For those Indian Bankers who believe that Agribusiness is a profitable Banking

1. A hearty Welcome from
Maheshchandra Pathak
AGRIBUSINESS
AGRIBUSINESS
- Bankers’ point of view

2. A hearty Welcome from
Maheshchnadra Pathak
AGRIBUSINESS
PREAMBLE

3. In view of technological break-through in
agriculture, a transformation from traditional to a
commercial oriented developed agriculture is
eminent. This situation creates need for capital
investment in agriculture, besides creating working
capital
requirement
in
production, marketing, processing etc of the farm
produce .
So, there is, and will be, everlasting
- DEMAND for this production credit
That is Agribusiness for the Banks

4. FACTORS INFLUENCING
PRODUCTIVITY

5. 





Preparing land for cultivation
Use of improved planting
materials like
seeds etc.
Provision of irrigation facilities
Prevention
of
Soil
Erosion/
Soil
treatment/Soil reclamation
Use of Manures & Fertilizers
Plant Protection/Harvesting/Post harvest
activities/Storage/Marketing

6. 




Purchase of machinery/implements
like
Tractors/Threshers/Planters/ Harvesters
Implements to facilitate
post-harvesting
processing like
grading/packing/Transport
of
farm produce
Creation of MINOR Irrigation (source for
water/ water lifting device)
Prevention
of
Soil
Erosion/
Soil
treatment/Soil reclamation
PLANTATION/HORTICULTURE
Storage/Processing/Marketing

7. FOLLOW-UP

8. First follow up inspection should be conducted
at the time of sowing of the Crops. The visiting
official may also suggest the modern farming
techniques of raising the particular crop if
needed.
Second follow up inspection should be
conducted one and half months after the
sowing and in the middle of the cropping stage
in case of Sugarcane and other long duration
crops.

9. Third follow up inspection should be conducted
at the time of harvesting and marketing of the
Crops for recovery of loan
In case of failure of crops due to adverse
seasonal conditions, it should be examined
whether the Crop Loans can be converted into
Term Loan and suitable decision should be
taken immediately.

10. Main Crops and their Seasons

11. Season
Period
Sowing
period
Harvesting
period
Principal
Crops
Kharif
May
October
to Generally at the At the end of
beginning
of South
west
Southwest
monsoon (Sept.
Monsoon
to Oct. May
continue
till
January)
Paddy,
Jowar,
Bajra,
Ragi,
Groundnut, Maize,
Sugarcane
(duration
period
10-18
months
Eksali/Adsali
crops),
Cotton,
Tobacco
Rabi
Mid Oct.
Mid April
to At the beginning Feb. to April
of Cold weather
(May continue
till May in some
cases)
Wheat,
Barley,
Gram,
Mustard,
Peas,
Potato,
Pulses and oilseeds
Zaid
Beginning
Feb.
Beginning
May
of
Mid April to Cucurbits,
to At the beginning May
(May Maize
of of Hot weather
continue up to
June in some
cases)
Jowar,

12. FACTORS INFLUENCING
Viability
On-farm activities

13. There should be reasonable certainty that the
farmer will be able to derive the optimum
returns with existing/proposed infrastructure.
The Branch should have the basic information
about the crops generally grown seasonally in
the area, inputs required and their supply, cost
of cultivation under irrigated/dryland condition
and their yields.

14. 




Suitability
of
soil
and
climatic
conditions.
Irrigation facilities
Availability of required inputs.
Yield of the Crop
Whether
the
proposed
package
of
practices of particular crop conform to the
recommendations
of
Department
of
Agriculture.

15. 


Availability of processing and marketing
facilities for the crops.
The
managerial
ability
of
the
farmer/borrower
Whether
the
proposed
cost
of
cultivation of crops is realistic and in
conformity with scale of finance fixed by
the District Level Technical Committee

16. 

