Agricultural Credit in India – Innovations in Design and Delivery of Products and Services
The concept of bringing farmers together in a voluntary group was initiated in 1982 through the Farmers’ Club Programme. This institutional innovation has received a renewed focus from 2007–08 onwards. Nevertheless, access to farm credit sector has not been easy and adequate. In this paper, innovative approaches to improve agricultural credit flow have been captured from the secondary sources and analysed using compound annual growth rate and descriptive analytical tools. The share of private moneylenders has decreased with the institutional agencies making inroads into the rural scene. The structure of the sources of credit has witnessed a clear shift wherein the scheduled commercial banks and RRBs have emerged as the major sources of direct and indirect institutional credit to agriculture in recent years. The SHG-bank linkage programme, Kisan Credit Card, Farmers Clubs, Joint Liability Groups and Interest Subvention Scheme have been promoted to supplement rural credit delivery effectively and have also shown a significantly increasing growth rates over the years. In addition, there are a number of other small innovations that have taken place across the spectrum of agricultural credit markets. All these would eventually contribute to making sustainable access to agricultural finance leading towards a path for prosperity of farming community, especially the small and vulnerable farm households.
Issues Limiting the Progress in Negotiable Warehouse Receipt (NWR) Financing in India
Although the warehouse receipt system (WRS) has the potential to improve the access to institutional credit of farming community, specially the smallholders lacking acceptable collateral for availing loan from formal channels, the progress of loan against NWR is observed to be slow. The paper has analysed the issues responsible for limited popularity of pledge finance amongst farmers. The agencies having integration with the market like the collateral management service providers, APMCs, Agricultural Marketing Board, etc., have been found to be a better window for disbursement of pledge finance. The physical availability of warehouses, complicated procedure and poor awareness level are some of the factors that limit the use of loan against a negotiable warehouse receipt (NWR). Awareness about advantages of NWR loans needs to be generated by involving banks, Krishi Vigyan Kendras, State Agricultural Marketing Boards, Regulated Market Committees, NGOs, co-operatives, FPOs and even APMCs. In order to inculcate storage habit and promote storage among the producers, warehousing should be encouraged under public-private partnership mode. There is a strong need to push NWR beyond a negotiable instrument as it offers immense potential to trade, short-term loan to farmers, balanced supply of agri-commodities and enhances farmers returns.
The Use of Qualitative Information in Macro-Economic Policy Analysis
The majority of macro-economic policy models takes for granted that conflicts among objectives can be assessed by means of a tradeoff analysis. Such tradeoffs imply that sacrifices and benefits of various impacts of decisions can be measured on a cardinal scale, so that a conventional macro-economic utility or welfare analysis can be applied.