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Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
Agri Input marketing
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Agri Input marketing

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This includes scenario of Industries like Seed, Fertilizers ,Pesticides & Farm equipment which is core of Indian Agriculture.

This includes scenario of Industries like Seed, Fertilizers ,Pesticides & Farm equipment which is core of Indian Agriculture.

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  • 1. Farm Inputs & Management Presented by- Neethish Varghese(1214) Pankaj Agarwal(1215) Shashank(1218) Yogesh Singh Rana(1224) Agricultural (Input & Output) Marketing
  • 2. Key Inputs seed fertilizer Pesticide Farm Power Machinery Credit & wage Rate Farm Inputs Agricultural (Input & Output) Marketing
  • 3. 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 SEED GENERATIONS NUCLEUS SEED BREEDER SEED FOUNDATION SEED CERTIFIED SEED Agricultural (Input & Output) Marketing
  • 4. Company turnover (In Million US$) Agricultural (Input & Output) Marketing
  • 5. Indian Seed Industry • Total Seed Industry is worth about 8000 – 9000 crores. • Private sector accounts for 70% turnover in seed. • Almost 1/3 companies have a global technology/financial partner. • Private seed companies are spending 10 – 12% 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. Agricultural (Input & Output) Marketing
  • 6. Key Players in Indian MarketCompany 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 vegetables Advanta 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 9000 SOURCE: Seed division of DAC Indian Company & it’s Turnover Agricultural (Input & Output) Marketing
  • 7. Seed Replacement Rate Agricultural (Input & Output) Marketing
  • 8. 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. horticultural crops, 31% maize, 15% herbage crops, 12% beet, 8% potato, 11% wheat, 2% other agri crops, 21% Source: seed association of India Agricultural (Input & Output) Marketing
  • 9. 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 breeder’s rights, thereby stimulating R&D investment in development of new plant varieties. Agricultural (Input & Output) Marketing
  • 10. 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. Agricultural (Input & Output) Marketing
  • 11. 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 India’s participation 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. Agricultural (Input & Output) Marketing
  • 12. Production and consumption of Seeds in India year 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
  • 13. 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 Agricultural (Input & Output) Marketing
  • 14. National Seeds Policy, 2002 O 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. Agricultural (Input & Output) Marketing
  • 15. The Seeds Bill, 2004 O 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 Agricultural (Input & Output) Marketing
  • 16. 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. Agricultural (Input & Output) Marketing
  • 17. THE WAY FORWARD O A genetically diverse portfolio of improved crop varieties needed. O Timely delivery to farmers of high-yielding varieties requires big improvements in the system that connects plant germplasm collections, plant breeding and seed delivery. O Improving policies and legislation for variety development and release as well as seed supply. O Enactment of flexible variety release legislation. O Strengthening capacity by creating a new generation of skilled practitioners to support enhanced breeding. O Working with farmers to explore the ways in which crops and varieties contribute to successful intensification O Revitalizing the public sector and expanding its role in developing new crop varieties. Agricultural (Input & Output) Marketing
  • 18. Fertilizers O macronutrients (6): nitrogen, phosphorus, potassium, sulphur, calcium magnesium -, 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 Agricultural (Input & Output) Marketing
  • 19. Global consumption of fertilizer • The global fertilizer market 2010 – US$ 130 billion ; Volume – 163 mt 2015 – US$ 172 billion ; Volume: 183.5 million tons • Indian fertilizer market 2010 – US$ 24 billion ;Volume 28 mt Agricultural (Input & Output) Marketing
  • 20. 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 Agricultural (Input & Output) Marketing
  • 21. Global demand- supply situation for important fertilizers •Globally, the fertilizer demand-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 Agricultural (Input & Output) Marketing
  • 22. Consumption, Production & Imports of Fertilizers
  • 23. India: fertilizer use and crop production O Use of fertilizer started in India with initiation of the planning process in early fifties O Food grain production increased from 74mt in 1966-67 to 241.56mt in 2010- 11 O India is the 2nd largest producer of Nitrogenous fertilizer and 3rd in production of phosphate fertilizer O Potash is totally imported O India is 2nd to 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 Agricultural (Input & Output) Marketing
