agri input marketing

Farm Inputs & Management

Presented by-Neethish Varghese(1214)

Pankaj Agarwal(1215)

Shashank(1218)Yogesh Singh Rana(1224)

Agricultural (Input & Output) Marketing

Key Inputs

seed fertilizer PesticideFarm Power

Machinery

Credit & wage Rate

Farm Inputs


Seeds

O Any part of the crop from which a new crop will grow.(Agronomically)

O Seed is a fertilized ovule.(Botanically)

O Seed quality is estimated to account for 20-25% of productivity.

O World seed market is about 2,20,000 crore rs.

O Indian seed market size is about 9,000 crore rs.

O The seed replacement rate in most of the crops is very low, with the

exception of cotton and some other vegetablesSEED

GENERATIONS

NUCLEUS SEED

BREEDER SEED

FOUNDATION SEED

CERTIFIED SEED


Company turnover (In Million US$)


Indian Seed Industry

• Total Seed Industry is worth about 8000 – 9000 crores.

• Private sector accounts for 70% turnover in seed.

• Almost 1/3 companies have a global technology/financial partner.

• Private seed companies are spending 10 – 12% of their turnover in

research and development (R&D).

• R&D budget of medium sized companies is growing @ 20% per annum..

• At present the number of seed companies engaged in seed production or

seed trade is about 500 number.


Key Players in Indian MarketCompany Holding structure

Turnover (Crore)

focus

Mahyco Monsanto 1000 All crops

HLL Unilever 700 All crops

Proagro Aventis 600 All crops

Ankur 400 Cotton, vegetables

Namdhari 500 vegetables

Advanta Advanta & ITC 300 sunflower

Syngenta Syngenta 350 Corn, cotton, millet

Indo-American Family 300 Sunflower, cotton

Mahendra Hicks Mouse 300 Millets, cotton

Spic-phi POC 250 Corn, millets

Cargill Monsanto 200 Corn, sunflower

EID Parry Family, Monsanto

10 Sunflower, cotton

Nath Nath Group - Cotton, millets,corn

Total 9000

SOURCE: Seed division of DAC

Indian Company & it’s Turnover


Seed Replacement Rate


Seed export

O Currently, seed export from India is very minuscule at around 500 crore rs.

accounting for just 1% of total global seed export.

horticultural crops; 31%

maize; 15%

herbage crops; 12%

beet; 8%potato; 11%

wheat; 2%

other agri crops; 21%

Source: seed association of India


Protection of Plant Varieties and Farmers’ Rights Authority (PPV&FR)

O Enacted in 2001.

O Varieties of crops can have proprietary or Intellectual Property

Rights (IPRs) on them through either patent or plant variety

protection or a combination of both.

O The PPV&FR Authority registers plant varieties to protect

plant breeder’s rights, thereby stimulating R&D investment in

development of new plant varieties.


New Policy on Seed Development (NPSD)

O New Policy on Seed Development (NPSD), 1988 was formulated with a

view to provide the best planting material available abroad to Indian

farmers.

O import of seeds under various categories such as coarse cereals, pulses,

seeds of vegetables, flowers, etc. to improve agricultural production and

productivity.

O The policy permits an initial import of small quantity of cereals, oilseeds,

pulses, etc. for in-house trial by importer and multi location testing under

All India Coordinated Trials of ICAR.


OECD Seed SchemeO The objective of the Organization for Economic Cooperation and

Development (OECD) Seeds Scheme is to encourage use of seeds of

consistently high quality in participating countries.

O India’s participation in the OECD Seed Scheme was accepted by the

OECD in 2008 in respect of five seed schemes viz.

o (i) Grasses and Legumes

o (ii) Cereals

o (iii) Crucifers and other oil and fiber species,

o (iv) Maize and Sorghum and

o (v) Vegetables.


