm lending agencies and of society s interest in credit for agriculture. Tandon and Dhondyal (1962) defined agricultural. Finance as a branch of agricultural economics, which deals with and financial resources related to individual farm units. 3.2 NATURE AND SCOPE Agricultural finance can be dealt with both micro level and macro level. Macro-finance deals with diverse resource of arising finances for agriculture as a entire in the economy. It is also concerned with the loan process, rules, system, monitoring and controlling of diverse agricultural credit organizations. Hence macro-finance is associated to financing of agriculture at aggregate level

2 Micro-finance refers to financial management of the individual farm business units. And it is concerned with the study as to how the farmer considers various resource of credit, quantum of credit to be on loan from each source and how assign the same among the alternative uses. It is also concerned with the future use of funds. Therefore, macro-finance deals with the facet relating to total credit requirements of the agricultural sector, the terms and conditions under which the credit is available and the method of use of total credit for the development of agriculture, while micro-finance refers to the financial management of individual farm business. 3.3 SIGNIFICANCE OF AGRICULTURAL FINANCE 2 1) Agriculture finance assumes essential and significance in the agro socioeconomic growth of the country. 2) Agriculture finance is playing a catalytic role in strengthening the farm business and augmenting the productivity of scarce resources. 3) Agriculture finance helps in use of new technological inputs purchased through farm finance helps to increase the agricultural productivity. 4) Agriculture finance can increase farm income. 5) Farm finance can also reduce the regional economic disparity and is equally good at reducing the inter farm asset and wealth variations. 6) Farm finance is similar to a lever with both ahead and backward linkages to the economic development at major and minor level. 7) As agriculture is still conventional and subsistence in nature, agricultural finance is required to create the supporting infrastructure for acceptance of new technology. 8) Agricultural investment is wanted to carry out micro and macro irrigation projects, rural electrification, installation of compost and pesticide plants, execution of agricultural promotional programmes and poverty alleviation programmes in the country. 2 finance getting the policies rights. 55

3 3.4 CLASSIFICATION OF CREDIT 3 It classifies credit into three groups, i.e. short, medium and long term. (i) Time classification:- The short-term loans are normally advanced for recurring purchases such as, seed, feed, fertilizers, hired labor expenses, pesticides, weedicides, hired machinery charges, etc., short-term loans can also described as seasonal loans/crop loans/production loans. The time boundary to pay back such loans is a year or at the most 18 months. It is anticipated that the loan plus interest would be repaid from the income received from the enterprise in which it was invested. (ii) Medium-term loans Medium-term loans are advanced for moderately longer lived assets such as machinery, diesel engine, wells, irrigation structure, threshers, shelters, crushers, draught and milch animals, dairy/poultry sheds, etc., where the returns accumulate from spread in farm assets in increase over more than one production period. The normal repayment period for medium-term loans is from fifteen months to five years. (iii) Long-term loans Long-term loans are related to the long lifted assets such as heavy machinery, land and its reclamation, errection of farm buildings, construction of permanent-drainage or irrigation system, etc. which require big money for initial investment. The profit generated through such assets is extending over the entire life of the asset. The normal repayment period for long-term loans from five to fifteen or even upto 20 years. Problems Faced by Farmers in Agriculture Finance (i) (ii) (iii) Farmers are not aware of credit policies and procedures Farming effectiveness estimation is complicated in the absence of records. Farming has impact of natural calamities and uncertainties. 3 Studies on credit problem of farmers in Udaipur district, thesis by.n rathore

4 (iv) (v) (vi) (vii) (viii) (ix) Frequent management and follow-up behind loan payment are complicated as farms are scattered. The Ownership of land is complicated to verify as land accounts are not updated. As farm products are unpreserved, they are subjected to distress sales. Long development period between investment and returns. Farmers income is seasonal; repayment schedule is drawn in harmony with income from investment. Sufficient infrastructural facilities are not accessible to execute new technologies. 3.5 SOURCES OF AGRICULTURAL FINANCE Indian farmers forever afire from ecological elements and natural elements it spoil corps of farmers. Every year lot of farmers ends their life because their crops are spoiled and they have no way to survive their life. They have a big problem how to live and how to do farming. So they want financial support. They are of two types first has institutional and second is non-institutional Institutional sources 4 Institutional sources consist of the government, co-operative societies, commercial bank including the regional bank, lead bank etc. following institutional sources are describing in below: Co-operative Societies: Indian planners believe co-operation as a tool used for economical growth of the farmers, mainly in the rural areas. They see in a village panchayat, a village co-operatives and village school, as the trinity of institution on which a independent and just economic and social order is to be built. The co-operative movement has been started in India mainly with a view to providing agriculturists finances for agricultural procedure at low rates of interest and projects them from the clutches of money lenders. 4 Agricultural finance by William G. Murray, G. Nelson year (1953) 57

