Agriculture-II

Micro Credit
Micro Credit is defined as provision of credit and other financial service like insurance of very small amount to the poor in rural, semi-urban and urban areas for enabling them to raise their income levels and improve living standards. Micro Credit Institutions are those which provide these facilities.
Microcredit covers not only consumption and production loans for various farm and non-farm activities of the poor but also include their other credit needs such as housing and shelter improvements.
A Self-Help Group (SHG) is a registered or unregistered group of micro entrepreneurs having homohenous social and economic background voluntarily coming together to save small amounts regularly, to mutually agree to contribute to a common fund and to meet their emergency needs on mutual help basis.
While the SHG-bank linkage programme has surely emerged as the dominant micro finance dispensation model in India, other models too have evolved as significant micro finance channels.
Government allows 'Micro Credit/Rural Credit' (non-banking financial company, NBFC) activities for Foreign Direct investment (FDI)/Overseas Corporate Bodies (OCB)/ Non-Resident Indian (NRI) investment to encourage foreign participation in micro credit projects.
Micro Finance Development and Equity Fund
There is a need for micro credit providers to shift from a minimalist approach that is offering only financial intermediation-to an integrated approach to poverty alleviation taking a more holistic view of the clinet including provision of enterprise development services like marketing infrastructure, including provision of enterprise development services like marketing infrastructure, introduction of technology and design development. Micro Finance Development Fund was set up for this purpose in 2000-01.
During 2005-06, Government of India has decided to redesignate the existing mFDF as micro Finance Development and Equity Fund (mFDEF). The objective of the redesignated Fund is to facilitate and support the orderly growth of the microfinance sector through diverse modalities for enarging the flow of financial services to the poor particularly for women and vulnerable sections of society consistent with sustainability.
Type of micro credit providers in India
Domestic Commercial Banks:Public Sector Banks; Private Sector Banks & Local Area Banks
Regional Rural Banks
Co-operative Banks
Co-operative Societies
Registered NBFCs
Unregistered NBFCs
Other providers like Societies, Trusts, etc.
Microcredit 2009
In the financial year 2007/08, Microfinance in India through its two major channels-SBLP (Self Help Group-Bank Linkage Programme) and MFIs-served over 33 million Indians. 4 out of 5 microfinance clients in India are women.
By 2008, the outstanding micro-credit portfolio of India was about Rs.22,000 crore 75% are accounted for by SBLP, 20% by large MFIs and 5% by midium and small MFIs.
SBLP reports over Rs.3,500 crore savings of SHG-members. MFIs are prohibited from acception savings; however, one third of their clients are served under the SHG-model and thus encouraged to save among themselves and or open savings accounts with banks.
Indian MFIs serve 4.1 million clients from the SC/ST background.
Micro Financial Sector (Development and Regulation) Bill, 2007
The objective of the Bill is to ensure development and orderly growth of the micro-finance sector in rural and urban areas.
The Micro Financial Sector (Development and Rgulation) Bill, 2007 which seeks to make NABARD the sector regulator lapsed with the expirry of the 14th Lok Sabha, It aims to provide enabling for ensuring universal access to integrated financial services, especially to women and certain disadvantaged sections.
The Bill entrusts the function of development and regulation of the micro financial sector to the National Bank for Agriculture and Rural Development (NABARD), a subsidiary of the Seserve Bank of India. The Bill will be reintroduced and its passage would result in the regulation of the micro-finance organisations not being regulated by any low for the time being.
It has provision for registration of micro finance organisations collecting thrift from individual members of self help groups or through a group mechanism. The Bill also provides for creating of a reserve fund and maintenance of accounts and periodical returns to be submitted by micro financial organisations. At the same time, it has a provision for penalties for non-compliance with the regulatory requirements of the Bill.
The Bill empowers NABARD to frame a scheme a scheme for appointment of one or more Micro Finance Ombudsman for settlement of disputes between eligible clients and micro finance organisations. It also provides for constitution of a micro finance deyelopment and equity fund for the development of the micro finance sector.
