77604

INDIAN INSTITUTE OF BANKING & FINANCE
Coverage
1. Importance of Agriculture
2. Important Sectors of Agriculture
3. Agriculture Resources wise Position of India
4. Problems of Indian Agriculture
5. Sources of Agriculture Finance
6. Targets of Agriculture Finance
7. Growth Drivers and Opportunities in Agriculture
8. Latest Trends in Agriculture
9. Some latest initiatives of Government
What is Agriculture?
Agriculture is the art and science of:-
-cultivating the soil, growing crops and raising livestock.
It includes the:-
-preparation of plant and animal products for people to
use and their distribution to markets.
Important Branches of Agriculture:-
Agronomy:-Study of crops and the soils in which they grow.

Animal husbandry:- Practice of breeding and raising livestock.
Other Branches of Agriculture?

“Culture” has originated from Latin word ”cultura “ which means
cultivating.
Can you name some other branches of agriculture,

ending with the term “culture”?
Branches of Agriculture?
Aquaculture Pisciculture
Apiculture Sericulture
Arboriculture Silviculture
Cuniculture Vermiculture
Floriculture Viticulture
Fungiculture
Horticulture
Mariculture
Moriculture
Other Branches of Agriculture? 1/2

Aquaculture:- Farming of fish.
Apiculture:- Beekeeping, especially on large scale.
Arboriculture:- Cultivation of trees and shrubs.
Cuniculture :- Rearing of Rabbits.
Floriculture :- Cultivation of Flowering plants.
Fungiculture:- Cultivation of Mushroom
Horticulture :- Cultivation of fruits etc.
Mariculture :- Cultivation of Marine Fish.
Moriculture :- Cultivation and production of Mulberry.
Some Branches of Agriculture 2/2

Pisciculture :- Rearing of Fishes.
Sericulture:- Commercial rearing of silkworm
Silviculture:- Forest planting-growing of trees for timber production
Vermiculture :- Breeding of Earthworms mainly for making fertilizers
Viticulture :- Study, cultivation, and harvesting of grapes and vines
Importance of Agriculture
a).Employment:- Over two-thirds of our working population are engaged directly on agriculture.
Largest employment provider. About 54.60 % of our total workforce is engaged in Agriculture and
Allied activity. (Census 2011)
b). Contribution to GVA: Agriculture is contributing a major portion to our GVA. As per the
estimates of National Income released on 7th January 2022, agriculture and allied sectors
contributed approximately 18.80% of India’s GVA at current prices during 2021-22.
c) Contribution to Export: The provisional data of DGCI&S showed that agricultural exports have
grown by 19.92% during 2021-22 to touch $ 50.21 billion. The growth rate is remarkable as it is
over and above the growth of 17.66%, at $41.87 billion, achieved in 2020-21 (Mint- 6th April 2022)
d) Food Security: Source of food supply to huge size of population of our country.
e) Role for Industrial Development: Agriculture in India has been the major source of supply of raw
materials to various important industries of our country.
f) Trade Importance: Indian Agriculture is playing a very important role both in the internal and
external trade of the country. Agricultural products like tea, coffee, sugar, tobacco, spices, cashew-
nuts etc. are the main items of our exports.
Landmark Agricultural Exports Achieved in FY 2022

(NABARD Annual Report FY 21-22)
INDIA IS NUMBER 1 IN PRODUCTION OF
1
INDIA IS NUMBER 2 IN PRODUCTION OF
2
Agriculture Gross Value Added (GVA)