5 PACS/LAMPS(In 18 panchayat) Central co-operative banks State co-operative banks 204 in Udaipur 369 in Rajasthan 30 in country Primary Agricultural Co-operative Societies (PACS) A Co-operative agricultural credit society make with 10 or more persons usually belonging to a village or a group of villages. The value of each share is normally nominal so as to allow even the poorest farmer to become a member. The members have limit less liability that is each member is fully responsible for the whole thrashing of the society, in the event of breakdown. Loans are given for small periods, usually for the crop season, for carrying on agricultural action, and the rate of interest is flat. PACS are playing a vital role in improving the economic and social condition. It offers short-term and medium-term loan to the members/farmers at sensible interest rates to meet their different needs. It offers credit to the farmers for agriculture function at cheap and simple terms. PACS is the base of the Co-operative Credit System on which the super structure of the short term co-operative credit system is built Central Co-operative Banks The central Co-operative banks situated at the district head office or some major town of the district. Their main purpose is to provide primary credit society separately from that, central Co-operative banks have been undertaking usual commercial banking trade also, such as attracting deposits from the public and lending to the needy against proper securities. Their main task is to lead Primary Agricultural Credit Societies in village. Central Co-operative Banks functions as intermediaries between the State Cooperative Bank and Primary Agricultural credit society. The central Co-operative banks have three sources of funds. The sources of funds of central Co-operative banks are given below: 1) Their own share capital and reserves 2) Deposits from the public and 3) Loans from the state Co-operative banks 58

6 State Co-operative Banks The state Co-operative Banks organize and manage the working of the central Co-operative Banks in each state. They serve as the association between the Reserve bank and the normal money market on the one side and the central Co-operative and primary societies on the other. They obtain their funds mainly from the general public by way of deposits, loans and advances from the Reserve Bank and they are have share capital and reserves. These Banks are the apex banks of the Co-operative credit structure. It serves as a link between NABARD from which it borrows and lends to the cooperative central bank and primary societies village Agricultural Finance Provider Co-operative Banks There are some co-operative banks which provide agricultural finance Bihar State Co-operative Bank Limited (BSCB) It was established in Patna in 1914 and was registered under the Cooperative Society Act 11 of It offers a range of loans and financial schemes to agriculturalists Haryana State Co-operative Apex Bank Limited (HARCOBANK) This bank is commonly known as HARCOBANK. It is involved in financing farmers, rural artisans, agricultural labourers and entrepreneurs of Haryana. 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) It was established on 19th May 1964 with a view to facilitate the operations of State and Central Cooperative Banks in general and Development of Cooperative Credit in particular. NAFSCOB has its head office in the city of Mumbai. This federation offers a range of agricultural loans through member State Cooperative Banks, District Central Cooperative Banks and Primary Agricultural Cooperative Societies. 59

7 Odisha State Co-operative Bank Limited (OSCB) The Odisha State Co-operative Bank was registered in the year 1948 as the Apex Bank of the short term Cooperative Credit structure of Odisha. The bank is involved in developing primary societies; large-scale agriculture multipurpose societies and farm service societies in rural Odisha. It dispenses farm credit and production credit. The bank has introduced Kisan Credit Cards in the S.T. Cooperative Credit Sector. It also organizes seminars on agricultural finance Repatriates Co-operative Finance and Development Bank Limited This bank was established in 1969 by the Government of India to rehabilitate Indians who were sent back from Burma and Sri Lanka. The bank functions in the South Indian States of Tamil Nadu, Andhra Pradesh, Kerala, Karnataka and the Union Territory of Pondicherry. 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 Co-operative Agriculture Development Bank Ltd It was established in 1958 to free farmers from exploitation by moneylenders. It is the apex body of 70 Primary Cooperative Agricultural Development Banks that provide long-term loans to farmers. The head office is located in Chandigarh. 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, and horticulture, and floriculture, sheep rearing and inland fisheries Andhra Pradesh State Co-operative Bank Limited (APCOB) It was founded in 1963 with its headquarters at Hyderabad. The bank directs cooperative credit to farmers through its member District Cooperative Central Banks and Primary Agricultural Cooperative Credit Societies. 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 60

