AGRICULTURAL FANANCE Presented by Prof.M.J.KADAM

AGRICULTURAL FANANCE INTRODUCTION NEED TYPES - a) ON THE BASIS OF TIME b) ON THE BASIS OF PURPOSE c) ON THE BASIS OF SOURCES STRUCTURE

NEED AND TYPES OF AGRI. CERDIT a) ON THE BASIS OF TIME b) ON THE BASIS OF PURPOSE c) ON THE BASIS OF SOURCES

AGRICULTURAL CERDIT ON THE BASIS OF TIME SHORT TERM CREDIT- (LESS THAN 15 MONTHS) For purchasing seeds, fertilizers, pesticides, wage payments etc. MEDIUM TERM CREDIT- (15 MONTHS TO 5 YEARS) For small implements like repair and construction of wells LONG TERM CREDIT- (MORE THAN 5 YEARS) For Permanent land improvement – buying land, repayment of old debts, long term improvement in Agriculture

AGRICULTURAL CERDIT ON THE BASIS OF PURPOSE PRODUCTIVE CREDIT CONSUMPTION CREDIT UNPRODUCTIVE CREDIT

AGRICULTURAL CREDIT ON THE BASIS OF SOURCES 1 AGRICULTURAL CREDIT ON THE BASIS OF SOURCES 1. NON- INSTITUTIONAL CREDIT & 2. INSTITUTIONAL CREDIT -..

NON- INSTITUTIONAL CREDIT MONEY LENDERS, RELATIVES, FRIENDS etc. Main source of Agri-finance in before Planning period (1950 – 92%) money lenders – 69.7% in 1950-51 25% in 2000-01

MERITS AND DEMERITS OF NON- INSTITUTIONAL CREDIT MERITS 1. EASY TO OBTAIN 2. SIMPLE PROCEDURE 3. EASY ACCESS 4. NO RESTRICTIONS 5. CONSUMPTION LONES

DEMERITS 1. EXORBITANT RATES OF INTEREST 2. INDEBTEDNESS 3. LOSS OF LAND 4. MALPRACTICES 5. EXPLOITATION 6. ORIGIN OF BONDED LABOUR

STRUCTURE OF INSTITUTIONAL CREDIT GOI - RBI NABARD COMMERCIAL BANKS CO-OPERATIVE CREDIT SOCIETIES REGIONAL RURAL BANKS

NABARD NATIONAL BANK FOR AGRICULTURAL AND RURAL DEVELOPMENT -1982 APEX BANK FOR RURAL CREDIT AND DEVELOPMENT SHARE CAPITAL CONTRIBUTED BY GOVT.OF INDIA AND RBI HEAD OFFICE – MUMBAI ,16 REGIONAL OFFICES

FUNCTIONS OF NABARD SUAPEX BODY FOR RURAL DEVELOPMENT PERVISING CO-OPERATIVES MEDIUM AND LONG TERM CREDIT FOR STATE CO-OPERATIVES AND RRBs SUGGESTIONS TO GOVERNMENT RESEARCH AND DEVELOPMENT

COMMERCIAL BANKS AND AGRICULTURAL FINANCE GROTH AFTER NATIONALIZATION SHORT TERM FINANCE -FOR AGRICULTURE MEDIUM AND LONG TERM -FOR AGRICULTURE

FINANCE TO CO-OPERATIVES LEAD BANK SCHEME – DIRECT FINANCE – FOR LAND DEVELOPMENT INDIRECT FINANCE – FINANCE TO CO-OPERATIVES LEAD BANK SCHEME – FOR DEVELOPMENT OF DISTRICT LEVEL

REGIONAL RURAL BANKS ESTABLISHED-1975 REGIONAL BASE RURAL ORIENTED SPONCERD BY SCHEDULED COMMERCIAL BANKs SUPPLY CERDIT TO DEPRIVE SECTORS

FLOW OF INSTITUTIONAL CREDIT PERCENTAGE SHARE AGENCY/ YEAR 1970 1980 2001 2010 CO-OPERATIVES 77.0 55.9 39.0 20.0 COMMERCIAL BANKS 21.0 38.0 53.0 68.0 RRBs 2.0 5.2 8.2 12.0

STRUCTURE OF CO-OPERATIVE FINANCE Long Term Credit Short and Medium Term credit STATE LAND Dev.BANK (STATE LEVEL) CENTRAL CO-OP. BANKS (DISTRICT LEVEL) PRIMARY LAND Dev.BANK (VILLAGE LEVEL) PRIMARY Agri.CO-OP.SOCIETIES FARMERS FARMERS FARMERS

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