(Source: Annual Report 20-21)
Agriculture Gross Value Added (GVA): As per the estimates of National Income released on 7th January 2022,
agriculture and allied sectors contributed approximately 18.80% of India’s GVA at current prices during 2021-22.
GVA of agriculture and allied sectors and its share in total GVA of the country at current prices during the last 5 years is
as follows:
(Rs in crores)
Items Years
2017-18 $ 2018-19 # 2019-20 @ 2020-21 * 2021-22 **
GVA of
Agriculture
28,29,826 30,16,277 33,94,033 36,16,523 39,45,411
and Allied
Sectors
Per cent 18.30 17.60 18.40 20.20 18.80
to total
GVA
$-Third Revised Estimates, #-Second Revised Estimate, @-First Revised Estimate, *- Provisional
Estimates of 2021, **- First Advanced Estimates released of National Income released on 7/1/2022
GVA is sector specific, and GDP is calculated by summation of GVA of all sectors of economy with
taxes added and subsidies deducted.
Agricultural Resource Wise Position of India

India has vast area of arable land resources in the world.
With 15 Agro-climatic zones, all major climates in the world exist in India.
The country possesses 46 of the 60 soil types in the world.
Food grain production (2018-19) was at a level of 285.20 million tons. For 19-20 it was
297.50 Million Ton. Estimates for 20-21 is 308.65 Million Ton. Further, the production
during 2020-21 is higher by 29.77 million tonnes than the previous five years' (2015-16 to
2019-20) average production of foodgrain. (AR 21-22)
 Production of horticulture crops for 2019-20 was 319.56 Mn Ton. For FY 2020-21 it is
331.05 Million Tonnes.
Agricultural Exports from India reached US$ 50.21 billion in FY 21-22
Gross Value Added by agriculture and Allied

Sectors is estimated at Rs 19.68 trillion in FY 19-20.
(Annual Report 21-22) at 2011-12 basic prices.
Agriculture and allied sector’s GVA at constant

2011-12 prices grew at CAGR (compounded
annual growth rate) of 3.56 per cent between
FY12-18. It has increased to CAGR 3.7% between
2018 and 2022.
As per Union Budget 2022-23, allocation of Rs 1.24

Lakh Crores has been made for the Agriculture
Ministry. .
Food-grain Production and Horticulture Production

FOODGRAINS PRODUCTION HORTICULTURAL PRODUCTION
Food Grain Production in 20-21 was Rs 308.65 Million Tonnes and Horticulture
Production in 2020-21 was Rs 331.05 Million Tonnes (AR 21-22)
 Marine Products, Buffalo Meat and rice are

largest agricultural export items in terms of
value.
 Other major export items are spices, cotton, oil

products, tea and coffee.
 Marine product exports reached US$ 7.39

billion in FY18, followed by Basmati rice at US$
4.16 billion and buffalo meat at US$ 4.03 million.
 An agreement to export fish meal and fish oil

from India to China was signed.
Challenges for Indian Agriculture

1. Small and fragmented land-holdings (It is apprehended that by 2030
land holding by all will be below 5 Acre)
2. Remunerative prices
3. Seeds (only 25% of land is under High Yield Variety)
4. Manures, Fertilizers and Biocides
5. Irrigation
6. Lack of mechanisation
7. Depletion of soil fertility and Soil erosion
8. Agricultural Marketing
9. Inadequate storage facilities (Agrl produce of Rs 1 lakh cr wasted p.a.)
10. Inadequate transport
11. Scarcity of capital
Scope for Reforms

1. Modernise the Sector
2. Develop the Agriculture Market
3. Promote Exports of Agri and Processed commodities
4. Consolidate Small and Marginal Farm- lands
Some Initiatives:-
1. 1800 180 1551 --Kisan Call Centre
2. farmer.gov.in --Farmer’s Portal
3. Kisan Suvidha --Mobile App
4. Jaivik Kheti --Organic Farming
5. pmfby.gov.in --Crop Insurance
6. DD-Kissan -- TV Channel
Doubling Farmers’ Income - Strategies

Government constituted an Inter-ministerial Committee in April, 2016 to examine issues
relating to “Doubling of Farmers Income” and recommend strategies to achieve the same
by 2022-23..
The Committee submitted its Report to the Government in September, 2018 and
thereafter, an Empowered Body was set up on 23.01.2019 to monitor and review the
progress as per these recommendations.
To achieve this, the Committee has identified seven sources of income growth viz.,
1) improvement in crop productivity;
2) improvement in livestock productivity;
3) resource use efficiency or savings in the cost of production;
4) increase in the cropping intensity;
5) diversification towards high value crops;
6) improvement in real prices received by farmers; and
7) shift from farm to non-farm occupations.