8 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. Agriculture Development Bank (ADB): Agriculture Development Bank is regarded as the most important institution for agriculture credits. This bank was established in1968 (2024 B.S) as a development bank with the objective of bringing about all-round development in the national agriculture sector. It provides short term, medium term, and long term credit to farmers to purchase agricultural inputs, equipments, fixed assets like land, building, etc, against the security of gold, silver, land, building, etc. ADB/ N has been playing a leading role in agriculture finance. It provides about 85 percent of the total agricultural credit. In 2008/ 09, ADB/ N disbursed Rs million in the agriculture sector. Commercial Banks: Commercial Banks are another source of institutional agricultural credit. There are 27 commercial banks. These banks provides loans to the agriculture sector through their specific branches under the 'priority sector credit program.' As per the policy directive of Nepal Rastra Bank (NRB) every commercial bank is supposed to provide 12 percent of their total credit under the priority sector. In mid- January, 2007, Rs million was disbursed as agriculture credit by commercial banks. Rural Development Bank (RDB ): At present rural development banks are in operation, one each in all the five development regions of the country to provide credit without collateral to the deprived rural people especially for women groups for their income generation activities Land Development Banks 5 Land Development Banks have been set up in order to provide for long term finance. Previously it was called Land Mortgage Banks; the objective of the 5 Lad P. B. (2013) Agriculture Finance: An Overview Research Directions, Volume 1, Issue 1 / July 2013 ISSN:

9 bank is to provide long term credit to cultivators against the mortgage of their lands. In additional to this the bank does the following functions. 1) To open branches of the bank to different places. 2) To see whether there is proper disposal of the debt given. 3) To issue debentures from time to time. 4) To create feeling of co-operation among the members and to promote it. 5) To guide different development projects in agriculture. 6) To promote habit of savings among the members. 7) To provide valuable advice to cultivators in cultivators. These banks provide loans for 1) Repayment of old loans to cultivators. 2) Purchasing new land. 3) Digging and construction of the well. 4) Repairing the well The co-operative has the direct encouragement from the government and support of the NABARD as it had made spectacular progress. By 1981 the cooperatives were financing nearly 30 percent of the advantages of this National Bank for Agriculture and Rural Development (NABARD) 6 NABARD was set up in 1982 to execute the National Bank for Agriculture and Rural Development Act It is an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage industries, handicrafts and other rural crafts. It is also responsible for allied economic activities in rural areas and securing the prosperity of rural areas. The head office of NABARD is located in the city of Mumbai, Maharashtra. NABARD operates through 28 Regional Offices and 336 District Offices located across the country

10 NABARD is an top institution for all substance relating to policy, planning, and operations in the field of agriculture credit. It serves as refinance agency for the ground level institutions / banks given that investment and production credit for a variety of activities under agriculture and related sectors for ensuring integrated rural growth. It manages the development activities through a well planned Technical Services Department at the head office and Technical cells at each of the regional offices Non-Institution Source Money Lenders There are two types of money lenders in rural areas. There are rich farmers or landlords who combine farming with money-lending. There is also professional money lender whose only occupation or profession is to lend money. The cultivators depend upon the money-lenders for their requirements of cash. However, there are many reasons for the preponderance of the village moneylenders in rural area even now. I. The money lender freely supply credit for productive and non-productive propose, and also for short-term and long-term requirements the farmers. II. III. He is easily accessible and maintains a close and personal contact with the borrowers often having relations with family extending over generations. These methods of business are simple and elastic Landlord and others Traders and commission agents supply funds to farmers for productive purpose much before the crops mature. They force the framers to sell their produce at low price and they charge a heavy commission for themselves. Thus source of finance is particularly important in the case of cash crop like cotton, groundnut, tobacco, and in the case of fruit of chard like mangoes. Traders and commission agent may be bracketed with money lenders, as their lending to farmers is also at exorbitant rates and has other undesirable effects too. 7 Lad P. B. (2013) Agriculture Finance: An Overview Research Directions, Volume 1, Issue 1 / July 2013 ISSN:

