inputmarketing

8/12/2019 inputmarketing

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Key Inputs

seed fertilizer PesticideFarm PowerMachinery

Credit &wage Rate

Farm Inputs

Agricultural (Input & Output) Marketing


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Seeds

O Any part of the crop from which a new crop will grow.(Agronomically)

O Seed is a fertilized ovule.(Botanically)

O Seed quality is estimated to account for 20-25% of productivity.

O World seed market is about 2,20,000 crore rs.

O Indian seed market size is about 9,000 crore rs.

O The seed replacement rate in most of the crops is very low, with the

exception of cotton and some other vegetables

SEEDGENERATIONS

NUCLEUS SEED BREEDER SEEDFOUNDATION

SEEDCERTIFIED

SEED



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Company turnover (In Million US$)



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Indian Seed Industry

Total Seed Industry is worth about 80009000 crores.

Private sector accounts for 70% turnover in seed.

Almost 1/3 companies have a global technology/financial partner.

Private seed companies are spending 1012% of their turnover in

research and development (R&D).

R&D budget of medium sized companies is growing @ 20% per annum..

At present the number of seed companies engaged in seed production or

seed trade is about 500 number.



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Key Players in Indian Market

Company Holding structure Turnover (Crore) focus

Mahyco Monsanto 1000 All crops

HLL Unilever 700 All crops

Proagro Aventis 600 All crops

Ankur 400 Cotton, vegetables

Namdhari 500 vegetablesAdvanta Advanta & ITC 300 sunflower

Syngenta Syngenta 350 Corn, cotton, millet

Indo-American Family 300 Sunflower, cotton

Mahendra Hicks Mouse 300 Millets, cotton

Spic-phi POC 250 Corn, millets

Cargill Monsanto 200 Corn, sunflower

EID Parry Family, Monsanto 10 Sunflower, cotton

Nath Nath Group - Cotton,

millets,corn

Total 9000SOURCE: Seed division of DAC

Indian Company & its

Turnover



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Seed Replacement Rate



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Seed export

O Currently, seed export from India is very minuscule at around 500 crore rs.

accounting for just 1% of total global seed export.

horticulturalcrops, 31%

maize,15%

herbagecrops, 12%

beet, 8%

potato,11%

wheat, 2%

other agricrops, 21%

Source: seed

association of

IndiaAgricultural (Input & Output) Marketing


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Protection of Plant Varieties and

Farmers Rights Authority (PPV&FR)

O Enacted in 2001.

O Varieties of crops can have proprietary or Intellectual Property Rights

(IPRs) on them through either patent or plant variety protection or a

combination of both.

O The PPV&FR Authority registers plant varieties to protect plant

breeders rights, thereby stimulating R&D investment in development

of new plant varieties.



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New Policy on Seed Development

(NPSD)

O New Policy on Seed Development (NPSD), 1988 was formulated with a

view to provide the best planting material available abroad to Indian

farmers.

O import of seeds under various categories such as coarse cereals, pulses,

seeds of vegetables, flowers, etc. to improve agricultural production and

productivity.

O The policy permits an initial import of small quantity of cereals, oilseeds,

pulses, etc. for in-house trial by importer and multi location testing under

All India Coordinated Trials of ICAR.



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OECD Seed Scheme

O The objective of the Organization for Economic Cooperation and

Development (OECD) Seeds Scheme is to encourage use of seeds of

consistently high quality in participating countries.

O Indiasparticipation in the OECD Seed Scheme was accepted by the

OECD in 2008 in respect of five seed schemes viz.

o (i) Grasses and Legumes

o (ii) Cereals

o (iii) Crucifers and other oil and fiber species,

o (iv) Maize and Sorghum and

o (v) Vegetables.