1) Focus on irrigation with large budgets, with the aim of
"per drop, more crop"
2) Provision of quality seeds and nutrients based on soil health of each
field
3) Investments in warehousing and cold chains to prevent post-harvest
crop losses
4) Promotion of value addition through food processing
5) Creation of a national farm market, removing distortions and
development of infrastructure such as e-platform across 585 stations
6) Strengthening of the crop insurance scheme to mitigate risks at
affordable cost
7) Promotion of ancillary activities like poultry, bee-keeping and fisheries

Besides, the latest major interventions include the ‘Atma Nirbhar Bharat – Agriculture’ which includes
comprehensive market reforms and creation of ‘Agricultural Infrastructure Fund (AIF)’ worth Rs. 1 lakh
crores including Rs 500 crores for the Bee-Keeping initiative. In addition to this several market reforms
have been rolled out. These include
a. Model Agri Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017
b. Establishment of 22,000 number of Gramin Agriculture Markets (GrAMs) as aggregation platforms
c. Agri-Export Policy, that targets to double agri-exports by 2022
d. The Farmers Produce Trade and Commerce (Promotion & Facilitation) Act, 2020- Since withdrawn
e. The Farmers (Empowerment & Protection) Agreement on Price Assurance and Farm Services Act, 2020-
Since withdrawn on 29th Nov 21
f. Amendments to Essential Commodities Act, 1955, that deregulates various agri-commodities- Since
withdrawn on 29th Nov 21
g. Promotion of 10,000 FPOs by 2024
The Government also created Corpus Funds for the benefit of farmers such as :
a. Micro Irrigation Fund – Rs. 5,000 crores
b. Agri-Marketing Fund to strengthen eNAM and GrAMs – Rs. 2,000 crores
16-Point Action Plan to Revive Agricultural sector BUDGET 2020

1. Agricultural Laws: To encourage the state governments to follow the model of
agricultural laws. (Model APMC Act, Model Agriculture Land Leasing Act, Contract
Farming Act)
2. Water Stress: Comprehensive measures are proposed to address water issues in 100
water-stressed districts of India.
3. Balanced use of fertilizers: There is a need to encourage a balanced use of fertilizers and
this is a necessary step to change the prevailing incentive regime which promotes
chemical fertilisers. It ensures the application of fertilizers in optimum quantities
and in right proportion through appropriate methods, which in turn results in
sustenance of soil fertility and crop productivity. Balanced fertilization leads to
building up soil health, while imbalanced fertilization leads to soil mining and its
sickness.
4. Creation of Solar Power Stations: Government to push for renewable energy through
PM KUSUM scheme. It is proposed that 20 lakh farmers will be helped in setting up
standalone solar power sets for solar power generation - which can be sold to the
Discoms - on their barren lands. Another 15 lakh farmers will be assisted to set up solar-
aided pumps.

5. Cold Storage Creation: India has an estimated capacity of 162 million metric tonnes of cold
storage and warehousing and these facilities will be geo-tagged by NABARD. Agri-
warehousing will be encouraged and the state governments will help with the land.
6. Village storage scheme: A village storage scheme is proposed which will be run by SHGs. This
scheme will also allow women SHGs to regain their position as 'Dhan Lakshmi' and they can avail
Mudra loans for opening storage facilities.
7. Kisan Rail: To build a seamless national cold supply chain for perishables, Indian Railways will set up
Kisan Rail through PPP model so that perishable goods can be transported quickly. On 7th Aug 2020
Friday country's first 'Kisan Rail' train was flagged off from Deolali in Nashik to Danapur in Bihar
carrying banana, grapes etc.

