Extension and Credit in
Prof. M.R. Sharma
Extension and Credit in
Extension and credit are too main
components which can play very important role in
the developmental activities of horticulture sector.
Credit is available with banks. NABARD, bank an
apex bank in the country to provides credit in the
field of agriculture and rural based cottage
industry. In the field of horticulture NABARD,
has disbursed a cumulative amount of 3,303.21
crore of refinance since its inception up to 31st
March 2005. The projection a for refinance under
horticulture for 2005-2006 is Rs. 354.28 crores.
National Bank has estimated the potential for 2006-
2007 Rs. 4494.44 crores in the basis of potential
linked plans proposed for all the state. Under NHM
activities the major emphasis has been given for
plantation infrastructure and development which
includes production of establishing the model
nurseries, rehabilitation of Tissue Culture Labs,
establishment of new gardens
Creation of Water storage structure,
protective cultivation, promotion of INM/IPM
and Post Harvest management, processing and
value addition with special reference to Pack
houses, Market intelligence, Mobile
processing units etc. Most of these activities
are project based. The private entrepreneur
should provide the bankable projects with back
ended subsidy provision.
The credit requirement under this
sector during the X Plan period has
been assessed as Rs. 18,420 crores.
The credit requirements for 2006-07
has been estimated Rs.4494.44
Retrospect and Prospects of
Institutional finance has a prominent role to play
to meet the fund requirement for strengthening
the supply base of horticulture and plantation
sector. The task Force on Agriculture Credit had
estimated that during the X Plan period, a
physical programme of 13.16 lakh hectares would
be covered under plantation and horticulture (6.64
lakh ha under fruit and vegetables, 6.08 lakh ha
under plantation crops and 0.44 lakh ha under
crops) through credit support.
The business operations in horticulture sector
are discussed in the following sections with
Ground level Credit (GLC)
Capital investment subsidy schemes of Gol
Centrally sponsored schemes and
Externally aided project
Ground level credit flow
Year GLC (Rs in crore)
Annual Compound Growth 18.4 %
Rate (1999-2000 to 2003-04)
In order to augment the reach of bank
credit and increase the production of
commercial crops as also for creation of
marketing avenues for the farmers, all
contract farming arrangements (within and
out side AEZs) are made eligible for
availing special refinance package from
NABARD. The various initiatives
undertaken by NABARD in this direction
(i) Special Refinance package for financing
farmers for contract farming in AEZS
100% refinance to disbursements made by
CBs, SCBs, RRBs and select SCARDBSs
(having net NPA less then 5%) and softer
interest rates on refinance.
For NE states, ROI is 5.50% irrespective of
the loan quantum
Term facility for repayments (3 years)
(ii) Fixation of higher scale of finance for
crops under contract farming.
(iii) Extension of refinance scheme for
financing farmers for contract farming in
AEZs to contract farming outside AEZs and
includes medicinal and aromatic plants.
(iv) Extension of refinance scheme for
contract farming under Automatic Refinance
(v). For loan to finance processing industries
under investment credit, refinance is now
available for term loan up to Rs. 50 crore and
on case by case for amount more than Rs.50
Crore . ROI for refinance is 7%.
(vi) Financing State Govt. Infrastructure
Development under RIDF.
vii Preparation of banking plan for financing
DG sets to Gherkin farmers in Karnataka with
TFO – 1.71crore
viii Area Development project for grapes in
Maharashtra with TFO- 402crore.
ix Risk sharing with banks – Co- financing
Conducting workshop and exposure visits
for better interface among farmers and
entrepreneurs and popularization of
contract farming concept.
Conducting crop specific studies in
Gherkins, Grapes and Mango understand
the gamut of contractual arrangements.
Sensitization of stake holders through State
and Dist. Level meet and consultations.
Sensitisation of Bankers through tailor-
made training programme at Bankers
Institute for Rural Development (BIRD)
Follow-up with National Agriculture
Insurance Corporation for insurance of
crop grown under contractual
arrangements in AEZs.
Initiatives for expansion of scope of contract
farming for medicinal plants through
corporate initiatives- Reliance life line.
Key Potential Areas to increase the
production and productivity of
Higher returns per unit area through production
scheduling, proper post harvest management,
strategic marketing, processing and export are the
major thrust areas in horticulture sector. The
emerging opportunities for this sector in global
trade is placed at higher peaks. Market oriented
production systems, value addition and bulk
reduction are the key issues to be addressed for
the commercialization of India horticulture sector.
In this respect, focused interventions are as under.
Production of genuine quality planting
Area specific package of practices for
optimization of productivity.
Promoting dry land and wasteland
development through horticulture.
Stress on water management of horticultural
crops with micro irrigation technologies like
drip and sprinkler systems.
Developing captive farms to the advantage of
producers, processors and exporters.
Contract farming as a tool for
commercialization of horticulture sector.
Promoting organic production systems with
focus on export.
Market oriented/ demand driven/ export
oriented production systems.
Integrated value chain
Supply chain management
Orienting the production and post harvest
handling towards future market.
Integrated development of horticulture
including storage and on farm preservation
facilities, processing, marketing and export.
Modernisation of processing machineries for
better quality, saving in processing cost and
more efficient production.
Developing horti business opportunities
through linkage models for integrating Indian
farm gates with international food plates.
Strengthening the back ward and
Private participation in infrastructure
development, productions and agro
Involvement of NGOs, SHGs and
Krishi Vigyan Kendra (KVK) in the
development of Horticulture in the
Creations of the funds i.e. Market
Development Fund (MDF) and Agro
Processing Infrastructure Development
Fund (AIDF) to promote the agro-
processing in a big way.