Cost of inputs and realizable income should be
worked out on the basis of the ruling prices for the
past 2-3 years and keeping in view the Government
policy (Minimum Support Price) in this regard
The estimates of production should be
realistically worked out for an average season
and not
under ideal conditions.
While working out the economics of a farm
holding generally, 50% of the gross income may
be expected to be available for
repayment
out of which 2/3rd could be
treated as
available for crop loan and 1/3rd
for
Term Loan installment.

17. KISSAN CREDIT CARDS
(Short-term working capital)

18. What is it?
A single window credit facility for providing
adequate and TIMELY credit to farmers for
meeting
their
cultivation
and
other
requirements as:
▫
▫
▫
▫
Cost of cultivation
Post harvest expenses
Consumption requirements for farmers’ household
Maintenance of farm assets, and activities allied to
agriculture

19. To whom?
▫ All eligible, willing, non-defaulter farmers
residing within the command area.
▫ Individual/ Joint borrowers who are owner
cultivators
▫ Tenant farmers/ Oral lessees & share Croppers.
▫ SHG or JLG farmers including Tenant farmers/ Oral
lessees & share Croppers

20. Eligible amount
In respect to farmers growing Single Crop
▫ Cost of cultivation as approved by District Level
Technical Committee (a)
▫ Add 10% of (a) above for post-harvest/ household
consumption requirement of the farmer (b).
▫ Add 20 % of (a – as discussed above) towards
expenses related to repairs and maintenance of farm
assets, Insurance of Crops/ assets/PAIS (c)
SUM TOTAL OF (a)+(b)+(c)
= LIMIT of KCC for 1st YEAR (d)

21. Eligible amount
In respect to farmers growing Single Crop
Limit as arrived at (d) { – discussed earlier } shall be
taken as the basis for arriving at limits for 2nd year
onwards.
▫ 10% addition of (d) may be taken as limit for 2nd year
and similar process can be replicated up to 5th year.

22. Eligible amount
In respect to farmers growing Single Crop
Limit as arrived at (d) { – discussed earlier } shall be
taken as the basis for arriving at limits for 2nd year
onwards.
▫ 10% addition of (d) may be taken as limit for 2nd year
and similar process can be replicated up to 5th year
(e).

23. Eligible amount
In respect to farmers growing Multiple Crops
Same procedure to arrive at Limit for rest of the period
as arrived at (d) { – discussed earlier } depending upon
the crops proposed to be cultivated
Rest as discussed at (e)
IT IS ASSUMED THAT FARMER (BORROWER) ADOPT THE
SAME CROPPING PATTERN FOR THE REMAINING
PERIOD OF 4 YEARS. IF CHANGED – THE LIMIT IS TO BE
RE-DONE

24. ILLUSTRATION (I)
FOR ARRIVING AT KCC LIMIT
(Mono-crop)
Assumptions:
 Land holding 1 acre
 Crop Kharif Paddy
 DLTC has decided Cost of cultivation ` 11,000.00 per
acre

25. Particulars
Cost of Cultivation Component
Add 10% towards post harvest/ HH exp
Amount
11,000.00
1,100.00
Add 20% towards farm maintenance
2,200.00
Assumptions:
Sub-Limit for 1st 1 acre
14,300.00
 Land holding year (Y-1)
 Crop Kharif Rabi
Sub-Limit for 2nd Year
 DLTC has decided Cost of cultivation
15,730.00
Add 10% in Y-1 (` 14,300.00 + ` 1,430.00) (Y-2) ` 11,000.00 per
acre
Similar procedure for Y -3, Y -4; and Y -5
Final Limit ( ` 20,930.00), Say
21,000.00

26. ILLUSTRATION (II)
FOR ARRIVING AT KCC LIMIT
(Multiple-crops)
Assumptions:
 Land holding 10 acre
 Crop Kharif Paddy (5 acre) Sugar cane (5 acre) Rabi
Groundnut (5 acre)
 DLTC
has
decided
Cost
of
cultivation
`
11,000.00,
` 22,000.00 & ` 10,000.00 per acre
respectively