Production and consumption of Seeds in India

year Production of Breeder seeds (in Thousand Quintals)

Production of Foundation seeds (in lakh Qtls)

Distribution of certified /quality seeds (in Lakh Qtls)

1991-92 3.75 34.9 57.5

1995-99 4.76 43.36 69.9

2001-01 5.91 42.69 86.27

2005-06 7.4 68.64 126.75

2009-10 10.5 105 257.11

2010-11 17.53 119.21 277.3

Source: Directorate of economics and statistics, DACAgricultural (Input & Output) Marketing

All India Position of Requirement & Availability of Quality Seed(2010)

Year Requirements (In Lakh Quintal)

Availability (In Lakh Quintal)

Surplus (In Lakh Quintal)

2006-07 128.76 148.18 +19.42

2007-08 180.74 194.31 +13.57

2008-09 207.28 250.35 +43.07

2009-10 249.12 279.72 +30.60

1010-11 290.76 321.36 +30.60

2011-12 330.41 353.62 +23.21

Source; DAC, Seeds DivisionAgricultural (Input & Output) Marketing

National Seeds Policy, 2002

O The policy aims at enhancing food production targets achievable by

enhancing, the Seed Replacement Rates (SRR).

O The policy aims at creating an enabling climate for growth of a

competitive and vibrant seed industry, encouraging import of useful

germplasm and boosting exports.

O The thrust areas are varietal development and plant variety protection, seed

production,quality assurance, creation of infrastructure for seeds,

transgenics, import of planting material,export of seeds and promotion of

domestic seed industry.


The Seeds Bill, 2004

O aims to regulate the quality of seeds and planting material of all

agricultural, horticultural and plantation crops to ensure availability of

true to type seeds to Indian farmers:

• curb the sale of spurious,

• poor quality seeds ;

• protect the rights of farmers;

• increase private participation in seed production

• distribution and seed testing;

• liberalize import of seeds and planting materials


CHALLENGES

O There is a mismatch between the seed multiplication ratio from breeder

seed to foundation seed and from foundation seed to certified seed.

O Comprehensive and authentic databases on seed production and trade

need to be built up.

O The seed chain and the norms for quality control to be followed without

any compromises or shortcuts.

O For horticulture crops which have a long gestation period , it is imperative

to ensure that only such varieties are imported that are suited to Indian

conditions.


THE WAY FORWARDO A genetically diverse portfolio of improved crop varieties needed.O Timely delivery to farmers of high-yielding varieties requires big

improvements in the system that connects plant germplasm collections, plant breeding and seed delivery.

O Improving policies and legislation for variety development and release as well as seed supply.

O Enactment of flexible variety release legislation.O Strengthening capacity by creating a new generation of skilled practitioners

to support enhanced breeding.O Working with farmers to explore the ways in which crops and varieties

contribute to successful intensificationO Revitalizing the public sector and expanding its role in developing new crop

varieties.


Fertilizers

O macronutrients (6): nitrogen, phosphorus, potassium, sulphur, calcium magnesium -, present in plant tissue in quantities from 0.15% to 6.0% of dry matter

O micronutrients (8) : Molybdenum, Nickel, Copper, Zinc, Manganese, Iron, Boron, chlorine - present in plant tissue on the order of parts per million (ppm), ranging from 0.15 to 400 ppm DM, or less than 0.04% DM

O All nutrients fulfill specific functions in plants and cannot replace each other• All of them are equally important, regardless of the amount required

physiologically

• Lack of any single nutrient will limit crop growth even if all the other nutrients are fully available

• supply of all nutrients is essential to produce high yields of good quality


Global consumption of fertilizer

• The global fertilizer market 2010 – US$ 130 billion ; Volume – 163 mt 2015 – US$ 172 billion ; Volume: 183.5 million tons• Indian fertilizer market 2010 – US$ 24 billion ;Volume 28 mt


O Source: Coramandel, 2011

Global NPK market

• Consumption growing at 2.0 - 2.2%.• World NPK increased by 11% in 2009 and sales by 13% mainly due to K sales• India and China account for 40% of global consumption• Regionally concentrated availability:•N in Middle East, USA & FSU•P in North/West Africa, USA & Jordan•K in Canada, FSU & Middle East

Source: Coramandel, 2011


Global demand-supply situation for important fertilizers

•Globally, the fertilizer demand-supply scenario is comfortable with supply exceeding demand.