Kisan Credit Cards
The scheme of Kisan Credit Card (KCC) was introduced in 1998-99 for timely. easy and flexible evailability of production credit to farmers. Commercial banks. cooperative banks and RRBs are implementing this scheme. Each farmer is provided with a Kisan Credit Card and a passbook for providing revolving cash credit facilities. The farmer is permitted any number of drawals and repayments within a stipulated date, which is fixed on the basis of land-holdings.
Over 7 crore Kisan Credit Cards have been issued to farmers till date (2009) from its inception in 1998.
All categories of farmers including tenant farmers, share croppers, oral lessees are eligible for a Kisan Credit Card.
Agricultural Price Policy in India
Prices of agricultural produce are important for farmers as these determine their Incomes. farming should become economically viable and profitable for agriculture to boon and country to have food security. Agricultural produce shows maximum price fluctution. So farm sector needs a price policy for price stabilisation.
The main objective of the Government's price policy for agricultural produce continue to aim at ensuring remunerative prices to the growers for their produce with a view to encouraging higher investment and adoption of modern farm technology for achieving higher levels of production as also to safegurad the interests of consumers by making available supplies at reasonable prices. Each season Government announces Minimum Support Price (MSP) for 24 major agricultural commodities and organises purchase operations through public and cooperative agencies. It operates effectively only for rice and wheat.
At the beginning of the sowing season for kharif and rabi crops, the Government announces Minimum Support Price (MSP) at which it is prepared to procure the produce that the farmer is willing to sell to the FCI for the PDS and buffer stock operations. When is actually procures when harvesting is done, the MSP is added to and the procurement price is arrived at. The grain is sold at the PDS outlets at issue price. The FCI's economic cost is what it costs the FCI to procure, store, distribute etc.
The Government decides on the support price for various agricultural commodities based on the recommendations of the commission for agricultural costs and prices (CACP).
Commission for Agricultural Costs and Prices (CACP), while recommending prices takes into account all-important factors, viz.
Cost of Production
Changes in Input Prices
Input/Output Price Parity
Trends in Market Prices
Inter-crop Price Parity
Demand and Supply Situation
Effect on Industrial Cost Structure
Effect on General Price Level
Effect on Cost of Living
International Market Price Situation
Parity between Prices Paid and Prices Received by farmers (Terms of Trade).
CACP recommends MSPs for 24 important crops. Of all the factors. cost of production is the most tangible factor and it takes into account all operational and fixed demands. Government organises Price Support Scheme (PSS) of the commodities, through various public and cooperative agencies such as FCI, CCI, JCI, NAFED, Tobacco Board, etc., for which the MSPs are fixed. For commoditites not covered under PSS, Government also arranges for market intervention on specific request from the States for specific quanity at a mutually agreed price. The losses, if any, are borne by the Centre and State on 50:50 basis. the price policy, paid rich dividends. Production improved and food security is being realized.
However, the criticism of MSP is that is is promoting rice and wheat while the need is for diversification. It helps the big farmer while the majority of farmers in India are subsistence farmers. Food subsidy burden is increasing and needs to be rationalized so as to spend on infrastructure.
MIS
The Department of Agriculture & Cooperation is implementing the Market Intervention Scheme (MIS) on request from the State Governments for procurement of horticultural and agricultural commodities generally perishable in nature and not covered under the price Support Scheme.
Food management
Food management in India has three basic objectives viz. procurement of foodgrains from farmers at remuneerative prices distribution of foodgrains to the consumers particularly the vulnerable sections of the society at affordable prices and maintence of food buffers for food security and price stability. The instruments for food management are the Minimum Support Price (MSP) and Central Issue Price (CIP). The focus is on incentivizing farmers by ensuring fair value for their produce through the Minimum Support Price mechanism. distribution of foodgrains at subsidized rates to 6.52 crore BPL families, covering all households at the risk of hunger under Antyodaya Anna Yojana (AAY), establishing grain banks in chronically food-scarce areas and strengthening the Public Distribution System (PDS). The nodal agency which undertakes procurement., distribution and storage of foodgrains is the Food Corporation of India (FCI). Procurement at MSP is open-ended, while distribution is governed by the scale of allocation and its offtake by the beneficiaries.