27. Particulars
Cost of Cultivation Component
Add 10% towards post harvest/ HH exp
Amount
2,15,000.00
21,500.00
Add 20% towards farm maintenance
43,000.00
Assumptions:
Sub-Limit for 1st 1 acre
2,79,500.00
 Land holding year (Y-1)
 Crop Kharif Rabi
Sub-Limit for 2nd Year
 DLTC has decided Cost ` 27,950.00) (Y-2)
3,07,450.00
Add 10% in Y-1 (` 2,79,500.00 + of cultivation ` 11,000.00 per
acre
Similar procedure for Y -3, Y -4; and Y -5
Final Limit ( ` 4,09,200.00), Say
4,09,000.00

28. FACTORS INFLUENCING
Crop Insurance
(Issues are state specific)

29. • Compulsory for all loanee farmers availing
Seasonal Agricultural Operations loans for
Notified crops in notified area up to the availed
loans amount during specific period as notified
by the state.
• Optional coverage beyond loan amount may be
considered. They will be treated at par with
Non-loanee farmer w.r.t the cut off dates.
• Proof of land holding, Crops shown must for all
cases.

30. • Premium subsidy – 10% for farmers having Land
Holding of 2 Ha or less.
• For Seasonality Discipline is related to Cut off
date for submitting the proposal and Loaning
period eligible for coverage of all notified
Crops.
• For loanee farmers minimum sum insured will
be the crop loan component of KCC availed and
normal rate of premium

31. • For Non-loanee farmers normal rate of premium
will be applicable up to the value of threshold
yield and if farmer wants to extend the insurance
up to 150% of value of average yield, then for
balance amount, actuarial rate will be charged.
• Premium charged is normally 2.50% to 3.50% (For
Vegetable like Onion may go up to 5.05%)
• Maximum coverage is 150% of Average yield
• Other factors are – Level of Indemnity (normally
60-80%), Threshold yield etc.

32. FARM MECHANIZATION

33. •
•
•
•
FACTORS CREATING A NEED
Availability of Farm Labor (After effect of
MNREGS)
Deep ploughing/ Harrowing/Puddling/Thrashing
Transport/ Hiring
15 to 60 HP
Nature of soil, Particulars of farm operations,
Cropping patern, Crop type

34. FACTORS INFLUENCING
Viability of the Project

35. •
•
•
•
•
•
Income from own farm and transportation
Income from hire
Income from transportation of agricultural produce
Saving from Labor cost
Fuel/ Salary/ Maintenance & depreciation
Must be used at least 1800 hours in a year.

36. DAIRYING

37. Dairying plays an important role in the
development of agricultural economy of our
country. Arrangements for cross-breeding through
A.I of exotic breeds with establishment of
organized milk collection, processing and
distribution have encouraging effects.
BREEDS
BUFFALOES: Murrah, Jaffarabadi, Nilli Ravi, Mehsana etc.
COWS: Holstein Friesian, Jersey, Red Dane, Sindhi, Tharparkar,
Hariana, Sahiwal, Ongole, Gir, Kankrej etc.

38. Murrah is the most efficient milk with butterfat
producer in the country. A massive, medium,
sized, deep framed, black animal with tightly
curved horns. Average lactation is 1360 – 2250
Litres, (Normally 6-8 litres per day) with around
7% fat. Individual yielding up to 3,200 litres is
not UNCOMMON.

39. CHARACTERISTICS
Holstein Friesian normally yields 25 litres a day,
while Jersey yields around 8-10 litres a day.
While selecting any milch cattle, we need prefer
the animal who have wedge shaped appearance –
Black sparkling eyes, lean neck, udder should have
a good network of blood vessels. All four quarters
of the udder should be well demarcated and well
placed teats

40. FACTORS INFLUENCING
Viability of the Project

41. LOCATION
o Whether the environmental and climatic factors
suitable for Dairying?
o Proximity to marketing center and availability of
affordable transport facilities.
o Availability of Veterinary assistance/fodder/feed.
o Water supply
EXPERIENCE
 Past experience
 If existing, strength of dairy animals, their breed, age,
value, health, dry or milching.

42. 