  • 24. Contd. 0 20 40 60 80 100 120 140 1951-521956-571959-601962-631965-661968-691971-721974-751977-781980-811983-841986-871989-901992-931995-961998-992001-022004-05 2007-08 (P) NPK(Kg/ha) 9% 5% 3% 4% 2.00% 5% Rice 37% Wheat 24% Food Grains 8% Pulses 3% Oil Seeds 9% Sugarcane 5% Cotton 3% Vegetables 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% Others 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(Mt) 0 50 100 150 200 250 Foodgrain(Mt) 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% Agricultural (Input & Output) Marketing
  • 25. Declining NUE in India Agricultural (Input & Output) Marketing
  • 26. 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 fertilizers – uniform across the country – to 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 Agricultural (Input & Output) Marketing
  • 27. Consequences of subsidy policy – declining yield response Reasons for declining response • Inadequate and imbalanced fertilizer use • Increasing multi-nutrient deficiency • Lack of farmers awareness about balanced plant nutrition • Lack of varietal breakthrough • Poor crop management • Declining organic matter in the soil Source: IFFCO/Salhotra, 2011 Agricultural (Input & Output) Marketing
  • 28. Impact of fertilizer subsidy Agricultural (Input & Output) Marketing
  • 29. Nutrient Based Subsidy (2010) Agricultural (Input & Output) Marketing
  • 30. NBS – subsidy rates 2010-11 on nutrients and products Agricultural (Input & Output) Marketing
  • 31. NBS – subsidy rates 2010-11 on freight Agricultural (Input & Output) Marketing
  • 32. Advantages of NBS for industry Agricultural (Input & Output) Marketing
  • 33. PESTICIDES Agricultural (Input & Output) Marketing
  • 34. 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 Rs 90,000 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 Agricultural (Input & Output) Marketing
  • 35. Pesticide Industry 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”) and seed businesses, increasing customers’ dependence on its products. Agricultural (Input & Output) Marketing
  • 36. Market distribution of Agrochemicals in India by product category(% of total) With increasing penetration of BT cotton ,usage of insecticides has witnessed 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 Agricultural (Input & Output) Marketing
  • 37. Crop wise pesticides consumption (%of total) paddy 28% cotton 20% veget ables 14% fruit 6% wheat 6% pulse s 5% oilsee ds 5% others 16% cotton 33% paddy 24% fruits &vege tables 21% wheat 8% pulses &oilse eds 8% others 6% 2005 Agricultural (Input & Output) Marketing 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.
  • 38. 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 Laboratories To ensure greater quality assurance in the pesticide analysis by notified laboratories under the Insecticides Act,1968,the Central Insecticides Laboratory 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 Agricultural (Input & Output) Marketing
  • 39. Intensive pest Surveillance and Management In 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 Krishi Yojana (RKVY),e.g.,Maharashtra in 2009 (for soyabean and pulses) and Orissa in 2010 (for Rice). Contd. Agricultural (Input & Output) Marketing
  • 40. Capacity Building - National Institute of Plant Health Management • Capacity Buiding is an important area in Plant protection. The National 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. Agricultural (Input & Output) Marketing
  • 41. • 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 at Chennai, 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 organization’s quality management system. Upgrading Plant Quarantine services Agricultural (Input & Output) Marketing
  • 42. 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,1981 O Hazardous wastes (Management & Handling) Rules,1989 O The Environment protection Act,1986 O Bureau of Indian Standards Act Agricultural (Input & Output) Marketing
  • 43. Farm Mechanization Agricultural (Input & Output) Marketing
  • 44. 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 growing population 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.. Agricultural (Input & Output) Marketing
  • 45. 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 Drill Zero Till Seed-cum-Fertilizer Drill Weeding Hand Hoes, Animal driven Weeding Tools Power Weeder Plant Protection Dusters, Hand Sprayers Blower Power Spray Harvesting & Threshing Sickle, Animal Trampling Self Propelled Harvesters Tractor mounted Harvesters Threshers Agricultural (Input & Output) Marketing