8..Krishi Udaan scheme: Ministry of Civil Aviation will be launching Krishi Udaan scheme
on national and international routes, for transporting agri products of farmers.
9. Promotion of Horticulture: Horticulture exceeds the production of food grains and
that's why the government will support states to focus on promoting horticulture and
adopt one district one produce (ODOP).
10. Jaivik Kheti portal: The portal on the national organic product market, jaivik kheti,
will be strengthened.
11. E-warehousing: Financing of e-warehousing will be integrated with eNAM. The e-
NWR will be useful when farmers deposit their produce in warehouse regulated by the
Warehouse regulator and that warehouse has to be notified as a sub-mandi or market
yard. The Government has already asked states to follow the model APMC Act which
also mandates notifying warehouses as market yards. Loans against Negotiable
Warehouse Receipts/ eNWRs upto Rs 75 lacs will be classified as Priority Sector.
--- continued--
16-Point Action Plan to Revive Agricultural sector

12. Agricultural credit availability: NABARD refinance scheme will be further
expanded. The Agri credit for the fiscal 22-23 has been set at Rs 18 lakh cr.
13. Disease elimination: The government intends to eliminate foot and
mouth diseases affecting livestock.
14. Milk Capacity: Milk Processing capacity will be doubled to 108 million
metric tonnes by 2025 from 53.5 MMT in 2020.
15. Blue Economy: The fish production will be raised to 2 lakh tonnes.
Marine fishery boost will help the youths in coastal areas as the government
will involve youth in fisheries through Sagar Mitra scheme.
16. Mobilisation of SHGs: 58 lakh SHGs have been mobilised under the
poverty alleviation program
Government Initiatives May-June 2020 in view of

impact of COVID 19 on Farmers
1. MSP: Hike in the MSP for 14 Kharif crops. Increase in MSP rates would translate into
50 to 83 per cent profit to the farmers against their cost. MSP rate for paddy, jowar,
bajra, ragi, moong, groundnut, soyabean, cotton etc increased for the year 2020-21.
MSP further increased on 21st Sep 20 for six crops wheat, chana, masoor, mustard,
jowar and kusum.
CACP- Commission for Agriculture Costs & Prices,
1. Cost of Cultivation- A2 - Cash Expenses
2. Cost of Cultivation- A2 +FL -Cash Expenses + Family Wages
3. Cost of Cultivation- C2 - A2+FL + Interest on Agrl Capital etc
2. Repayment Period Extension: Repayment date extended upto 31.08.2020 for
Standard Short-Term loans upto Rs 3 lakh advanced for agriculture and allied activities
by banks, which have become due between 1st March, 2020 and 31st August, 2020
with continued benefit of 2% Interest Subvention and 3% Prompt Repayment
Incentive.
Government Initiatives May-June 2020 in view of

impact of COVID 19 on Farmers
3. Funding Agriculturel Infra Projects:
Financing facility of ₹1 lakh crore will be provided for funding in agriculture infrastructure
projects at the farm-gate and aggregation points such as primary agricultural cooperative
societies, farmer producer organisations and agriculture entrepreneurs, among others. The
lack of adequate cold chain and post harvest management infrastructure in the vicinity of
farm gate causes gaps in value chains.
4. From ‘TOP’ to TOTAL: Ministry of Food Processing Industries (MoFPI) has on

11/6/2020 extended the “Operation Green” Scheme - as part of Aatmanirbhar
Bharat Abhiyan. Rs 500 crores provided. Expansion of ‘Operation Green’ from 3 crops
(onion, tomato, and potato) to 22 perishable commodities will improve efficiencies
of supply chains, dampen price fluctuations, and boost agricultural exports. It is
to protect the food and vegetable growers from distress sale. Subsidy on transportation
and storage charges.
Government Initiatives May-June 2020 in view of impact of