11 a) Friends and relatives: The friends and relatives of farmers give credit to the farmers in little amount to meet day to day requirements and emergency needs. They give loan with or without interest and security. 3.6 TYPES OF AGRICULTURAL FINANCE Crop Loans 8 Crop Loans are also called short term loans for Seasonal Agricultural Operations. The Seasonal Agricultural Operations mean such actions as are start in the process of raising a variety of crops and are seasonally chronic in nature. The activities comprise, among others, plugging and arrange land for sowing, weeding, and transplantation where essential, obtain and apply inputs such as seeds, fertilizers, insecticides etc. and labour for all activity in the field for increase& harvesting the crops. Thus, the credit is necessary to meet the current expenses for raising the crops on land till the crops are harvested is construe as production or short term credit for seasonal agricultural operations. Rate of interest and collateral requirement on crop loans In terms of the Govt. of India instructions for , all the crop loans upto Rs. 3 lakh are being disbursed at the interest rate of 7% p.a. Govt. of India also provides interest subvention of 3% p.a. to prompt repaying farmers, thus making available the crop loans to them at 4% p.a. To bring more and more farmers within the institutional credit fold, the Government has extended this scheme to crop loans borrowed by farmers from Private Sector scheduled commercial banks in respect of loans given within the service area of the branch concerned. Crop loans beyond Rs. 3 Lakh are being disbursed by the banks at the rate of interest as per RBI and other conditions as approved by their Board of Directors. In terms of RBI instructions, no separate security is required for crop loans up to Rs. 1 Lakh. Beyond Rs. 1 lakh the security is decided by the individual bank in terms of RBI guidelines. 8 Agricultural finance sub-committee report,p

12 3.6.2 Kisan Credit Card Scheme 9 The Crop loans are generally disbursed by the banks through the mode of Kisan Credit Card (KCC). The Kisan Credit Card Scheme is in action all over the country and is executed by Commercial Banks, Co-operative Banks and RRBs. All farmers with small farmers, marginal farmers, share croppers, oral lessees and tenant farmers are eligible for issuance of KCC. KCC holders are also cover under Personal Accident Insurance Scheme (PAIS) against accidental death/permanent disability. Bank evaluates farmer s eligibility on the basis of land available for cultivation and the scale of finance fixed by the District Level Technical Committee in that district and the credit history of the farmer. The scope of the KCC has recently been broad-based to include term credit and consumption needs. Government has advised the banks to convert RuPay Kisan Credit Cards 10 RuPay is an Indian domestic card scheme launched by the National Payments Corporation of India (NPCI). It has been created to complete the Reserve Bank of India s want to have a domestic, open loop, and multilateral system of payments in India. RuPay makes easy electronic payment at all Indian banks and financial institutions, and competes with Master Card and Visa in India. NABARD, in January, 2013 set up Special Project Unit- Kisan Credit Card (SPU -KCC) with a mandate for encouraging co-operative banks and Regional Rural Banks across the country to issue Rupay KCC debit cards. The core objective of the unit is to facilitate issuance of cards by these banks through guidance, co-ordination with National Payment Corporation of India (NPCI), interaction with sponsor banks of RRBs and co-operative banks. The overarching goal is to develop cash-less eco system by enabling the farming community to avail all new banking facilities at par with urban area of the country. The SPU undertakes policy formulation, capacity building and networking with the various stake holders to achieve the above objectives Source Source 65

13 The new KCC guidelines specify that all KCC customers should have the facility of withdrawal through ATM / Debit cards. NABARD, with a view to facilitate early action in this direction, has already floated schemes providing financial support to RRBs and cooperative banks for issuing these cards. The Pig Farming Co-operative bank, commercial bank, NABARD etc also provide Pig Farming loan to farmers. For piggery development schemes with very huge outlays, complete project information will have to be prepared. In Pig farming project farmer should include information on land, livestock markets, availability of water, feeds, veterinary aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the type of assistance available from State Government Regional Pig breeding centers. The substance such as land development, building of sheds and other structures, purchase of the breeding, equipment, feed cost up to the position of income generation are generally measured under bank loan. Other items of investment will be measured on required basis after providing the adequate information. The price of land is not considered for lend. However, if land is purchased for setting up the piggery farm completely, it can be measured as beneficiaries margin money. The loan provider bank also needs information regarding number and types of animals to be buy their breeds, production and cost. Based on this, the total cost of the project, margin money to be provided by the beneficiary, necessity of bank loan, projected annual expenses, returns revenue and loss statement, settlement period, etc. included in the project cost. The Dairy Farming 11 Dairy farming is a big unorganized sector in India and a major source for income in rural areas. In an attempt to get in structure into the dairy farming and gives support for setting up dairy farms, the Department of Animal Husbandry, Dairying and Fisheries launched the Venture Capital Scheme for Dairy and