  • 46. ADVANTAGES  Increase in crop intensity and yield thus ensuring better returns to the farmer  Reduction of weather risk and risk of non- availability of labor thus minimizing post harvest wastages  Improved working conditions and enhanced safety for the farmer  Conversion of uncultivable land to agricultural land through advanced tilling technologies  Shifting land used for feed and fodder cultivation for draught animals towards food grain 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 mechanisation results in surplus draught cattle and their upkeep is a concern for the farmers.  Extension service: Education and training for efficient usage of farm equipment is required to be imparted along with knowledge about selection of appropriate machinery. Economic Advantage of Mechanization(%) Increase in Productivity 12-34 Saving in seeds 20 Saving 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 Agricultural (Input & Output) Marketing
  • 47. CUSTOM HIRING Less Farm Holdings High Cost of machineries Scattered Farms Poor 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. Agricultural (Input & Output) Marketing
  • 48. 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
  • 49. 50 0 50000 100000 150000 200000 250000 300000 1982-83 1984-851986-871988-891990-911992-93 1994-951996-971998-992000-012002-03 2004-05 year tractors 0 2000 4000 6000 8000 10000 12000 14000 16000 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, puddlers • steady 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 Agricultural (Input & Output) Marketing
  • 50. IRRIGATION O Irrigation potential is about 140 mha. O 58.4mha from major and medium irrigation sources, and 81.5 mha from minor irrigation sources. O Ground water provides 70% of irrigation water. Challenges: O Persistent gap between the assessed ultimate irrigation potential and actual potential that has been put to use. O Inefficient water use in irrigation is leading to environmental degradation via waterlogging. Efficiency in systems needs to be upgraded from present level. Methods of Micro-irrigation should be taken in use for better utilisation of water. It include Drip and Sprinkler irrigation system. Agricultural (Input & Output) Marketing
  • 51. Market Share of major Irrigation Companies in India Jain Irrigation 55% Netafim 25% Nagarjuna Group 6% Parikshit Industries 5% Premier Irrigation 3% EPC 3% others 3% 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(Federation of Indian Chambers and Commerce and Industry) Agricultural (Input & Output) Marketing
  • 52. Presentation on Agricultural Wages and Labour
  • 53. 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.
  • 54. 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 targeted employment 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 rapid economic growth and adoption of policies for employment generation including promotion of self employment opportunities.
  • 55. MGNREGA O MGNREGA, enacted on September, 2005 O 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.
  • 56. AGRICULTURAL CREDIT
  • 57. According to Samuelson “ Credit is the use of someone else’s 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?
  • 58. 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
  • 59. Measures to Solve those Problems • Agriculture Credit Institutions • Agriculture Credit Advisory Committee (1972) • Special Schemes (1977 extend credit amount) • Recovery of Loan • Finance in kind & supervised • Pass Book System
  • 60. Sources of institutional Agricultural credit percentage 39% 8% 53% 0.2% 2000-01 co-operative bank RRBs Commercial banks other agencies 16% 10% 74% 0% 2010-11 co-operative bank RRBs Commercial banks other agencies
  • 61. ROLE OF NABARD IN CREDIT • NABARD Would facilitate the formation and financing of group of tenant farmer 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.
  • 62. 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.
  • 63. Agricultural Debt waiver and Debt relief scheme (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 1st April ,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
  • 64. 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.
  • 65. CROP INSURANCE
  • 66. Objectives of Crop Insurance O To provide insurance coverage and financial support to the farmers in the event of prevented sowing & failure of any of the notified crop as a result of natural 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.
  • 67. 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.
  • 68. NATIONALAGRICULTURAL 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
  • 69. MNAIS- Present Status O Implemented in 34 districts covering 22 States during Rabi 2010-11 season O 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% at different 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.
  • 70. Challenges  share in total credit for cultivator household 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 percent of 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 measures are 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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