Decentralized procurement scheme
Decentralized Procurement Scheme is in operation in 10 states, namely, West Bengal, Uttar Pradesh, Madhya Pradesh, Chhattisgarh. Uttarakhand. Gujarat, Orissa, Tamil Nadu, Karnataka and Kerala and the Union Territory of Andaman & Nicobar Islands since 1997. Under this scheme, the designated states procure, store and issue foodgrains under the Targeted Public Distribution System (TPDS) and the welfare schemes of the Government of India. The difference between the economic cost-fixed for the State (what is costs the state to operate) and the Central Issue Price is passed on to the State Government as subsidy.
The decentralized system of procurement has the objectives of covering more farmers under the MSP operation, improving efficiency of the PDS. providing foodgrains varieties more suited to local taste and reducing transportation costs. States under DCP operation have shown a healthy increase in procurement in rice.
Nation Food Security Mission
The Department of Agriculture & Cooperation, Ministry of Agriculture, has launched a Centrally-sponsored scheme on National Food Security Mission (NFSM) in pursuance of the resolution of the National Development Council (NDC) to increase the production of rice, wheat and pulses by 10, 8 and 2 million tonnes. respectively, over the benchmark levels of production, by the end of the Eleventh Five Year Plan period.
The Mission aims at increasing foodgrains production of the above crops through area expansion and productivity enhancement; restoring soil fertility and productivity; creating employment opportunities; and enhancing farm level economy to restore confidence of farmers of targeted districts.
Various activities of NFSM relate to demonstration of improved production technology. distribution of quality seeds of HYVs and hybrids, popularization of newly released varieties, support for micronutrients, and training and mass media campaign including awards for best performing districts. The identified districts are given flexibility to adopt any local area specific interventions as are included in the Strategic Research and Extension Plan (SREP) prepared for the agriculture development of the district. Rs. 2 crore each will be provided during the Eleventh Five Year Plan period to those districts which have a programme for two or more crops of the NFSM and Rs. 1 crore to the districts having a programme for any one of the crops.
The total outlay of NFSM is Rs. 4,882.5 crore during the Eleventh Five Year Plan.
The national food security mission (NFSM) is being implemented in 312 identified districts of 17 states of the country.
Food subsidy
Provision of minimum nutritional support to the poor through subsidized foodgrains and ensuring price stability in different states are the twin objectives of the food security system. In fulfilling its obligation towards distributive justive. the Government incurs food subsidies. The difference between economic cost of foodgrains and the issue price is reimbursed to FCI. Food subsidy is provided to FCI and states / UTs undertaking DCP operations. food subsidy is provided to distribute wheat and rice to the poor and also maintain a buffer stock. In 2008-09, food subsidy was Rs 43,600 crore. In the Union Budget 2009-10, food subsidy is Rs. 52,500 crore, a 21% rise from the revised estimates for last year.
However, it is expected to go up due to the concessional food planned to be supplied through the food security Act. Also monsoon being deficient, Government may important oodgrains.
Rashtriya Krishi Vikas Yojana (RKVY)
The NDC in its 53rd meeting (2007) decided to launch a programme to incentivise the States to increase the share of increase the share of investment in agriculture in their State plans. Accordingly, the Government approved the Rashtriya Krishi Vikas Yojana (RKVY) with an allocation of Rs. 25,000 crore for the Eleventh Five Year Plan.
The RKVY aims at achieving the 4% annual growth in the agriculture sector during the Eleventh Five Year Plan period by ensuring a holistic development of agriculture and allied sectors. The RKVY will be a State Plan Scheme and the eligibility for assistance under the scheme would depend upon the amount provided in the State budgets for agriculture and allied sectors, over and above the baseline percentage expenditure incurred on agriculture and allied sectors. The funds under the RKVY would be provided to the States as 100% grant by the Central Goverment.
The main objectives of the schemes are:
To incentivisse the States to increase public investment in agriculture and allied sectors
To provide flexibility and autonomy to the States in planning and executing agriculture and allied sector schemes
To ensure the preparation of plans for the districts and the States based on agro-climatic conditions, availability of technology and nutural resources.
To ensure that the local needs/crops/priorities are better reflected.
To achieve the goal of reducing the yield gaps in important crops, through focused interventions.
To maximize returns to the farmers.
