This document discusses various initiatives by NABARD to support capacity building in agriculture. It notes the challenges facing farmers from natural calamities and climate change. It then summarizes several programs run by NABARD, including watershed development, tribal development programs, farmers clubs, and credit programs like Kisan Credit Cards. The overall aim is to boost productivity, provide access to credit and financial services, and ensure food security for farmers in India.

1. NABARD’s Initiatives for Capacity Building in changing
agricultural scenario
NABARD, DELHI RO

2.  Set up in 1982, mandated for facilitating credit flow and
overall development in Agricultural & Rural Sector
 Paid-up Capital Rs.3000 crore against the Authorised
Capital of Rs.5000 crore
 Operates through HO at Mumbai, 28 ROs in State
Capitals & 391 District Offices
 As on 31-03-2012, total assets worth Rs.1,82,075
crore

3.  Farmers, especially SF & MF are cornerstone for
Food Security of more than one billion people of
India
 SF/MF constitute more than 80% of Indian
farmers : The irony is that 90% of them are rain-
dependent
 Natural calamities, threat of Climate Change,
productivity being on the wane and rising cost
of cultivation are hobbling agriculture.
 More than 50% of farmers are still deprived of
formal financial services
 Speedy credit and entrepreneurial support to
farmers is the need of the hour

4.  Farm Sector Growth worrisome
 Rising Food Inflation is an area of great concern
 Yield of majority of crops is not showing significant
improvement. The vagaries of nature have
become more perilous in the face of Climate
Change.

5.  Decline in groundwater table and soil
erosion are bottlenecks, which need to be
tackled by adopting micro-irrigation system
and watersheds with peoples' participation
 Irrigation facilities, rural roads and storage
infrastructure are of pivotal importance for
boosting productivity and marketing.
 Another Farm Revolution is the need of the
hour

6.  The vastness of the country throws up huge
challenges before the banking system –
How to mainstream the marginalised people
into the financial services.
 Thus Food Security & Financial Inclusion are
on the top of agenda

7.  Innovative tools of credit delivery such as
financing of JLGs, Producers Organisations,
etc must be explored and expedited.
 SHG-Bank Linkage Programme, a landmark
tool of empowerment and financial
inclusion, to be further scaled up.
 Capacity Building of farmers and villagers to
be on the forefront

8.  Measures to improve productivity supported by
growth of allied and non-farm activities
 Micro-irrigation and Watersheds with peoples’
participation
 Thrust on Skill Enhancement, Rural Innovation,
Agro Processing & Value Addition
 Rural roads and storage infrastructure for better
marketing

9.  Farmers Club
 Self Help Group
 Kisan Credit Card
 Watershed Dev
 Wadi
 Joint Liability
Groups
 Producers Org.Dev
Fund (PODF)
KCC
1998-99
SHG
1992
VVV
1982
Farmers Club
2005
PODF
2010-11
JLG
2004-05
Watershed Dev
1999-2000

10.  Revolving cash credit facility – Providing
for any number of drawals/repayments
at the convenience of the farmers
 Frequent need-based drawals
repayments reduce interest burden for
farmers
 Each drawal to be repaid within a
maximum period of 12 months

11.  Card is valid for 5 years – No need for
execution of loan documents every year
 Limit based on realistic assessment
including consumption, asset
maintenanance and investment needs
 Move to make it ATM / Mobile enabled card
to infuse greater flexibility

12. Model / Strategy
 Involvement of community through Village
Watershed Committees, shramdhan,
commitment on social discipline to
mitigate environmental threats (tree
felling, cattle grazing & water intensive
crops) etc
 Ridge to Valley approach to achieve
sustainable production systems in dry
lands through conserving natural
resources
 Project facilitation through NGOs, PRIs
Programme covers 1.78 million ha, in
16 States with a commitment of
Rs.1565 Cr., No. of Villages – 3210,
Population – 12.84 lakh
Watershed Development

13.  Increased water resources meeting
community needs
 Increase in cropping intensity, crop
diversification and productivity
 Supplementary livelihood
opportunities
 Improvement in employment
generation resulting in reduced
migration
Watershed Development - Impact

14. Providing livelihood opportunities for
landed tribal families through cultivation
of appropriate tree species with other
crops
Providing livelihood and other
employment opportunities for landless
tribal families in and around project area.
Institutional development – tribal
cooperatives, producer organizations
Status : 350 Projects with commitment of
Rs. 1003 Cr, covering 2.71 lakh tribal
families in 24 States / UTs
Tribal Development - WADI Model

15. Informal community based
organisation of farmers focusing
on :
• Access to credit by linking with
banks
• Technology , knowledge and
market interventions
Outcome:
 More than 450 FCs functioning as
BF
 More than 800 FCs as SHPI –
Formed More than 12000 SHGs &
More than 150 JLGs.
 Pilot project for Technology
Transfer, Credit Counseling and
Market Advocacy through FCs
launched.
1,01,946 FCs have been formed up
to 31 March 2012
Future Strategy: (1) Consolidation of FCs through federations so that
aggregation of inputs, produce, services could be facilitated
(2) FCs as BF for banks and Development Facilitators (DF) to State
Govt. and State Agril. University.
FARMERS’ CLUB PROGRAMME

16. • Programme designed to meet existing and
emerging challenges in Agriculture
• Better Banker Borrower relationship
• Technology Transfer
• Post Harvest Technology, value addition
• Better bargaining power in procuring inputs and
selling the produce

17.  Credit to be used adopting suitable methods of
Science and Technology.
 Terms and conditions of credit to be fully respected.
 Work with skill to increase productivity and income.
 Part of additional income to be saved.
 Loan to be repaid regularly and in time.