• Indian situation is different: by 2015, India is expected to face a demand-supply deficit of 8-9-mt of urea

• Indian industry can setup plants abroad to meet demand


Consumption, Production & Imports of Fertilizers

India: fertilizer use and crop production

O Use of fertilizer started in India with initiation of the planning process in early fifties

O Food grain production increased from 74mt in 1966-67 to 241.56mt in 2010-11

O India is the 2nd largest producer of Nitrogenous fertilizer and 3rd in production of phosphate fertilizer

O Potash is totally importedO India is 2nd to China in Nitrogen and Phosphorous consumptionO Fertiliser consumption in India is 16% ofglobal consumption

O Consumption chemical fertilizers during 2010-11 is 28.2 mt (16.6 mt N ,8.1 mt P & 3.5 mtK)

O Average consumption increase from 95 kg/ha in 2004-05 to 144.6kg/ha in 2010-11


Contd.

020406080

100120140

NPK(Kg/ha)

9%5%3%4%

2.00%5%

Rice 37%Wheat 24%Food Grains 8%Pulses 3%Oil Seeds 9%Sugarcane 5%Cotton 3%Vegetables 4%Fruits 2%Others 5%

Figure 2: Crops wise consumption of Fertilizer in India

Rice37%

Wheat24%

Food Grains8%

Pulses3%

Oil Seeds9%

Sugarcane5%

Cotton3%

Vegetables4%

Fruits2%

Others5% Rice

Wheat

Food Grains

Pulses

Oil Seeds

Sugarcane

Cotton

Vegetables

Fruits

Others

0

3

6

9

12

1950 1960 1970 1980 1990 2000 2010

Year

N, P

and

K (

Mt)

0

50

100

150

200

250

Foo

d gr

ain

(Mt)

N

P

K

Food grain

• Urea consumption increased from 1.1 MT to 28 MT during 1966-2010• Rice and wheat account for more than 60 percent of consumption• > 1/3 for rice• Nutrient Demand growth rate:

• N : 3%

• P : 6%

• K : 5%


Declining NUE in India


Fertilizer (Control) Order, 1985: • administered by Deptt. of Agriculture &Cooperation, Govt. of India • issued under the Essential Commodities Act, 1955. •Customized fertilizer of 36 grades and 9 fortified fertilizer have been included•5 bio fertilizer( rhizobium, azotobacter , azospirilllum , phosphate solubilizing bacteria , mychorrhizae) and 3 organic fertilizer(castor de-oiled cake , city waste and vermi-compost) have been included• defines:

• what substances qualify for use as fertilizers in the soil• product-wise specifications• methods for sampling and analysis of fertilizers• procedure for obtaining license/registration as manufacture/dealer in

fertilizers and • price fixation: fix maximum sale prices (MRP) of fertilizers – uniform across the country – to ensure fair access and price to farmers• Urea is the only fertilizer which is under price, distribution & movement control through (FCO) & Fertilizer Movement (Control) Order; Production and subsidy disbursement is regulated under Retention Price Scheme (RPS) administered by Fertilizer Industry Coordination Committee (FICC).

Fertilizer Policy


Consequences of subsidy policy – declining yield response

Reasons for declining response• Inadequate and imbalanced fertilizer use• Increasing multi-nutrient deficiency• Lack of farmers awareness about balanced plant nutrition• Lack of varietal breakthrough• Poor crop management• Declining organic matter in the soil Source: IFFCO/Salhotra, 2011


Impact of fertilizer subsidy


Nutrient Based Subsidy (2010)


NBS – subsidy rates 2010-11 on nutrients and products


NBS – subsidy rates 2010-11 on freight


Advantages of NBS for industry


PESTICIDES


O Pesticides are substances or mixture of substances intended for preventing,

destroying, repelling or mitigating any pest.

Pesticides are of major attention in India because –

Increasing demand for food grains.

Decreasing per capita land available for agriculture.

Low crop yield in India.

Estimated crop loss in India due to non usage of agro chemicals amount to Rs

90,000 cr p.a. (28% of yield).