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Production and consumption of Seeds

in Indiayear Production of

Breeder seeds

(in Thousand

Quintals)

Production of

Foundation

seeds

(in lakh Qtls)

Distribution of

certified

/quality seeds

(in Lakh Qtls)

1991-92 3.75 34.9 57.5

1995-99 4.76 43.36 69.9

2001-01 5.91 42.69 86.27

2005-06 7.4 68.64 126.75

2009-10 10.5 105 257.11

2010-11 17.53 119.21 277.3

Source: Directorate of economics and statistics, DACAgricultural (Input & Output) Marketing


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All India Position of Requirement &

Availability of Quality Seed(2010)

Year Requirements

(In Lakh

Quintal)

Availability

(In Lakh

Quintal)

Surplus

(In Lakh

Quintal)

2006-07 128.76 148.18 +19.42

2007-08 180.74 194.31 +13.57

2008-09 207.28 250.35 +43.07

2009-10 249.12 279.72 +30.60

1010-11 290.76 321.36 +30.60

2011-12 330.41 353.62 +23.21



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National Seeds Policy, 2002O The policy aims at enhancing food production targets achievable by

enhancing, the Seed Replacement Rates (SRR).

O The policy aims at creating an enabling climate for growth of a competitive

and vibrant seed industry, encouraging import of useful germplasm and

boosting exports.

O The thrust areas are varietal development and plant variety protection, seed

production,quality assurance, creation of infrastructure for seeds,transgenics, import of planting material,export of seeds and promotion of

domestic seed industry.



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The Seeds Bill, 2004O aims to regulate the quality of seeds and planting material of all

agricultural, horticultural and plantation crops to ensure availability of

true to type seeds to Indian farmers:

curb the sale of spurious,

poor quality seeds ;

protect the rights of farmers;

increase private participation in seed production

distribution and seed testing;

liberalize import of seeds and planting materials



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CHALLENGES

O There is a mismatch between the seed multiplication ratio from breeder

seed to foundation seed and from foundation seed to certified seed.

O Comprehensive and authentic databases on seed production and trade

need to be built up.

O The seed chain and the norms for quality control to be followed without

any compromises or shortcuts.

O For horticulture crops which have a long gestation period , it is imperative

to ensure that only such varieties are imported that are suited to Indian

conditions.



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Fertilizers

O macronutrients (6): nitrogen, phosphorus, potassium, sulphur, calciummagnesium -,

present in plant tissue in quantities from 0.15% to 6.0% of dry

matter

O micronutrients (8) : Molybdenum, Nickel, Copper, Zinc, Manganese, Iron,

Boron, chlorine -

present in plant tissue on the order of parts per million (ppm),

ranging from 0.15 to 400 ppm DM, or less than 0.04% DM

O All nutrients fulfill specific functions in plants and cannot replace each other

All of them are equally important, regardless of the amount required

physiologically

Lack of any single nutrient will limit crop growth even if all the other

nutrients are fully available

supply of all nutrients is essential to produce high yields of good quality



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Global consumption of fertilizer

The global fertilizer market

2010US$ 130 billion ; Volume163 mt

2015US$ 172 billion ; Volume: 183.5 million tons

Indian fertilizer market

2010US$ 24 billion ;Volume 28 mt



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O Source: Coramandel, 2011

Global NPK market

Consumption growing at 2.0 - 2.2%.

World NPK increased by 11% in 2009 and

sales by 13% mainly due to K sales

India and China account for 40% of global

consumption

Regionally concentrated availability:N in Middle East, USA & FSU

P in North/West Africa, USA & Jordan

K in Canada, FSU & Middle East

Source: Coramandel, 2011



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Global demand-

supply situation for important fertilizers

Globally, the fertilizerdemand-supply

scenario is

comfortable with

supply exceeding

demand.

Indian situation is

different: by 2015,

India is expected to

face a demand-supply

deficit of 8-9-mt of

urea

Indian industry can

setup plants abroad to

meet demand



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Consumption, Production & Imports of Fertilizers


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India: fertilizer use and crop production

O Use of fertilizer started in India with initiation of the planning process inearly fifties

O Food grain production increased from 74mt in 1966-67 to 241.56mt in 2010-

11

O India is the 2ndlargest producer of Nitrogenous fertilizer and 3rdin

production of phosphate fertilizerO Potash is totally imported

O India is 2ndto China in Nitrogen and Phosphorous consumption

O Fertiliser consumption in India is 16% ofglobal consumption

O Consumption chemical fertilizers during 2010-11 is 28.2 mt (16.6 mt N ,8.1

mt P & 3.5 mtK)

O Average consumption increase from 95 kg/ha in 2004-05 to 144.6kg/ha in

2010-11



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Contd.