18.  Development through Credit
 Technology Transfer
 Awareness creation
 Capacity Building

19.  CBs, Coops, RRBs
 NGOs / KVKs / AUs / PRIs / Post Offices
 Assistance from NABARD Rs.10000 per club
per annum for 3 years
 Expenditure exceeding Rs.10000 to be met by
sponsoring agency

20.  Size : No restriction on upper limit . Minimum
size should be 10 members
 Membership : Farmers as well as non-
farmers can become members
 Office Bearers : Only 2 (Chief Coordinator &
Associate Coordinator – 2 years)

21.  Residents, Progressive Farmers,
 Should not be a political party member
 No NGO representative can be office bearer
 Should not be a defaulter
 Operational Area : Preferably one or a group of 2 – 3
contiguous villages Registration : Not required
 Bank Linkage : SB A/c in joint name of office bearers

22.  Capacity building of members including leadership
training
 SHGs / JLGs formation
 Forming federations of FCs/ Producers’ Groups/
Companies
 Linkages with technology institutions/ markets

23.  Formation of FCs
 Maintenance of FCs for 3-5 yrs.
 Awareness / Orientation Meets
 Preparation of Plans
 Identification of borrowers
 Maintenance of village profile / data / MIS
 Recoveries
 Specific works assigned by banks/ NGOs/
Govt. Depts.

24.  Exposure visits within & outside states
 Implementation of special projects /
programmes
 Transfer / Adoption of new / innovative
technologies
 Publication of materials in local
language/Envrionment Protection Programme

25.  Formation & nurturing of SHGs
 Participation in Exhibitions / Fairs / Melas / futures
trading
 Access to e-education / IT enabled services /
kiosks
 Any other innovative activity

26.  Pivotal role in organizing and conduct of club
activities.
 Support for conducting meetings of the club.
 Make arrangements to invite subject matter
specialists.
 Take help of club in identification of good
borrowers.

27. Financial assistance for following activities:
 Inauguration
 Meet with Expert Programmes - Subject Matter
Specialist for technology transfer, biotech., post
harvest handling techniques, etc.
 Training programmes for club members from
time to time.
 Support for formation of Self Help Groups

28. Objective
 Facilitate adoption of appropriate technologies
 Dissemination of appropriate technologies &
commercial intelligence
 Financial literacy, credit counselling
 Organisation of farmers into informal
associations, JLGs, producer groups, producer
companies, etc.

29.  Operational from 01 April 2008
 Corpus of Rs.100 crore from operating profit
 Quantum of assistance : 95% of outlay
 Mode – grant, soft loan, equity like support or a
blend (6-7%% ROI on soft loan)
 Repayment – 7 years , 1-2 years of moratorium

30.  Activity to result in increase in income through
 Increased production
 Productivity
 Reduction in costs
 Demand led diversification
 Market participation
 Value addition

31. Eligible items
 Cost of equipments & administrative and
recurring costs
 Core staff’s salary
 Miscellaneous expenditure
 Hiring premises & vehicles for visit on
selective basis
 Hilly/resource poor regions capital expenses
on merit / selective basis

32.  Eligible Farmers :
 All progressive farmers/ agri-entrepreneurs,
who have availed or propose to avail farm
loan from banks
and
are inclined to adopt new agro technology
would be eligible for exposure visit.
 Preference to small, marginal and SC/ST
farmers.

33. Exposure Visits to
 Innovative/ new technology recommended by
Research Institutions or State Agriculture
Universities or being implemented by Krishi Vigyan
Kendras of the State.
 New technology developed by individual, NGO or
any other reputed institutions (like IIT, ICAR, CSIR,
CFTRI, ICRISAT, RRLs, etc.) can also be considered
provided it can be replicated for wider use by
farmers/ entrepreneurs.
 .