Per hectare consumption of pesticide in India is 381gm which is low as

compared to the world average of 500 gm

INTRODUCTION


0

10

20

30

40

50

60

70

8072

61

43 40 42

55

Consumption of pesticides in India (Thousand tonnes)

Source: Directorate of Economics and Statistics, DAC

During Financial Year 2006 , production of pesticides dropped mainly due to lower intake in cotton crop which typically consumes the highest proportion of pesticides.


Pesticide Industry overview

It is mainly consolidated to top 9 companies accounting for over 80% of market

•Buyers have little choice but to buy the products from the same suppliers (eg. Monsanto engineers seeds that are tolerant only to its own herbicides to bridge its pesticides (“crop protection”) and seed businesses, increasing customers’ dependence on its products.


Market distribution of Agrochemicals in India by product category(% of total)

With increasing penetration of BT cotton ,usage of insecticides has witnessed a decline in the recent past. Its share in the total crop

protection chemicals has reduced from 69% in 2004 to 55% in 2009.

2004 2009


Crop wise pesticides consumption (%of total)

paddy28%

cot-ton20%

veg-etables

14%

fruit6%

wheat

6%

pulses

5%

oilseeds5%

others16%

cotton33%

paddy24%

fruits &veg-

etables21%

wheat8%

pulses &oilseeds

8%

others6%

2005


2009

Introduction of Bt cotton, pesticide usage on cotton decreased from 33% to 20% in 2009,while in paddy

increased popularity of hybrid varieties of rice lead to increased usage of pesticides.

Computerized Online Pesticide Registration System• A computerized online pesticide registration system was introduced in

July 2008 in the Secretariat of central Insecticides Board and Registration Committee (CIB&RC), Faridabad.

• The system enables pesticide companies to apply for registration of pesticide products and receive any query about deficiencies online.

Accreditation of Pesticide Analysis LaboratoriesTo ensure greater quality assurance in the pesticide analysis by notified laboratories under the Insecticides Act,1968,the Central Insecticides Laboratory and both Regional Pesticides Testing Laboratories have obtained accreditation from the National Accreditation Board for testing and Calibration Laboratories (NABL).

Major policy advancement & further roadmap


Intensive pest Surveillance and ManagementIn response to major pest attacks in recent years ,some states have implemented intensive pest surveillance and management systems for major crops vulnerable to pests and diseases under Rashtriya Krishi Yojana (RKVY),e.g.,Maharashtra in 2009 (for soyabean and pulses) and Orissa in 2010 (for Rice).

Contd.


Capacity Building - National Institute of Plant Health Management

• Capacity Buiding is an important area in Plant protection. The National Plant Protection training Institute (NPPTI),Hyderabad was converted in to a society in 2008 to give it more autonomy for human resource development in bio-security.

• The institute, renamed as the National Institute of Plant Health Management(NIPHM),is headed by a Director General.

Contd.


• Online plant quarantine services have been introduced in January 2011 to enable exporters to apply for a phytosanitary certificate and importers to apply for import permit and release order online. Of the plant quarantine work, 93 % now being conducted online.

• Round the clock (24x7) plant quarantine services have been introduced at Chennai, Mumbai and New Delhi.

• Phytosanitary certificates with standard format and enhanced security features have been introduced to prevent fraud.

• Five major Regional Plant Quarantine Stations (RPQS) located at Amritsar, Chennai, Kolkata, Mumbai and New Delhi have secured ISO 9001:2000 certification, an international standard for an organization’s quality management system.

Upgrading Plant Quarantine services


Pesticides regulations

O The Insecticides Act,1968O Prevention of Food Adulteration Act,1954O Water (Prevention & Control of Pollution) Act,1974O Air (Prevention & control of Pollution) Act,1981O Hazardous wastes (Management & Handling) Rules,1989O The Environment protection Act,1986O Bureau of Indian Standards Act


Farm Mechanization


Why Farm Mechanization

O Labour is available at a higher cost per hectare and this would increase the demand for mechanization.

O India is a growing economy and to support a growing population we would require not only efficient but machinery that would increase the yield of food grains and commercial crops.