0

20

4060

80

100

120

140

1951

-52

1956

-57

1959

-60

1962

-63

1965

-66

1968

-69

1971

-72

1974

-75

1977

-78

1980

-81

1983

-84

1986

-87

1989

-90

1992

-93

1995

-96

1998

-99

2001

-02

2004

-05

2007

-08(P)

NPK(Kg/ha)

9%

5%

3%

4%

2.00%

5%

Rice 37%

Wheat 24%

Food Grain 8%

Pulses 3%

Oil Seeds 9%

Sugarcane 5%

Cotton 3%

Vegetable 4%

Fruits 2%

Others 5%

Rice

37%

Wheat

24%

Food Grains

8%

Pulses

3%

Oil Seeds

9%

Sugarcane

5%

Cotton

3%

Vegetables

4%

Fruits

2% 5% Rice

Wheat

Food Grains

Pulses

Oil Seeds

Sugarcane

Cotton

Vegetables

Fruits

Others

0

3

6

9

12

1950 1960 1970 1980 1990 2000 2010

Year

N,

PandK(M

t)

0

50

100

150

200

250

Foodgrain(M

t)

N

P

K

Food grain

Urea consumption increased from

1.1 MT to 28 MT during 1966-2010

Rice and wheat account for more

than 60 percent of consumption

> 1/3 for rice

Nutrient Demand growth rate:

N : 3%

P : 6%

K : 5%



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Declining NUE in India



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Fertilizer (Control) Order, 1985:

administered by Deptt. of Agriculture &Cooperation, Govt. of India

issued under the Essential Commodities Act, 1955.

Customized fertilizer of 36 grades and 9 fortified fertilizer have been included

5 bio fertilizer( rhizobium, azotobacter , azospirilllum , phosphate solubilizing bacteria ,

mychorrhizae) and 3 organic fertilizer(castor de-oiled cake , city waste and vermi-compost)

have been included

defines:what substances qualify for use as fertilizers in the soil

product-wise specifications

methods for sampling and analysis of fertilizers

procedure for obtaining license/registration as manufacture/dealer in

fertilizers and

price fixation: fix maximum sale prices (MRP) of fertilizersuniform across

the countryto ensure fair access and price to farmers

Urea is the only fertilizer which is under price, distribution & movement control

through (FCO) & Fertilizer Movement (Control) Order; Production and subsidy

disbursement is regulated under Retention Price Scheme (RPS) administered by

Fertilizer Industry Coordination Committee (FICC).

Fertilizer Policy



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Impact of fertilizer subsidy



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Nutrient Based Subsidy (2010)



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NBSsubsidy rates 2010-11 on nutrients and

products



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Advantages of NBS for industry



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PESTICIDES



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O Pesticides are substances or mixture of substances intended for preventing,

destroying, repelling or mitigating any pest.

Pesticides are of major attention in India because

Increasing demand for food grains.

Decreasing per capita land available for agriculture.

Low crop yield in India.

Estimated crop loss in India due to non usage of agro chemicals amount to Rs90,000 cr p.a. (28% of yield).

Per hectare consumption of pesticide in India is 381gm which is low as

compared to the world average of 500 gm

INTRODUCTION



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72

61

4340 42

55

0

10

20

30

40

50

60

70

80

Consumption of pesticides inIndia (Thousand tonnes)

Source: Directorate

of Economics and

Statistics, DAC

During Financial Year 2006 , production of pesticides dropped mainly due

to lower intake in cotton crop which typically consumes the highest

proportion of pesticides.



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PesticideIndustry overview

It is mainly consolidated to top 9

companies accounting for over 80%

of market

Buyers have little choice but to buy

the products from the same

suppliers (eg. Monsanto engineers

seeds that are tolerant only to its

own herbicides to bridge its

pesticides (crop protection) andseed businesses, increasing

customers dependence on

its products.



