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Extension and Credit in Horticulture by Prof. M.R. Sharma CHIEF CONSULTANT NATIONAL HORTICULTURE MISSION Krishi Bhawan New Delhi Extension and Credit in Horticulture 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. Cont. 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 crores. Retrospect and Prospects of Horticulture Sector 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 respect to Ground level Credit (GLC) Refinance support Co financing RIDF projects Capital investment subsidy schemes of Gol Centrally sponsored schemes and Externally aided project Ground level credit flow Year GLC (Rs in crore) 2001-01 755 2001-02 765 2002-03 1195 2003-04 1436 Annual Compound Growth 18.4 % Rate (1999-2000 to 2003-04) Policy Initiatives 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 are : Financial Interventions (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 Facility. (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 Developmental Interventions 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. Cont. Sensitisation of Bankers through tailor- made training programme at Bankers Institute for Rural Development (BIRD) Lucknow. 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 Horticulture crops 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. Cont. Production of genuine quality planting material 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. Cont. 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. Cont. Market oriented/ demand driven/ export oriented production systems. Integrated value chain Supply chain management Orienting the production and post harvest handling towards future market. Cont. 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. Cont. Strengthening the back ward and forward linkages. Private participation in infrastructure development, productions and agro processing sectors. Involvement of NGOs, SHGs and Krishi Vigyan Kendra (KVK) in the development of Horticulture in the Country. Cont. 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. National Commitment.
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