COVID 19 on Farmers (Repealed on 29th November 2021)
5. Reforms: (Bills enacted in Sep 2020 and repealed on 29th November 21)
a. First, a host of agriculture commodities are being taken out of the ambit of the
Essential Commodities Act (ECA), after which cereals, edible oil, oilseeds,
pulses, onions and potato will be deregulated. No stock limit will apply to
processors or value chain participants following amendment to the Essential
Commodities Act.
b. Second, a new set of legal framework will be created to promote contract
farming in India. Private Investment, Scale of operations and diversity of farm
produce.
c. Third, barriers that were hitherto restricting the movement of agricultural
products across the states will be knocked out. Adopting a one-nation-one-
market model will effectively address inefficiencies in the agrarian landscape,
which is dominated by too many intermediaries.
These three reforms have the potential to completely change the face of rural India.
Union Budget 22-23 (Proposals)

Agriculture Sector: Key Takeaways
1..The total budget allocated to the Department of Agriculture and Farmers’ Welfare stands ₹1.24
lakh crore, , i.e. 3.1% of the total projected expenditure for 2022-23.
2. Direct payment of MSP to farmers:- The Budget has earmarked ₹2.37 lakh crore as direct
payments as MSP to 163 lakh wheat and paddy farmers.
The Government's price policy for major agricultural commodities seeks to ensure remunerative
prices to the growers for their produce and to safeguard the interest of consumers by making
available supplies at reasonable prices. Government announces Minimum Support Prices (MSPs)
for twenty two (22) mandated crops and Fair and Remunerative Prices (FRP) for sugarcane at all
India level based on the recommendations of the Commission for Agricultural Costs & Prices (CACP).
The 22 mandated crops include 14 Kharif crops viz. paddy, jowar, bajra, maize, ragi, tur (arhar),
moong, urad, groundnut, soybean (yellow), sunflower seed, sesamum, nigerseed, cotton and 6 Rabi
crops viz. wheat, barley, gram, masur (lentil), rapeseed & mustard, safflower and two commercial
crops viz. jute and copra.

3. International Year of Millets (ragi, Bajra etc):- In line with The United Nations (UN)
General Assembly declaring 2023 as the International Year of Millets, the Finance Minister
has announced support for post-harvest value addition of millets to enhance domestic
consumption, along with support for branding millet products nationally and
internationally.
4. Boost to domestic production of oilseeds:- The Budget assures the implementation of a
rationalised and comprehensive scheme to boost domestic production of oilseeds,
intending to reduce the country’s dependence on imports.
5. Endorsements for Natural Farming:-The Government will promote chemical-free

natural farming across the country. As a first step, the focus will be on farmlands in
5-km-wide corridors along river Ganga.

6. Support for digital, hi-tech services, and startups:- To launch a scheme in the PPP model
to deliver digital and hi-tech services to farmers, which will bring together public sector
research and extension institutions, private agri-tech players, and stakeholders in the agri-
value chain. ‘Kisan Drones’ for crop assessments, land record digitisation, and to spraying
insecticides and crop nutrients.
7. Further push for Food Processing Industry:- To provide a comprehensive package for
farmers to adopt suitable fruit and vegetable varieties that can be processed.
8. Transition to a carbon-neutral economy:- Actions announced toward attaining a carbon-
neutral economy is to co-fire 5-7% biomass pellets (biomass fuel, generally made from
wood wastes) in thermal power plants to achieve carbon-dioxide savings of 38 million
metric tonnes annually.
Flow of Credit to Agriculture
• As per Budget 2022 (FY 22-23) the government has increased the agriculture
credit target to Rs 18.00 lakh crore. It is worth noting that 1% increase in
Agriculture credit results in 0.29% increase in Agriculture GDP.
• The actual agricultural credit flow for first six months of 21-22 was ₹ 7.36 lakh
crore against the annual target of ₹16.50 Lakh crore.
Co operatives PACS
CENTRAL CO-
Commercial OP BANKS
banks
STATE CO OP
BANKS
Land
Development
Banks
Institutional
RRBs
AGRICULTURAL
FINANCE Government
Money
lenders
NABARD
Non-
Institutional Traders,
commission
agents etc
RELATIVES
?
Domestic commercial banks and foreign banks with 20
Categories
branches and above
Total Priority Sector 40 % of Adjusted Net Bank Credit (ANBC) or
Credit Equivalent of Off Balance sheet Exposure (CEOBE),
whichever is higher (refer RBI Master Cir on Exposure Norms
for credit equivalent)
Agriculture 18 % of ANBC or CEOBE
Of which to Small and 10 % ** (In phased Manner by 23-24:- 8, 9, 9.5, 10 %)
Marginal Farmers
Micro Enterprises 7.5 % of ANBC 0r CEOBE
Advances to Weaker 12 % ** (In phased manner by 23-24:- 10, 11, 11.5, 12 %)