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Market distribution of Agrochemicals in

India by product category(% of total)

With increasing penetration of BT cotton ,usage of insecticides haswitnessed a decline in the recent past. Its share in the total crop

protection chemicals has reduced from 69% in 2004 to 55% in 2009.

2004 2009



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Crop wise pesticides consumption

(%of total)

paddy28%

cotton20%

vegetables

14%

fruit

6%

wheat6%

pulses

5%

oilseeds5%

others16%

cotton33%

paddy24%

fruits&vegetables

21%

wheat

8%

pulses&oilse

eds8%

others6%

2005


2009

Introduction of Bt cotton, pesticide usage on cotton decreased

from 33% to 20% in 2009,while in paddy increased popularity

of hybrid varieties of rice lead to increased usage of

pesticides.


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Computerized Online Pesticide Registration System A computerized online pesticide registration system was introduced in

July 2008 in the Secretariat of central Insecticides Board and

Registration Committee (CIB&RC), Faridabad.

The system enables pesticide companies to apply for registration of

pesticide products and receive any query about deficiencies online.

Accreditation of Pesticide Analysis

LaboratoriesTo ensure greater quality assurance in the pesticide analysis by notified

laboratories under the Insecticides Act,1968,the Central InsecticidesLaboratory and both Regional Pesticides Testing Laboratories have

obtained accreditation from the National Accreditation Board for testing

and Calibration Laboratories (NABL).

Major policy advancement & further roadmap



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Intensive pest Surveillance and ManagementIn response to major pest attacks in recent years ,some states have

implemented intensive pest surveillance and management systems for

major crops vulnerable to pests and diseases under Rashtriya KrishiYojana (RKVY),e.g.,Maharashtra in 2009 (for soyabean and pulses) and

Orissa in 2010 (for Rice).

Contd.



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Capacity Building - National Institute of Plant

Health Management

Capacity Buiding is an important area in Plant protection. TheNational Plant Protection training Institute (NPPTI),Hyderabad

was converted in to a society in 2008 to give it more autonomy for

human resource development in bio-security.

The institute, renamed as the National Institute of Plant Health

Management(NIPHM),is headed by a Director General.

Contd.



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Online plant quarantine services have been introduced in January 2011 to

enable exporters to apply for a phytosanitary certificate and importers to apply

for import permit and release order online. Of the plant quarantine work, 93 %

now being conducted online.

Round the clock (24x7) plant quarantine services have been introduced atChennai, Mumbai and New Delhi.

Phytosanitary certificates with standard format and enhanced security features

have been introduced to prevent fraud.

Five major Regional Plant Quarantine Stations (RPQS) located at Amritsar,

Chennai, Kolkata, Mumbai and New Delhi have secured ISO 9001:2000

certification, an international standard for an organizations quality

management system.

Upgrading Plant Quarantine services



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Pesticides regulations

O The Insecticides Act,1968

O Prevention of Food Adulteration Act,1954

O Water (Prevention & Control of Pollution) Act,1974

O Air (Prevention & control of Pollution) Act,1981O Hazardous wastes (Management & Handling) Rules,1989

O The Environment protection Act,1986

O Bureau of Indian Standards Act



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Farm Mechanization



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Why Farm Mechanization

O Labour is available at a higher cost per hectare and this would

increase the demand for mechanization.

O India is a growing economy and to support a growingpopulation we would require not only efficient but machinery

that would increase the yield of food grains and commercial

crops.

O Mechanical power has replaced bullock power on Indian

farms..