O Mechanical power has replaced bullock power on Indian farms..


Evolution of Indian Agricultural Machinery

Processes Traditional Practice

Current Practice

Land DevelopmentTillageSeedbed preparation

Plough, Blade Harrow

TractorsMould Board PloughPower Tiller

Sowing & Planting Dibblers Seed DrillZero Till Seed-cum-Fertilizer Drill

Weeding Hand Hoes, Animaldriven Weeding Tools

Power Weeder

Plant Protection Dusters, Hand Sprayers

BlowerPower Spray

Harvesting & Threshing

Sickle, Animal Trampling

Self Propelled HarvestersTractor mountedHarvestersThreshersAgricultural (Input & Output) Marketing

ADVANTAGES

Increase in crop intensity and yield thus ensuring better returns to the farmer

Reduction of weather risk and risk of non-availability of labor thus minimizing post harvest wastages

Improved working conditions and enhanced safety for the farmer

Conversion of uncultivable land to agricultural land through advanced tilling technologies

Shifting land used for feed and fodder cultivation for draught animals towards food grain production

Increased rural employment.

ISSUES AND CHALLENGES

Highly diverse farm size & soil types: resulting in the need for customized farm

machinery and equipment. Skewed and seasonal usage resulting in low

economic viability Cattle population: Increased mechanisation

results in surplus draught cattle and their upkeep is a concern for the farmers.

Extension service: Education and training for efficient usage of farm equipment is required to be imparted along with knowledge about selection of appropriate machinery.

Economic Advantage of Mechanization(%)Increase in Productivity 12-34Saving in seeds 20Saving in Fertilizers 15-20Enhancement in cropping intensity 5-22Increase in gross income of farmer 29-4Source: report on Agricultural Implements and Machinery, GOI


CUSTOM HIRING

Less Farm HoldingsHigh Cost of machineries

Scattered FarmsPoor purchasing power of Farmers

Custom Hiring, allows a farmer to gain short- term control of a combine without investing a large amount of capital.Advantages:• No long term capital investment.• No repair costs.• No cost for operating and maintaining the machine.Disadvantages:• Unavailability of competent operator nearby.


49

· Market size: Approximately 370 000 units annually

· Market growth: 4-5% per annum

· Price sensitive market; sales dependant on Government subsidy; no subsidy on tractors above 30 HP

· Domestic sector growing due to an increase in the irrigated area, Government policy related to export which decides crop switching by farmers

· Smaller tractors are very popular (35-40 HP); this is the fastest growing segment

· one third are for non agricultural uses i.e. for transport and haulage

• Low Penetration Level: 17 for every 1000Hectares

Major brands:

Market - Tractors

Source: Italian Trade Commission, 2010Agricultural (Input & Output) Marketing

50

0

50000

100000

150000

200000

250000

300000

year

trac

tors

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

pow

er ti

llers

tractors power tillers

Machinery• demand driven by development, labour scarcity, infrastructure, services

• improved equipment tools contribute to savings in seeds (20%), fertilizers (20%), time (20-30%) and labour (20- 30%)

• steady growth of manually operated tools: drills, cutters, sprayers, threshers

• growth in animal operated equipment: ploughs, disc harrows, drills, puddlers

• steady growth in mechanical and electrical power operated equipment: pump sets,sprayers, ploughs/drills, threshers, combines

•India largest manufacturer of tractors (>60% < 60hp)

•Annual sale of tractors: 2.5 lakh


IRRIGATION

O Irrigation potential is about 140 mha.O 58.4mha from major and medium irrigation sources, and 81.5 mha

from minor irrigation sources.O Ground water provides 70% of irrigation water.

Challenges:O Persistent gap between the assessed ultimate irrigation potential and

actual potential that has been put to use.O Inefficient water use in irrigation is leading to environmental

degradation via waterlogging.

Efficiency in systems needs to be upgraded from present level.

Methods of Micro-irrigation should be taken in use for better utilisation of water.

It include Drip and Sprinkler irrigation system.