Under the Scheme of RKVY, the following indicative broad activities have been identified for focused attention-Integrated Development of Food crops. including coarse cereals, minor millets and pulses; agriculture mechanization: soil health and productivity; development of rain-fed farming systems; integrated pest management; market infrastructure; horticulture; animal husbandry, dairying and fisheries; organic and biofertiflizers; and innovative schemes.
Second Green Revolution
The first Green Revolution has run its course. Cereal yields are rising very slowly, water tables are plunging, and agricultural growth now averages only 2% annually.
Second Green Revolution is necessary and is being ushered in, spearheaded by the corporate sector and helped by new laws. Second Green Revolution. focusing on fruits and vegetables, can double agricultural growth to 4% per year.
Land reform laws ban corporates from farming. But contract farming is possible; corporates contract to provide high-tech farm inputs on credit, and lift the output at guaranteed prices.
The biggest rural initiative buying and selling centres, which also provide information to farmers on proces, wheather, and scientific farming practices.
By cutting out middlement, e-chouplas can pay farmers a higher price than they get in mandis, yet lower ITC's procurement costs. The company started with soyabeans, wheat and shrimps, and is now diversifying into oilseeds. spices and fruit.
FieldFresh, run by Sunil Mittal of Bharti Telecom, already has 1,000 acres under horticulture in Punjab. Pepsi and McDonalds have started contract cultivation of citrus fruits and lettuce respectively. Godrej is into contract cultivation of maize, used to make cattle feed.
Global Green, a Thapar company, uses contract cultivation for gherkins and other products for export, and has a turnover of over Rs 100 crore.
Paper companies like Ballarpur and ITC provide farmers with fast-growing elonal varieties of trees that mature in just four year, and buy the output.
This corporate upsurge is being encouraged by a new political urgency to uplift rural India. A raft of new laws aim to end historical hurdles.
The Agricultural Produce Marketing Committee Act Forces farmers to sell only at mandis, ostensibly to protect them from rapacious traders. But this makes contract farming illegal; companies cannot directly buy from farmers.
However, many states have now repealed their versions of the APMC Act. Second, India has long been plagued by a maze of 16 different food laws, some of which are self-contradictory (one law permits sweeteners in jams and another bans the practive).
Chilli paste is a widely sold product in Asia but cannot be produced in India because the law prohibits the use of thickeners. The central government wants to make a new comprehensive model law-integrated food law to replace the old laws.
Third, the governmnt proposes a Warehousing Receipts Act, which will make warehouding receipts negotiable instruments, and thus qualify for bank financing.
This, along with futures trading in the NCDEX and other commodity exchange. can modernise agricultural trading just as stock market reforsm earlier modernised the capital market.
Fourth, in order to curb hoarding, the Essential commodities Act has long placed limits on commodity stocks. This makes large-scale corporate investment impossible.
Now that chronic agricultural shortages have given way to surpluses, the list of essential commodities has been drastically cut and optimists hope that the Act will soon be scrapped.
Fifth, tax laws and incentives are being liberalised to encourage private investment.
Sixth, banks are very keen to get into rural business, and many are now lending to self-help groups, which can enter into contracts with companies.
Cheap credit from banks and corporates can facilitate horticulture. If new GMOs are added to it along with rural infrastructure (Bharat Nirman) and sustainability, the second green revolution can be the ever green revolution unlike the first one.
Horticulture
Vast areas of India have tropical-and agro-cIimatic conditions which are well suited for cultivation of horticulture and plantation crops. They are also ideal substitutes for marginal and degraded lands, which are unsuitable for crop husbandry. They can help in diversification of agriculture. The horticulture sector contributes abnut 24.5% towards agriculture GDP from only about 8% of the cultivated area. Besides, providing nutritional and livelihood security and helping poverty alleviation and employment generation. this sub-sector sustains a large number of agro-Industries, which generate huge additional non-farming employment opportunities. The range of horticultural products includes fruits, vegetables, spices, coconut, medicinal and aromatic plants. mushrooms. cashew. cocoa etc. India accounts for 10% or the world production of fruits and stands second after Brazil and is second largest produeer of vegetables after China. contnbutmg 13.4% of the world vegetables Production. The thrust areas for providing boost to the horticulture sector arc as follows:
Area Expansion
Improving production
Improving productivity.