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Evolution of Indian Agricultural

Machinery

Processes Traditional Practice Current Practice

Land Development

Tillage

Seedbed preparation

Plough, Blade

Harrow

Tractors

Mould Board Plough

Power Tiller

Sowing & Planting Dibblers Seed DrillZero Till Seed-cum-Fertilizer

Drill

Weeding Hand Hoes, Animal

driven Weeding

Tools

Power Weeder

Plant Protection Dusters, HandSprayers

BlowerPower Spray

Harvesting & Threshing Sickle, AnimalTrampling

Self Propelled Harvesters

Tractor mounted

Harvesters

Threshers



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ADVANTAGES

Increase in crop intensity and yield thusensuring better returns to the farmer

Reduction of weather risk and risk of non-availability of labor thus minimizing postharvest wastages

Improved working conditions and enhancedsafety for the farmer

Conversion of uncultivable land to agriculturalland through advanced tilling technologies

Shifting land used for feed and fodder

cultivation for draught animals towards foodgrain production

Increased rural employment.

ISSUES AND CHALLENGES

Highly diverse farm size & soil types:resulting in the need for customized farm

machinery and equipment. Skewed and seasonal usage resulting in low

economic viability

Cattle population: Increased mechanisationresults in surplus draught cattle and theirupkeep is a concern for the farmers.

Extension service: Education and training for

efficient usage of farm equipment is requiredto be imparted along with knowledge aboutselection of appropriate machinery.

Economic Advantage of Mechanization(%)

Increase in Productivity 12-34

Saving in seeds 20Saving in Fertilizers 15-20

Enhancement in cropping intensity 5-22

Increase in gross income of farmer 29-4

Source: report on Agricultural Implements and Machinery, GOI



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CUSTOM

HIRING

Less Farm HoldingsHigh Cost of machineries

Scattered FarmsPoor purchasing power of

Farmers

Custom Hiring, allows a farmer to gain short- term control of a combine

without investing a large amount of capital.

Advantages:

No long term capital investment.

No repair costs.

No cost for operating and maintaining the machine.

Disadvantages:

Unavailability of competent operator nearby.



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49

Market size: Approximately 370 000 units annually

Market growth: 4-5% per annum

Price sensitive market; sales dependant on Government subsidy; no subsidy on

tractors above 30 HP

Domestic sector growing due to an increase in the irrigated area, Government policy

related to export which decides crop switching by farmers

Smaller tractors are very popular (35-40 HP); this is the fastest growing segment

one third are for non agricultural uses i.e. for transport and haulage

Low Penetration Level: 17 for every 1000Hectares

Major brands:

Market - Tractors

Source: Italian Trade Commission, 2010Agricultural (Input & Output) Marketing


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50

0

50000

100000

150000

200000

250000

300000

1

982-83

1

984-85

1

986-87

1

988-89

1

990-91

1

992-93

1

994-95

1

996-97

1

998-99

2

000-01

2

002-03

2

004-05

year

tractors

0

2000

4000

6000

8000

10000

12000

1400016000

18000

20000

powertillers

tractors power tillers

Machinery

demand driven by development,labour scarcity, infrastructure, services

improved equipment tools contribute to

savings in seeds (20%), fertilizers

(20%), time (20-30%) and labour (20-

30%)

steady growth of manually operated

tools: drills, cutters, sprayers,

threshers

growth in animal operated equipment:

ploughs, disc harrows, drills, puddlerssteady growth in mechanical and

electrical power operated equipment:

pump sets,sprayers, ploughs/drills,

threshers, combines

India largest manufacturer of tractors

(>60% < 60hp)

Annual sale of tractors: 2.5 lakh



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IRRIGATION

O Irrigation potential is about 140 mha.

O 58.4mha from major and medium irrigation sources, and 81.5mha from minor irrigation sources.

O Ground water provides 70% of irrigation water.

Challenges:

O Persistent gap between the assessed ultimate irrigation potentialand actual potential that has been put to use.

O Inefficient water use in irrigation is leading to environmentaldegradation via waterlogging.

Efficiency in systems needs to be upgraded from present level.

Methods of Micro-irrigation should be taken in use for betterutilisation of water.

It include Drip and Sprinkler irrigation system.