14 Poultry in The scheme offers interest free loans for setting up dairy units in India. Dairy farming is great business in India and according to Assocham report, milk production in India is likely to reach 190 million tones by 2015 with an annual turnover of over Rs.5 Lakh Crores. In an effort to further reinforce dairy farming in India, the NABARD funding for dairy farming has been launched. The objectives of the scheme include: To encourage setting up of modern dairy farms for production of clean milk To promote heifer calf education thereby preserve good breeding stock To bring structural transform in the unorganized sector. To bring about development of quality and traditional technology to handle milk on a commercial scale To produce self-employment and offer infrastructure mainly for unorganized sector. The following types of persons and association of persons are eligible for receiving the NABARD Dairy Farming Subsidy: Farmers Individual Entrepreneurs NGOs Companies Groups of un-organized and organized sector etc. Groups of organized sector include Self Help Groups, Dairy Cooperative Societies, Milk Unions, Milk Federations, etc. NABARD Dairy Farming Subsidy Schemes The following is the assistance provided under the NABARD subsidy for Dairy Farming scheme: 67

15 Table 3.1: NABARD dairy farming subsidy schemes S No. Type Investment Subsidy 1 Establishme nt of small dairy units with crossbred cows/ indigenous descript milch cows like Sahiwal, Red Sindhi, Gir, Rathietc / graded buffaloes upto 10 animals. 2 Rearing of heifer calves cross bred, indigenous descript milch breeds of cattle and of graded buffaloes upto 20 calves. 3 Vericompost (with milch animal unit.to be considered with milchanimal s and not separately) 4 To Purchase of milking machines /milkotesters /bulk milk cooling units (upto 2000 lit capacity). 5 To Purchase of dairy processing Rs 5.00 lakh for 10 animal unit minimum unit size is 2 animals with an upper limit of 10 animals. Rs 4.80 lakh for 20 calf unit minimum unit size of 5 calves with an upper limit of 20 calves. Rs. 20,000/- Rs 18 lakh. Rs 12 lakh. 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 1.25 lakh for a unit of 10 animals (Rs 1.67 lakh for SC/ST farmers,). Maximum permissible capital subsidy is Rs (Rs 33,300 for SC/ST farmers)for a 2 animal unit. Subsidy shall be restricted on a prorata basis depending on the unit size. 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 1.20 lakh for a unit of 20 calves (Rs 1.60 lakh for SC/ST farmers). Maximum permissible capital subsidy is Rs 30,000 (Rs 40,000 for SC/ST farmers) for a 5 calf unit. Subsidy shall be restricted on a prorata basis depending on the unit size. 25% of the outlay (33.33 % for SC / ST farmers)as back ended capital subsidy subject to a ceiling of Rs 5,000/- ( Rs 6700/- for SC/ST farmers,). 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 4.50 lakh ( Rs 6.00 lakh for SC/ST farmers). 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 3.00 lakh ( Rs

16 S No. Type Investment Subsidy equipment for manufacture of indigenous milk products. lakh for SC/ST farmers). 6 Establishme nt of dairy product transportatio n facilities and cold chain. 7 Cold storage facilities for milk and milk products. 8 Establishme nt of private veterinary clinics. 9 Dairy marketing outlet / Dairy parlour. Rs 24 lakh. Rs 30 lakh. Rs 2.40 lakh for mobile clinic and Rs 1.80 lakh for stationary clinic. Rs 56,000/- 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 6.00 lakh ( Rs 8.00 lakh for SC/ST farmers). 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 7.50 lakh ( Rs lakh for SC/ST farmers). 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 60,000/- and Rs 45,000/- ( Rs 80,000/- and Rs 60,000/- for SC/ST farmers) respectively for mobile and stationary clinics. 25% of the outlay (33.33 % for SC / ST farmers) as back ended capital subsidy subject to a ceiling of Rs 14,000/-( Rs 18600/- for SC/ST farmers). Source:- The Fisheries Development Co-operative bank, commercial bank, NABARD etc. also provide Pig Farming loan to farmers. For fisheries development Financial support is comprehensive for structure/renovation of ponds/tanks., building of sluices, acquire of fish prawn, fry and fingerlings/ fish seed/ prawn seed, acquire of inputs like oil cake, fertilizers, organic fertilizers and other feed materials up to the first harvest, acquire of nets, boxes, baskets, ropes, shovels, hooks and other accessories etc. 69