Market Share of major Irrigation Companies in India

Jain Irrigation55%

Netafim25%

Na-gar-juna Grou

p6%

Parikshit In-

dus-tries5%

Premier Irri-

gation

3%

EPC3%

others3%

Jain Irrigation and Netafim constitute 80% of market share

The size of the market for micro irrigation systems, is around Rs 3,000 crore in India.(http://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agri)

Jain Irrigation: 1650 crores₹Netafim: 750 crores₹

Source: FICCI(Federation of Indian Chambers and Commerce and Industry)


http://articles.economictimes.indiatimes.com/2011-07-31/news/29835726_1_oil-palm-sprinkler-irrigation-agri




Presentation on Agricultural Wages and Labour

Introduction

O India level, approximately 60 percent of the rural labour force

and 45 percent of the urban labour force is self-employed.

O Rural casual labour constitutes the single largest segment of

the total workforce in India. Among rural casual labourers,

agricultural labourers occupy a predominant position.

O The rural agricultural wage rate, hence, is considered as one

of the most robust indicators of economic well-being, not only

of agricultural labourers, but also of the overall rural

population.

Agriculture & Labour

O Agriculture is a labour intensive activity.O Cost of cultivation data shows that labor accounts for more than 40

percent of the total variable cost of productionO Raising the wage levels of casual workers both in agriculture and non-

agriculture sectors needs adequate policy attention. In this regard, stricter implementation of the Minimum Wages Act, 1948 and targeted employment generation programmes are important.

O Agricultural wages have been traditionally low due to low productivity, large disguised unemployment in agriculture due to lack of sufficient employment opportunities elsewhere.

O In recent years there is a perceptible change in this trend due to rapid economic growth and adoption of policies for employment generation including promotion of self employment opportunities.

MGNREGAO MGNREGA, enacted on September, 2005O Provides for the enhancement of livelihood security of the households

in rural areas of the country by providing at least one hundred days of guaranteed wage employment.

O It has prevented distress migration and helped in empowerment of women.

O It has also led to a substantial increases in the wage rates of agricultural and non-agricultural laborers, reduced the availability of labour for agricultural operations and increased the cost of cultivation.

O Major policy measures influencing the wage increase are MNREGA and Minimum Wages Act implemented by the government.

AGRICULTURAL CREDIT

According to Samuelson

“ Credit is the use of someone else’s funds in exchange for a promise to pay with or without interest at a later date”

“ Farm Credit or Agriculture Credit is the count of loan or Credit obtained form any source for the promotion & development of

Agriculture”

What is Credit?

Problems of Agriculture Credit

• Small Units• Damage to crops & Land• Low & Uncertain yields & incomes• Lack of Credit worthiness & Security• Small & large cultivators• Unproductive uses• High Cost• Limited flow of Capital to Small Farmers• Delayed disbursement of Credit

Measures to Solve those Problems

• Agriculture Credit Institutions• Agriculture Credit Advisory Committee (1972)• Special Schemes (1977 extend credit amount)• Recovery of Loan• Finance in kind & supervised• Pass Book System

Sources of institutional Agricultural credit percentage

39%

8%

53%

0.2%

2000-01

co-operative bankRRBsCommercial banksother agencies

16%

10%

75%

2010-11

co-operative bankRRBsCommercial banksother agencies

ROLE OF NABARD IN CREDIT• NABARD Would facilitate the formation and financing of group of

tenant farmer by organizing them into Tenant farmer group.

• The objective of the scheme is to provide crop loan through institutional

agencies to tenant farmers, oral lessees and share croppers, who are not

being extended credit support.

• NABARD would extend refinance support to RRBs and state

cooperative Bank/District central cooperative Bank to the extent of

100% of the loan provided by the Bank to the TFGs.

• NABARD is facilitating implementation of SHG-bank linkage

programme through commercial NGOs, state government departments,

farmers club, individual rural volunteers, etc. since 1992 onwards.

Role of Vaidyanathan committee

O On the basis of recommendations made by the Vaidyanathan committee

task force , the government of India had approved a Revival package for

short term Co operative credit structure (STCCS) aimed at making it a

well managed and vibrant structure to rural India.