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Market Share of major Irrigation

Companies in India

Jain Irrigation55%

Netafim25%

NagarjunaGroup

6%

ParikshitIndustries

5%

PremierIrrigation

3%

EPC3%

others3%

Jain Irrigation and Netafim constitute 80% of market share

The size of the market for micro

irrigation systems, is around Rs

3,000 crore in India.(http://articles.economictimes.indiatimes.com/2011-07-

31/news/29835726_1_oil-palm-sprinkler-irrigation-agri)

Jain Irrigation: 1650 crores

Netafim: 750 crores

Source: FICCI(Federat ion of Indian Chambers and Comm erce and

Industry)

http://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agrihttp://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agri


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Introduction

O India level, approximately 60 percent of the rural labour force

and 45 percent of the urban labour force is self-employed.

O Rural casual labour constitutes the single largest segment of

the total workforce in India. Among rural casual labourers,

agricultural labourers occupy a predominant position.

O The rural agricultural wage rate, hence, is considered as one

of the most robust indicators of economic well-being, not only

of agricultural labourers, but also of the overall rural

population.


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Agriculture & Labour

O

Agriculture is a labour intensive activity.O Cost of cultivation data shows that labor accounts for more than 40

percent of the total variable cost of production

O Raising the wage levels of casual workers both in agriculture and non-

agriculture sectors needs adequate policy attention. In this regard, stricter

implementation of the Minimum Wages Act, 1948 and targetedemployment generation programmes are important.

O Agricultural wages have been traditionally low due to low productivity,

large disguised unemployment in agriculture due to lack of sufficient

employment opportunities elsewhere.

O In recent years there is a perceptible change in this trend due to rapideconomic growth and adoption of policies for employment generation

including promotion of self employment opportunities.


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MGNREGA

O MGNREGA, enacted on September, 2005O Provides for the enhancement of livelihood security of the households

in rural areas of the country by providing at least one hundred days of

guaranteed wage employment.

O It has prevented distress migration and helped in empowerment of

women.

O It has also led to a substantial increases in the wage rates of agricultural

and non-agricultural laborers, reduced the availability of labour for

agricultural operations and increased the cost of cultivation.

O Major policy measures influencing the wage increase are MNREGA

and Minimum Wages Act implemented by the government.


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AGRICULTURAL CREDIT


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According to Samuelson

Credit is the use of someone elses funds in exchange for a promise to

pay with or without interest at a later date

Farm Credit or Agriculture Credit is the count of loan or Credit

obtained form any source for the promotion & development of

Agriculture

What is Credit?


59/72

Problems of Agriculture Credit

Small Units

Damage to crops & Land

Low & Uncertain yields & incomes

Lack of Credit worthiness & Security Small & large cultivators

Unproductive uses

High Cost

Limited flow of Capital to Small Farmers

Delayed disbursement of Credit


60/72

Measures to Solve thoseProblems

Agriculture Credit Institutions

Agriculture Credit Advisory Committee (1972)

Special Schemes (1977 extend credit amount)

Recovery of Loan

Finance in kind & supervised

Pass Book System


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Sources of institutional Agricultural

credit percentage

39%

8%

53%

0.2%

2000-01

co-operativebank

RRBs

Commercialbanks

other agencies

16%

10%

74%

0%

2010-11

co-operativebank

RRBs

Commercialbanks

other agencies


62/72

ROLE OF NABARD IN CREDIT

NABARD Would facilitate the formation and financing of group of tenantfarmer by organizing them into Tenant farmer group.

The objective of the scheme is to provide crop loan through institutional

agencies to tenant farmers, oral lessees and share croppers, who are not

being extended credit support.

NABARD would extend refinance support to RRBs and state cooperative

Bank/District central cooperative Bank to the extent of 100% of the loan

provided by the Bank to the TFGs.

NABARD is facilitating implementation of SHG-bank linkage programme

through commercial NGOs, state government departments, farmers club,

individual rural volunteers, etc. since 1992 onwards.


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Role of Vaidyanathan committee

O On the basis of recommendations made by the Vaidyanathan committee

task force , the government of India had approved a Revival package for

short term Co operative credit structure (STCCS) aimed at making it a

well managed and vibrant structure to rural India.