Consumption pattern - potential
Milk-route/Chilling Plant/ Processing Plant
Fodder/Feed/Vet
Micro/Macro climate

43. PROPOSAL
o Whether the shed (if exiting – what type – face to face
or tale to tale) is adequate to accommodate the
existing as well as proposed animals?
o Capital expenditure on building/equipment/animals
o Estimates for feed and maintenance
o Who is going to manage (self or expert?)
o Marketing (strategies/target group/innovation)
o Economics – net surplus
o What are the stakes of the promoter?

44. Assumptions to arrive at
Economic Viability
Income from sale of milk 380+180 days (2 instalments
to maintain the continuity)
Income by sale of FYM
Income by sale of Calf
Total receipts – Total requirements – Interest – Principal
– Cattle Risk Fund (Suggestive only 25 paise per litre) =
Net surplus
During Dry period – may be reduced

45. POULTRY

46. 


For Egg production (Layers)
For Meat production (Broilers)
For DoC (Hatcheries)

47. Layers
Housing and purchase of DoC sexed with female chicks,
brooding them for nearly 4 weeks, rearing them as
growers from 5 to 22 weeks, feeding and maintaining
them as Layers, collecting, packing and marketing of
eggs upto 52-53 weeks, then culling of birds for meat
purpose.

48. Broilers
Housing and purchase of DoC for meat purpose, feeding
and rearing them up to 8 weeks, before their meat
becomes fibrous.

49. Hatchery
Highly sophisticated, requires considerable amount of
expertise and technical know-how. Aim is to produce
fertilized eggs and hatch them under controlled
climate for getting only desired type of chicks true to
the type. Involves rearing of male and female, parents
for production of fertilized eggs, grading them for their
suitability for hatching, testing during hatching and
finally producing only healthy desirable and true to the
type Chicks.

50. Hatchery
Take off point of poultry farming is DoC which is end product of the
Hatchery unit. Hatchery precedes poultry farming. Parent stock
should have a combining ability that the efficiency of egg/meat
production of their progeny is as desired by the farmer/consumer.
The success of hatchery depends on care taken in selecting the
parent male/female stock. Any error made in making the choice of
parent birds cannot be compensated by any other measures taken
at a subsequent stage. The parent stocks are to be reared properly
so that their level of egg production is always the Best. All the
eggs that are produced however are not suitable for hatching, as
the embryo might not be of appropriate size to develop into a
chick of high productivity. The eggs are required to be in settlers
for 18 days and hatchers for 3 more days for getting chicks culling
of week lings and sexing where necessary inoculation is done in
the DoC before marketing.

51. Items of finance
Capital Investment:






Construction of shed
Poultry equipments/Transport arrangement
Egg grading/storing room
Internal roads
Staff quarters
Fencing
Working Capital requirements
 DoC
 Feed
 Vaccines/Medicines
 Salaries & Wages
 Electricity/other office exigencies

52. FACTORS INFLUENCING
Viability of the Project

53. 
Proper layout – avoid heat wave/strong wind
and proper ventilation

DoC during brooding require additional heat.

Layers generally need 17 hours light

Feeds – one of the most important ingredient –
Chick-mesh (0-4 weeks), Grower-mesh (5-22
weeks) Layer-mesh after it starts laying. On an
average for the first 22 weeks feed requirement is
10 Kg per bird, 40-42 Kg during Laying period.

54.  Location of the project

Availability of clean water

Uninterrupted power supply

Availability of all inputs (Doc/Feed/Power/
Labor/Veterinary aid/transport) at a reasonable
price.

Laying begins by 18th week and reaches its
peak in the 28th week. Average production may
be safely taken around 80 % during the laying
period of 12 months.

55. ASSUMPTIONS
Economic Viability
 Construction of shed and building:





Grower/Brooder house 1000 sft for 1000 birds
Layer house 2000 sft for 1000 birds
Store 20’X10’
Electrical installations
Water connection/arrangements
Equipments
 Brooders/Waterers/Feeders/Laying pan etc.