Sections (Ref-RBI Master Direction dt 4th September 2020)
ANBC
Bank Credit in India *As prescribed in item No.VI of Form ‘A’ under Section 42(2) of the RBI Act] I
Bills Rediscounted with RBI and other approved Financial Institutions II
Net Bank Credit (NBC) * III (I-II)
Outstanding Deposits under RIDF and other eligible funds with NABARD, NHB, SIDBI and MUDRA IV
Ltd. In lieu of non-achievement of priority sector lending targets/sub-targets + outstanding PSLCs
Eligible amount for exemptions on issuance of long-term bonds for infrastructure and affordable V
housing as per circular DBOD.BP.BC.No.25/08.12.014/2014-15 dated July 15, 2014.
Advances extended in India against the incremental FCNR(B)/NRE deposits, qualifying for VI
exemption from CRR/SLR requirements
Investments made by public sector banks in the Recapitalization Bonds floated by GOI VII
-Other investments eligible to be treated as PS (e.g. Investments in securitised assets) VIII
-Face Value of securities kept under HTM category under TLTRO 2.0 and SLF-MF scheme. IX
-Bond/debentures in Non-SLR categories under HTM category X
-For UCBs, investment after 30/8/2007 in permitted non-SLR bonds under HTM category XI
ANBC (Other than UCBs) - III+IV-(V+VI+VII)+VIII-IX+X
ANBC for UCBs- - III+IV-VI-IX+XI
* For the purpose of priority sector computation only. Banks should not deduct / net any amount like
provisions, accrued interest, etc. from NBC
?
Marginal Farmers: Landholding Upto 1 hectare.
Small Farmers : Landholding >1 hectare and upto 2 hectares
Landless agricultural labourers, tenant farmers, oral lessees and share-croppers,
whose share of landholding is within the limits prescribed for SMFs.
Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of
individual SMFs directly engaged in Agriculture and Allied Activities,
Loans upto Rs 2 Lakh to individuals solely engaged in allied activities without
any accompanying land holding criteria.
Loans to FPOs/FPCs of individual farmers, and co-operatives of farmers directly
engaged in Agriculture and Allied Activities, where the land holding share of
SMFs is not less than 75 %, subject to overall limits prescribed for FPO/FPC etc.
UCBs are not permitted to lend to cooperatives of farmers.
Weaker Sections
(i) Small and Marginal Farmers
(ii) Artisans, village and cottage industries where individual credit limits do not exceed Rs.1
lakh
(iii)Beneficiaries under Government Sponsored Schemes such as National Rural Livelihood
Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment
Scheme for Rehabilitation of Manual Scavengers (SRMS)
(iv) Scheduled Castes and Scheduled Tribes
(v) Beneficiaries of Differential Rate of Interest (DRI) scheme
(vi) Self Help Groups
(vii) Distressed farmers indebted to non-institutional lenders
(viii) Distressed persons other than farmers, with loan amount not exceeding Rs.1 lakh per
borrower to prepay their debt to non-institutional lenders
(ix) Individual women beneficiaries up to Rs.1 lakh per borrower (For UCBs, existing loans
to women will continue to be classified under weaker sections till their
maturity/repayment.)
(x) Minority communities as may be notified by Government of India from time to time
(xi) Persons with disabilities
AGRICULTURAL CREDIT
FARM CREDIT AGRICULTURAL