O Revival package(13,597crore) seeks namely to (1) provide financial

assistance to bring the system to an acceptable level of health.(2)

introduce legal and institutional reforms necessary for their democratic,

self-reliant and efficient functioning, (3) Take measure to improve the

quality of management as an integrated package.


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Agricultural Debt waiver and Debt reliefscheme (ADWDRS) 2008

O The main aimed of ADWDRS at de-clogging the lines of credit that were choked

due to the debt burden on the farmers and to entitle these farmers for fresh credit.

O All Agricultural loans disbursed by public sector Banks, private sector bank ,

cooperative bank, local area bank, and regional rural banks between 1stApril ,1997

to 31 March, 2007 to farmers overdue as on 31 December 2007 and remaining

unpaid up to 28 february,2008 were eligible for Debt waiver Debt relief.

O For marginal farmers there was a complete waiver of loans that were over due on

31,December 2007 and which remained unpaid until 29 February ,2008.

O In respect of other farmer, there was a provision for One time settlement (OTS)

scheme for all loans that were over due on December 31, 2007 and which

remained unpaid until February 29 ,2008


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KISAN CREDIT CARD

O One of the major challenges in the sector has been ensuring the provision

of timely and adequate credit to the farmers.

O An innovative strategy conceived in 1991 by the GOV of India created the

kisan credit cards(KCC) through which farmers could avail short term loan

for crops from Bank.O The scheme was initiated in consultation with the Reserve Bank of India ,

NABARD, and by the end of October, 2011 10.78 crore KCC were issued .

O It is essentially a type of revolving cash credit facility with withdrawals and

repayment to meet the production credit needs, cultivation expenses and

contingency expenses of the farmers.


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CROP INSURANCE


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Objectives of Crop Insurance

O To provide insurance coverage and financial support to the farmers in theevent of prevented sowing & failure of any of the notified crop as a result ofnatural calamities, pests & diseases.

O To encourage the farmers to adopt progressive farming practices, high value

in-puts and higher technology in Agriculture.

O To help stabilize farm incomes, particularly in disaster years.


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Existing Crop Insurance Schemes

I. NAIS: yield based; non-actuarial premium except horticultural crops /

annual commercial crops; underwriting of losses by Central & State

Govt. on 50:50 ratio

II. WBCIS: Weather-based Crop Insurance Scheme is intended to provide

insurance protection to the farmers against adverse weather incidence.

III. CPIS: plant based; actuarial premium

IV. MNAIS: yield based; actuarial premium with premium subsidy shared

equally by Central & State Govt.


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NATIONAL AGRICULTURAL INSURANCE

SCHEME (NAIS)

O For improving the scope and content of CCIS a broad based NAIS was

introduced from Rabi 1999-2000.

O NAIS provides for greater coverage of farmers, crops and risk commitment.

O Premia-structure has been rationalized and the scheme is required to operate at

smaller unit area of insurance.

O Subsidy to Small and Marginal farmers.

O It is presently being implemented by 25 States & 2 Union Territories


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MNAIS- Present Status

O Implemented in 34 districts covering 22 Statesduring Rabi 2010-11 seasonO The scheme would be on actuarial regime in which insurance company will

receive premium on commercial basis and will be responsible for all claims

O GOI & State Govts. will provide premium subsidy upto a max. of 75% atdifferent slabs of actuarial premium to make the scheme affordable for

farmers

O The coverage in Pilot MNAIS is expected to 25% of total farmers of 50

districts.


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Challenges

share in total credit for cultivatorhousehold was only 61 percent in

2002. This shows that the cultivator

households are not able to come out of

the clutches of money lenders and

other non-institutional sources.

It is also reported that only 27 percentof the total number of cultivator

households received credit from

formal sources while 22 percent

dependent on informal sources. The

remaining households, comprising

mainly small and marginal farmers,

had no credit outstanding.

Comprehensive new measuresare needed in terms of innovative

products and services to increase

access to institutional credit.

Complex documentation

processes and high transaction

cost in taking loans require

attention.

It is highly desirable to provide a

KCC to all farmers in the country

and to raise credit the limit, from

time to time as needed.

The Way Forward


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