56. Assumptions
Income from Sale of eggs
Income from Sale of droppings
Income by sale of culled Birds
Income by sale of gunny bags

57. FISHERIES

58. We
have
considerable
potential
for
development of both marine and inland
fisheries. More than 5000 KM of coastline for
marine fishing. Small water areas comprising
ponds and tanks cover around 15 Lakh ha.
Reservoirs and lakes provide another 20 Lakh ha
of cultivable water. This is in addition to long
stretch of rivers, irrigation canals and brackish
water lakes and esturies which also support fish
life of different varieties.

59. Fish and fish products are cheapest source of
animal protein in Indian economy. It provides
employment to fishermen, traders, mechanics,
transport operators and others. Valuable FX is
earned from export of Prawns/Lobsters/Tuna/
Pomfrets/Frog legs/Canned/dried fish etc.
Deep-sea Lobsters/Shrimps are in high demand
in international markets

60. MARINE FISHERIES
Inshore Fishing
Offshore Fishing
Deep sea Fishing
Inshore Fishing
Up to 10 fathoms from the sea coast – usually not
mechanized, Small sonnies, sea boats, catamarans are
used for inshore fishing

61. MARINE FISHERIES
Offshore Fishing
Fishing in areas between 10-40 fathoms depth. Wooden
boats (25-50 ft in overall length with 30-70 BHP
engines) are used.
Deep-sea Fishing
Fishing beyond 40 fathoms. Larger sized boats more
than 50 ft engines of 200 BHP (Normally 7-10 days
voyage) equipped with adequate storage of catch/
fuel/ fresh water and insulated for storage of ice
frozen fish etc.

62. OBJECTIVE
• Improvement of socio-economic standard of traditional
fishermen
• Entrepreneur must have requisite expertise, sufficient
experience, technical know-how.
• Items for finance are acquisition of boat/trawler/
accessories etc.
• Reclamation/ Repair of derelict Tanks/ marshy lands /
Fallow areas
• Raising of nurseries for fingerlings of commercially
suitable species of fish

63. OBJECTIVE
• Transport/
Storage/
Ice
plants/
Packaging
arrangements/ Refrigerated vans/ Marketing outlets
• In case of inland Fish Farming factors like seasonal or
perennial. Source of water supply, Vegetation in the
pond, area of pond, source of fish seed supply (stocking
– intensity), Technical supervision.
• Being highly perishable – must be marketed without any
loss of time.

64. HORTICLTURAL ACTIVITIES

65. 


Horticulture includes cultivation of garden crops which
include fruits, flowers and vegetables
Fruits cultivation (fruits - like Mango, Apple,
Jackfruit,
Banana,
Grapes,
Pineapple,
Guava,
Papaya, Ber (Zyzyphus), Citrus crops Lemon, Oranges,
Kinnow, Pomegranate, Litchi, Pear, Plum, Loquat,
Strawberry, Avacado, Gooseberry(Aaonla) has become a
highly remunerative enterprise for farmers.
Plantation Crops like Cashew, Coffee, Rubber,
Tea, Palmoil etc. fall in separate category.

66. The natural resources of the country like agro-climatic
and soil factors provide a good base for cultivation of
variety of fruits. We classify them as under:
TROPICAL – Mango, Citrus, Banana, Guava, Papaya,
Pineapple, Sapota, Jackfruit, Custard apple, Ber,
Jamun, Avacado, Aaonla etc.
Sub-Tropical – Litchi, Loquat, Pomegranate, Grape, Fig
etc.
TEMPERATE – Apple, Pear, Peach, Plum, Apricot, Cherry,
Strawberry etc.

67. CREDIT NEEDS
(Items of Investment)
FOR
HORTICLTURAL ACTIVITIES

68. The orchardist farmer would normally need
funds both in the pre-bearing and bearing
stages in the form of Long Term and Short Term
credit. The borrower incurs expenditure in the
form of recurring and non-recurring expenses
during growing period, both at pre-bearing and
bearing stages.