34.  NABARD extends grant for the exposure visit
as under :
 For Inside State Visits : Maximum Rs.3000/-
per farmer (Maximum batch size 20 farmers)
 For Inter-State Visits : Maximum Rs.5000/-
per farmer (Maximum batch size 20 farmers)

35.  Primarily intended for poorest of poor,
especially women.
 However, SF/MF are the largest indirect
beneficiaries.
 Mainstreaming the poorest into formal
banking system by Group Formation,
Savings & Bank Linkage leading to
entrepreneurship

36. On the pattern of SHGs, loans to
Farmers, SF/MF, Oral Lessees, Tenant
Farmers, Share Croppers
Loans under KCC Mechanism, either to
individual members of JLG or to Group
as a whole

37. WHO PROMOTES SHGs
BANK STAFF
FARMERS CLUBs
RURAL VOLUNTEERs NON-
GOVERNMENTAL
ORGANISATIONS(NGOs)
GOVT. AGENCIES
STAFF OF DEPT.OF POSTS

38.  IDENTIFY POOR
 ORGANISE POOR into SHGs
 CAPACITY BUILDING
 BOOKS MAINTENANCE
 SOCIAL ACTIVITIES
 BANK LINKAGE
 GUIDANCE IN ECONOMIC
ACTIVITIES
 PLAN FOR WITHDRAWAL

39. 1. Normally 10 to 20
2. LESS THAN 10-CANNOT WITHSTAND
OUTSIDE PRESSURE
3. BETWEEN 15-20- IDEAL
4. MORE THAN 20- PROBLEMATIC TO
HANDLE
5. HOMOGENEITY-Occupation,Culture,
Gender, Income, Literacy level

40. Savings Linkage of
SHGs
• SHGs to open SB A/C in the nearby bank branch
of its choice.
• Bank to obtain group resolution & authorisation
to open and operate the savings account
• SHGs are not required to deposit their entire
savings in the bank
• Groups will become eligible to apply for loan
after 6 months
• Six months is not from the date of opening of SB
account but from the date of first meeting of the
group.

41.  NABARD has devised a rating tool consisting
of 16 parameters
 Parameters range from size of group, number
of meetings, attendance of members to
recoveries of internal loans, accumulated
savings, etc.
 SHGs with 12 to 16 ‘’very good’’ factors may
be granted loans immediately
 SHGs with rating of less than 10 ‘’very good’’
factors need not be considered for loan for
now.

42. Credit Linkage of
SHGs
 Bank to receive Loan application from
matured group
 Documents- Group resolution, agreement
 Bank to carryout assessment of SHGs using
rating tool
 Bank to finance only quality SHGs.
 QUANTUM OF LOAN (As CC Limit) – as a
multiple of group’s savings

43.  Transaction costs are reduced
 Increase in deposit base
 Very little cost for appraisal and
monitoring of loan
 Increase in social base in rural area
 Overall a sound business proposition

46. JLG Contd…
Farmers
Small
Individuals
Share CroppersTenant
Marginal

47. Informal Groups
4 – 10 members
1 per family
Loans – Single/Group
Mutual Guarantee
Joint Undertaking
Similar eco activity
JLG Contd…
General Features

48. Animator Representative
Convene meetings
Maintain Records
Deal with Banks
Encourage
Financial Literacy
Help Animator
Operate Bank A/c
jointly with
Animator
Periodic monthly meetings
Leadership rotation
Recording minutes and resolutions
Exchanging views on activities & motivating mutually

49.  Credit to Individual Members or Group as
a whole Credit
 Credit assessment of the group could be
based on the available cultivable area of
each member of the JLG / activity to be
undertaken
 Considered as Direct Agri Advance under
Priority Sector

50. Introduction Form
per member
Application cum
Appraisal Form
Credit to JLG A/c
Mutual Agreement
and Promissory Note
Any member opting out /
joining the groupNew loan agreement

51.  Reduction of transaction costs
 Outsourcing of bank business
 Ensuring proper financial inclusion
 Facilitating transfer of optimal technology and
improved farm practices leading to prompt
repayment

52. Particulars SHG JLG
Group size Up to 20 4-10
Purpose of
loans
Not specified Specified
Loan to Group Group/individual
Savings Must May be encouraged but loan
size depends on farm
activity
Focus Women SF/MF/Tenants/Share
Croppers/Individuals

53.  SHG Promoting NGO : Maximum Rs.
7000/- per SHG on achieving deliverables
such as group formation and bank linkage
 JLG Promoting NGO : Rs. 2000/- per
JLG partly on sanction of bank loan
and partly on repayment of loan

54.  As on 31 March 2012, 79.60 lakh
SHGs have been SB linked and 43.54
lakh SHGs have been credit linked
thus benefitting around more than 10
crore poor families, mostly SF/MF
families
 3.32 lakh JLGs have been promoted
and credit linked as on 31 March 2012

55.  NABARD has set up a separate fund titled
"Producers Organization Development Fund"
(PODF) to tackle
issues of non availability of timely credit,
capacity building of producers & trengthening
of the Producers Organizations and market
tie-ups.
 The Fund has been created in NABARD with
an initial corpus of Rs.50 crores

56. Producers Organization Development Fund
(PODF) will be used to support
 Producers Organizations across three levers,
viz. credit support, capacity building &
market linkage.
 The objective of the fund is to meet end to
end requirements of Producers Organization
as well as to ensure their sustainability &
economic viability.

57.  Various types of capacity building initiatives which
can be supported under the PODF :
 Skill development in order to enable the members
produce goods both in farm and non-farm sector
 Business planning
 Technological extension through classroom
training,
 Exposure visits, agricultural university tie ups,
expert meetings,etc.
 Any other capacity building initiative which directly
benefits the P.O.

58. Together we can ……..
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