According to the expert group on Financial Inclusion (GOI, 2008) only 27% of farmers have access to institutional credit. It is true that there have been some improvements in flow of farm credit in recent years. However, the Government has to be sensitive to the four distributional aspects of agricultural credit. These are:
(a) not much improvement in the share of small and marginal farmers .
(b) decline in credit-deposit (CD) ratios of rural and semi-urban branches.
(c) increase in the share of indirect credit in total agricultural credit and.
(d) significant regional inequalities in credit. (Policies for Raising Agricultural Growth and Productivity in India).
( S. Mahendra Dev, Indira Gandhi Institute of Development Research, Mumbai)
The Government of India has already put in place an agriculture credit policy to improve access of farmers to institutional credit. Steps would be taken for extensive coverage of farmers under the Kisan Credit Card Scheme. Micro credit and micro insurance will be promoted as an effective tool for encouraging production and reducing risk. Credit cooperatives have an important position and role in the rural financial system and priority would be given to reforms and revamping of cooperative credit institutions as per the recommendations of the Vaidyanathan Committee. Credit counselling centres would be established where severely indebted farmers can be provided a debt rescue package/ rescheduling to save them from a debt trap. National Bank
The primary objective of this literature review is to understand the concept of Rural Markets in India, and to find out the opportunities and challenges faced by these rural markets according to the researches already conducted. The Rural Markets, as a part of the economy have been untapped and have a huge potential. The urban markets in India are saturated and even though the contribution of agricultural sector has gone down in the GDP, India still lives in her villages.
South Asia is one of the most densely populated regions of the world, where despite a slow growth, agriculture remains the backbone of rural economy as it employs one half to over 90 percent of the labor force. Both extensive and intensive policy measures for agriculture
In this research essay the article “Farmers Get Biggest Subsidy Check in Decade as Prices drop,” written by Alan Bjerga. The article brings forward the pressing issues of the agriculture downturn of prices in the United States of America. The article reviews crop surplus and reduced income in terms of the drop of agriculture prices. The article also touches on the fact that the united sates of America agriculture system needs more aid to provide safety for net farmers.
Policies and funding support should enable farmers to provide a wider range of benefits and be accessible for long periods of time. We should avoid policies that focus on supporting one benefit, often at the expense of others.
The drought has weakened the ability of farmers who produce food. Therefore, sub-Saharan Africa and Australia farmers obtained reduced income and tax revenues. Instead, food prices and the rate of unemployment were increased. Compared with sub-Saharan Africa, Australia had more severe financial problems. With an economic recession spreading in agricultural industry, Australia farmers are encumbered by debts that they cannot afford new technologies or crops.
New farmers’ chances for success will be greater if they can avoid going into debt to finance their farm operation, since the initial profits can be reinvested in the farm rather than paying the bank. Credit cards, with their extraordinarily high interest rates, are a particularly dangerous way to finance a farm. Thinking carefully about options, and resisting temptations to buy more and better equipment than is needed is important for all farmers to remember. Many operations have been sunk by overcapitalization. Some operations will benefit from a loan, especially if they have a solid business plan that exhibits a realistic strategy for paying it off.
Farm Credit has been serving producers across this nation for over a century. The opportunity
Insurance companies can add about Rs.1000 crore to their net worth from nearly 200 million rural folk that are looking for alternative savings channels for their surpluses provided these come out with innovative schemes at affordable premium. Currently, only 8-10% rural households are covered under life insurance schemes and remaining 90% can be targeted for new innovative insurance schemes. Rural India’s income has risen due to shifting of its occupation from agriculture to non-farm agricultural income and it has become an important faced of rural India. This income mainly comes from dairy, food processing and packaging, commodity trading and infrastructure development income. The non-agriculture base of rural occupation and income has been growing in rural GDP figures that are estimated at 45%. According ASSOCHAM has therefore felt that this is the opportune time for the public and private insurance companies to enter into rural India in a big
Integrated micro financial services through the development of saving-loans Cooperatives (Credit Unions) and Rural Banks (BPR)
The difficulty faced by the MFI’s has been to understand the issues faced by the rural people. So, the credit understanding of the rural people is convoluted.
South Asian countries, mainly India, Pakistan, and Bangladesh, have landholding structure reminiscent to the colonial regime set regulations that segregated land. In the three regions, there is a clear demarcation of regions per country with higher land allocation per capita and regions with lower land allocation per capita. Landholding pertains to factors such as tenancy rights, land-size debate, property rights and land distribution, which go handy with agricultural production within the three countries (Tirthankar, 2007). Agriculture is the mainstream economic activity that takes place within the southern Asian countries. Hypothetically, a significant proportion of South Asia’s rural population live in rural areas whereby agriculture is the main practiced activity. In return, agriculture doubles up as an important economic activity for the countries and thus the need to ensure progressive development of the agricultural sector. This paper dissects landholding structures and the implication of the landholding structures to agricultural development within South Asian. The paper, further, postulates policy implications of the landholding structures and measures that policy makers need to take into consideration in ensuring that farmers benefit from landholding structures through maximum agricultural development.
Sriram (2007) has stressed that the policy intervention in agriculture has been credit driven only, which becomes more pronounced in the recent interventions made by the government through the policy of doubling of agricultural credit, providing subvention and putting an upper cap on interest-rates for agricultural loans, revival of co-operative credit structure through the package recommendation by the Vaidyanathan Committee and policy responses to farmers suicides but argued that it is very difficult to establish a causal relationship to show that the increased supply and administered pricing of credit will help to increase agricultural productivity and the wellbeing’s of farmer. In his paper, he tried to examine the demand side issues of agricultural credit from a policy making perspective and conditions that makes credit more effective or productive in a real sense for which he suggested that there is a need to look at the rural financial services as a broader theme rather than limiting it to agricultural credit flows only, because mere increase in the supply of credit will not address the problem of productivity unless it will be not accompanied by investments in other supportive services.
India is a global agricultural powerhouse. Agriculture, fishery and forestry are the largest contributors to the Gross Domestic Product (GDP) in India. This however plays a major role in the Indian economy. It is the largest in the production of wheat, rice and cotton. Multiple factors have influenced the growth of India’s agricultural sector which includes the growth of consumption, household income and expansion in agricultural exports. There has been a rise in private participation in Indian agriculture and the use of information technology in the agricultural industry. However, India suffered its own economic downturn in 2008-09, when production output from the agricultural industry was hampered by unusual rain conditions leading to a drought in 2009-10 (Mintel, 2013). There is also an issue of pricing, storage, and processing which have had an impact in the degree of value creation and this is affecting most farmers especially the poor ones who are dependent on seed sold in the market. James Mortimer Ltd is a merchant company in grains and seeds. It was established in the year 1869; it has a reputation for fairness and integrity. It is a medium sized wholesale farming business with a warehouse, seed plant facility and standalone grain store in the United Kingdom.
Abstract: Government policies to increase production and farmers' income at the same time with the ultimate goal of poverty reduction; one of them through distribution credit to strengthen farmers. Such efforts implemented by providing capital assistance which known as program of Food Security and Energy Credit. This research determines the proportion of credit purposes in the capital structure of farmers on farming, especially rice and determine the factors that influence the demand for agricultural credit by farmers, especially rice farming. The research was conducted in two