17 Eligibility: Loan support is extended to farmers, individuals, co-operative societies, companies, association of persons who have adequate know-how and necessary infrastructural facilities for completion of the scheme. Extent of Loan: Need based. Repayment of Loan: Loans are to be repaid within the period specified as under: - Pond fish culture: 5-8 years including gestation period with yearly mode of repayment. Brackish water fish/prawn culture: 5-10 years including gestation period with half-yearly mode of repayment. Scheme for Financing Marine Fisheries: Loan can be provided for acquired of automatic/non-automatic boats/deep sea fishing vessels/trawlers, acquire of nets-travel net/purse-seine/grill nets, acquire of other deck equipments like travel, winch, wire rope, gallows, nethandler, navigational lights, life jackets, life boats, anchors, direction finders, fish finders, etc. purchase of marine engine. etc. Eligibility: Loan support is extended to farmers, individuals, co-operative societies, companies, association of persons who have adequate know-how and necessary infrastructural facilities for completion of the scheme Extent of Loan: Need based. Repayment of Loan: Medium Term Loan: Non-automatic boats/vessels: 6-7 years. Automatic boats: 8-12 years. Cash Credit Limit: Cash Credit Limit for working capital need is improved every year. Sheep Farming Sheep with its multi-facet efficacy for wool, meat, milk, skins and manure, form a vital part of rural economy mainly in the arid, semi-arid and mountainous areas of the country. It gives a reliable source of revenue to the shepherds through trade of wool and animals. Sheep make a precious role to the livelihood of the economically weaker sections of the society. Amongst the livestock owners the shepherds are the poorest of the lot. 70

18 Financial assistance NABARD is atop institution for all matters relating to policy, planning and operation in the field of agricultural credit. It serves as refinancing organization for the institutions providing investment and manufacture credit for agriculture and rural development. It endorses growth through a well planned Technical Services Department at the Head Office and Technical Cells at each of the Regional Offices. Loan from banks with refinance ability from NABARD is accessible for starting sheep farming. For acquire bank loan, the farmers should apply to the Commercial, Co-operative or Regional Rural Bank in their area in the prescribed application form which is obtainable in the branches of financing bank. The Technical officer attached to or the Manager of the bank can help / give guidance to the farmers in get ready the project report to get bank loan. For sheep development schemes with huge outlays, detailed reports will have to be ready. The beneficiaries may use the services of NABARD Consultancy Services (nabcons) having familiarity in developing livestock projects for preparation of the project report to aim the bank loan for the items such as purchase of breeding animals, construction of sheds, purchase of equipments etc. The cost of land is not considered for loan. The scheme should include information on land, livestock markets, availability of water, feeds, fodder, veterinary aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the type of assistance available from State Government, Sheep society / union / federation. 3.7 SUMMARY In this chapter, described agricultural finances facilities and schemes provides by banks, co-operative societies and government. It has explained that India is agricultural based country and its 70% population stay in rural area. Agriculture is a dominant sector of our economy and credit plays an important role in increasing agriculture production. Availability and access to adequate, timely and low cost credit from institutional sources is of great importance especially to small and marginal farmers. Along with other inputs, credit is 71

19 essential for establishing sustainable and profitable farming systems. The Most of the farmers are small producers engaged in agricultural activities in areas of widely varying potential. Experience has shown that easy access to financial services at affordable cost positively affect the productivity, asset formation, and income and food security of the rural poor. The major concern of the Government is therefore; to bring all the farmer households within the banking fold and promote complete financial inclusion. Further in this chapter need for agricultural finance, Sources of Agricultural Finance were explained. Need for agricultural finance was further classified into two types productive needs and unproductive need. Sources of Agricultural Finance has been further described into two groups, first group provide information about Institutional sources. In this chapter also presented Types of Agricultural Finance Crop Loans, Kisan Credit Card Scheme, RuPay Kisan Credit Cards, Pig Farming, Dairy Farming, Fisheries Development and Sheep Farming were explained in detailed. 72

20 REFERENCES 1. Lad P. B. (2013) Agriculture Finance: An Overview Research Directions, Volume 1, Issue 1 / July 2013 ISSN: Bhardwaj R., Priyanka, &Raheja R. (2011) Role of Co-Operative Banks in Agriculture Credit: Organization, Growth and Challenges ZENITH International Journal of Business Economics & Management Research, Vol All India rural audit survey (Report of the committee of director) 6. Agricultural finance by: William G Murray G.Nelson year (1953)