69. Pre-bearing stages (Non-recurring expenses)
 Preparation of site/land
 Cost of layout including drip/sprinkler irrigation
fencing/grading/sorting/storage
 Digging and filling of pits
 Cost of manures/fertilizers
 Cost of planting materials
 Cost of equipments need for plant protection/
maintenance/grading/sorting/processing/packing/
transportation

70. Pre-bearing stages (Non-recurring expenses)
(The expenses will increase every year with the
increase in size and age of the plant)
 Cost of maintenance in pruning and training.
 Power/Fuel
 Labor charges on hoeing and other operations
 Cost of supervision
 Post-harvest expenses
 Marketing expenses

71. FACTORS INFLUENCING
Viability of the Project

72.  The site should be in a well established fruit
region, so that local experience is available.
 The site should be free from frost and hails.
Chicku, Mango in early stage of growth, Papaya,
Banana cannot withstand frost.

Sub-soil should be fertile and free from
hardpans so as to ensure good growth of plants.
Papaya, Peach, Citrus are susceptible to water
logging. Fruits like Phalsa, Pomegranate, Guava
can also be grown on Saline and Alkaline soils.

73. 
Whether the irrigation facilities available are
adequate. If not, what arrangement could be made
for developing the same?

Whether the choice of variety, layout and
spacing is appropriate to the situation? Availability
of adequate planting material of true to the type
be ensured. Better alternative is units of
State/Central Horticultural Department’s own
nursery.
 Appropriate choice of inter-crops from their
compatibility with main crop as well as their
profitability, and the period during which intercropping could be practiced profitably.

74. 
Estimate of a realistic production in relation to the
existing level, Possible increase as a result of following
certain recommended/accepted practice. Estimates of
annual production from maiden crop onwards (on an
increasing scale according to increase with growth of
plants), up to the stabilization period.

Arrangements for
packing/storage/transport/
marketing

Year wise estimates of costs on inputs and labor for
raising and maintaining the plantation throughout the
gestation period, based on the current prices and
giving allowance for future escalation and estimate of
costs for normal maintenance of the developed
orchard.

75. ADEQUATE PROVISION OF PERSONNEL FOR
GUIDANCE
AND
SUPERVISION
DURING
IMPLEMENTATION OF THE PROJECT IS A MUST

76. 
The site should have perennial source of irrigation,
very particularly during initial growth of plants.
 All fruits do not grow at all altitudes. Apple,
Walnut, Cherries are best grown in between 4000-9000
ft above mean sea level. Citrus, Litchi, Mango
cultivation above 2000 ft above msl may find difficult
to acclimatize.

Only grafted or propagated through tissue culture
plants/saplings should be preferred over those
propagated through seeds.

Reliability with regard to the age of the plants and
genuineness of variety is very important. Therefore,
only reliable nurseries should be approached for the
plants.

77. 
The borrower should ensure the availability of
planting material well in advance of the planting
season (Monsoon or Spring)

Monsoon season is suitable for Mango, Guava,
Citrus etc, while Spring season is suitable for Apple,
Peach, Plum, Apricot, Cherry etc.
 An orchard near brick kiln often get affected due to
fumes and should be avoided.

Plant protection measures should be assured. A very
serious problem in fruit cultivation is protection against
birds, squirrels and monkeys. Any devise to control the
same will increase the cost of production – NO DOUBTbut is a must to maintain the quality and quantity.

78. 
The borrower should have good knowledge of
pruning, particularly in case of deciduous fruit
plants like Apple, Almond, Apricot, Peaches etc.
Any wrong pruning by the farmer might delay or
reduce the quantity and quality of fruits , and
thereby his income.

Spacing and system of planting should be
ascertained. Generally Square system of planting is
preferred.

Marketing of fruits are the biggest challenge.
It must be arranged as early as possible. Cold
chain, good transport, vicinity to market, Post
harvest processing can only help.

79. Fruits
Row to Row
Plant to plant
Distance in feet
No. of plants
per acre
Mango/Litchi/Chicku
30
30
48
Citrus/Guava
20
20
108
Banana
05
058
1742

80. TONNES OF
THANKS
from
Maheshchandra Pathak
AGRIBUSINESS