O Revival package(13,597crore) seeks namely to (1) provide financial

assistance to bring the system to an acceptable level of health.(2)

introduce legal and institutional reforms necessary for their democratic,

self-reliant and efficient functioning, (3) Take measure to improve the

quality of management as an integrated package.

Agricultural Debt waiver and Debt relief scheme (ADWDRS) 2008

O The main aimed of ADWDRS at de-clogging the lines of credit that were choked due

to the debt burden on the farmers and to entitle these farmers for fresh credit.

O All Agricultural loans disbursed by public sector Banks, private sector bank ,

cooperative bank, local area bank, and regional rural banks between 1st April ,1997 to

31 March, 2007 to farmers overdue as on 31 December 2007 and remaining unpaid up

to 28 february,2008 were eligible for Debt waiver Debt relief.

O For marginal farmers there was a complete waiver of loans that were over due on

31,December 2007 and which remained unpaid until 29 February ,2008.

O In respect of other farmer, there was a provision for One time settlement (OTS)

scheme for all loans that were over due on December 31, 2007 and which remained

unpaid until February 29 ,2008

KISAN CREDIT CARD

O One of the major challenges in the sector has been ensuring the provision of timely and adequate credit to the farmers.

O An innovative strategy conceived in 1991 by the GOV of India created the kisan credit cards(KCC) through which farmers could avail short term loan for crops from Bank.

O The scheme was initiated in consultation with the Reserve Bank of India , NABARD, and by the end of October, 2011 10.78 crore KCC were issued .

O It is essentially a type of revolving cash credit facility with withdrawals and repayment to meet the production credit needs, cultivation expenses and contingency expenses of the farmers.

CROP INSURANCE

Objectives of Crop Insurance

O To provide insurance coverage and financial support to the farmers in the event of prevented sowing & failure of any of the notified crop as a result of natural calamities, pests & diseases.

O To encourage the farmers to adopt progressive farming practices, high value in-puts and higher technology in Agriculture.

O To help stabilize farm incomes, particularly in disaster years.

Existing Crop Insurance Schemes

I. NAIS: yield based; non-actuarial premium except horticultural

crops / annual commercial crops; underwriting of losses by Central &

State Govt. on 50:50 ratio

II. WBCIS: Weather-based Crop Insurance Scheme is intended to provide

insurance protection to the farmers against adverse weather incidence.

III. CPIS: plant based; actuarial premium

IV. MNAIS: yield based; actuarial premium with premium subsidy shared

equally by Central & State Govt.

NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS)

O For improving the scope and content of CCIS a broad based NAIS was

introduced from Rabi 1999-2000.

O NAIS provides for greater coverage of farmers, crops and risk commitment.

O Premia-structure has been rationalized and the scheme is required to operate

at smaller unit area of insurance.

O Subsidy to Small and Marginal farmers.

O It is presently being implemented by 25 States & 2 Union Territories

MNAIS- Present StatusO Implemented in 34 districts covering 22 States during Rabi 2010-11 season

O The scheme would be on actuarial regime in which insurance company will receive premium on commercial basis and will be responsible for all claims

O GOI & State Govts. will provide premium subsidy upto a max. of 75% at different slabs of actuarial premium to make the scheme affordable for farmers

O The coverage in Pilot MNAIS is expected to 25% of total farmers of 50 districts.

Challenges share in total credit for cultivator

household was only 61 percent in 2002. This shows that the cultivator households are not able to come out of the clutches of money lenders and other non-institutional sources.

It is also reported that only 27 percent of the total number of cultivator households received credit from formal sources while 22 percent dependent on informal sources. The remaining households, comprising mainly small and marginal farmers, had no credit outstanding.

Comprehensive new measures are needed in terms of innovative products and services to increase access to institutional credit.

Complex documentation processes and high transaction cost in taking loans require attention.

It is highly desirable to provide a KCC to all farmers in the country and to raise credit the limit, from time to time as needed.

The Way Forward

agri input marketing

Business

o seed quality

seed production

seed export o

agronomically o seed

seed schemes

seed trade

oecd seed scheme o

o world seed market