Reducing cost of production
Improving quality of pm ducts
Value addition
Promotion of marketing and exports
Strengthening of credit and organisational
support
Human resource development
Addressing relevant policy issues
Cold chains.
National Horticulture Mission (NHM)
The National Horticl:llture Mission (NHM) is facilitating the holistic development or horticulture by promoting latest technologies involving production and supply of good quality planting material through tissue culture as well as nurseries, area expansion with improved cultivars, rejuvenation of senile orchards, organic farming, protected cultivation, integrated pest management/ integrated nutrient management along with creation of infrastructure. for post harvest management and marketing. The post harvest management component includes the setting up of primary/mobile processing facilities. Besides, the cluster approach adopted under mission prcnidcs opportunities for setting up of food processing units for fruits and vegetables.
The Government has allocated a sum of Rs.1100.00 crore under the National Horticulture Mission during 2008-09, for taking up various activities involving production and productivity enhancement, post harvest management and marketing
which in turn will create job opportunities in the field of horticulture,
Post Harvest Losses: Steps to reduce
Post harvest losses on an average range from 10 to 30 percent in fruits and vegetables and 8-10 percent in respect of pulses.
Though post harvest management technology is available in certain sectors. the supply chain inefficiency and inadequate infrastructure are the main causes for such wastages.
The Government has launched several schemes which involves component to check wastage as under:
For horticulture crops, the Government has launched two Centrally Sponsored Schemes.
'The Technology Mission' for Integrated Delelopment of Horticulturc in North Eastern States and Sikkim' has been launched during the year 2001-02 Which was also extended to the Himalayan States of Jammu & Kashmir, Himachal Pradesh and Uttarakhand during 2003-04.
'The National Horticulture Mission' has been launched during 2005-06 for the remaining States. Both the schemes provide assistance for creating post - harvest infrastructure, including cold storage facilities with subsidy.
During 2006-07, a new Component has been introduced under the National Horticulture Mission to facilitate setting up of Modem Terminal Markets in the country, which will have state-of-the-art cold chain and other infrastructure and will help in establishing an efficient supply chain right from the farm gale to the consumer / processor / exporter.
The National Horticulture Board (NHB) is also implementing programmes aimed at reducing the losses of horticulture produce through the schemes Capital Investment Subsidy for Construction / Expansion / Modernization of cold storage / storages for Horticulture Produce.
The Ministry of Agriculture is also implementing a Capital Investment Subsidy Scheme, titled 'Gramin Bhandaran Yojana' for Construction / Renovation of Rural Godowns in the country .One of the objectives of the Scheme is to provide scientific storage near the production ·centres (excluding municipal corporation areas) in order to reduce the losses.
A Central Sector Scheme, titled 'Development / Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization' has also been launched hy the Ministry of Agriculture in 2004 to (acilitate development of marketing infrastructure, market user common facilities, infrastructure for direct marketing of agricultural commodities, infrastructure for e-trading, market intelligence etc. and mobile infrastructure for post harvest operations (excluding transport equipment) by providing credit-linked back-ended capital investment subsidy to entrepreneurs and direct assistance to State agencies.
Vishesh Krishi Upaj Yojana
The objective of the scheme is to promote export of fruits, vegetables, flowers, minor forest produce, and their value added products, by incentivizing exporters of such products. Exporters of such products shall be entitled for duty rebates.
Protection of Plant Varieties & Farmers' Rights Act, 2001
The Salient features of the legislation are:
The legislation extends to all categories of plants exceplmicro-organisllls
In order to be ,eligible for protection, a variety must be new, distinct uniform and stable.
The legislation contains provisions for compulsory licensing in the public interest.
Farmers will continue to enjoy their traditional rights to save, use, exchange. share and sell their produce of the protected variety with the only restriction that the fanners will not be able to sell branded seed of the protected variety for commercial purposes.
The implementation of this legislation. involves the setting up of a Plant Varieties and Farmers' Rights Protection Authority which will give effect to the provisions or the Act.
The Protection of Plant Varieties and Farmers' Rights Act 2001 provides for establishment of an effective system for protection of plant varieties, the rights of farmers and plant breeders and for encouraging the development of new varieties of plants. The plant varieties will be registered for plant breeder rights, based on the criteria of distinctness, uniformity and stability, as mentioned above.