INFRASTRUCTURE ANCILLARY SERVICES
INDIVIDUALS CORPORATES
 CROP LOANS AND SHORT TERM LOANS Upto Rs 2 cr
 MEDIUM AND LONG-TERM LOANS FOR AGRIC.& ALLIED  CROP LOANS AND SHORT TERM LOANS
ACTIVITIES  MEDIUM AND LONG-TERM LOANS FOR AGRIC.& ALLIED
 PRE AND POST-HARVEST ACTIVITIES ACTIVITIES
 AGAINST PLEDGE OF AGRICULTURAL PRODUCE  PRE AND POST-HARVEST ACTIVITIES
 DISTRESSED FARMERS INDEBTED TO NON-INSTITUTIONAL Upto Rs 50 lakh/75 Lakh

LENDERS AGAINST PLEDGE OF AGRICULTURAL PRODUCE. 75 LAKH
 KISAN CREDIT CARD SCHEME AGAINST NWRS/ENWRS
 SMALL AND MARGINAL FARMERS FOR PURCHASE OF LAND FOR Upto Rs 5 cr
AGRICULTURAL PURPOSES. FPOs/FPCs WITH ASSURED MARKETING
(Subject to aggregate sanctioned limit of Rs 100 Cr per borrower from Banking System)
Construction Of Storage Facilities , Cold Storage Units/Cold Storage

Chains Designed To Store Agriculture Produce/Products
Soil Conservation And Watershed Development
Plant Tissue Culture , Agri-Biotechnology, Seed Production,

Production Of Bio-pesticides, Bio-fertilizer and Vermi Composting.
 Loans up to Rs 5 Crs to co-operative societies of farmers for disposing of the produce of
members (not for UCBs)
 Loans upto Rs 50 cr to Start-ups, as per definition of ministry, that are engaged in
Agriculture and allied activities.
 Loans for Food and Agro-processing up to an aggregate sanctioned limit of Rs100 Crs per
borrower from the banking system
 Outstanding deposits under RIDF and other eligible funds with NABARD on account of PS
shortfall.
 Loans for setting up of Agriclinics (provide expert advice and services) and Agribusiness
Centres (Commercial units by trained agricultural professionals).
 Loans to custom service units, who maintain a fleet of tractors, bulldozers , threshers etc.
 Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies (FSS)
and Large-sized Adivasi Multi-Purpose Societies (LAMPS) for on-lending to agriculture.
 Loans sanctioned by banks to MFIs for on-lending to agriculture and Loan sanctioned to
registered NBFCs (other than MFIs) for on-lending (not applicable to RRBs, UCBs, SFBs and
LABs), subject to conditions.
Definition of Startup (For the purpose of Government schemes):-
(Department for Promotion of Industry and Internal Trade (DPIIT)-For Startup India, Standup India.
An entity shall be considered as a Startup:
Upto a period of ten years from the date of incorporation/ registration, if it is incorporated
as a private limited company (as defined in the Companies Act, 2013) or registered as a
partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited
liability partnership (under the Limited Liability Partnership Act, 2008) in India.
Turnover of the entity for any of the financial years since incorporation/ registration has not
exceeded one hundred crore rupees.
Entity is working towards innovation, development or improvement of products or

processes or services, or if it is a scalable business model with a high potential of
employment generation or wealth creation.
Provided that an entity formed by splitting up or reconstruction of an existing business shall

not be considered a ‘Startup’.
DEMAND SIDE
Population And Income
Growth
Increasing Exports
Favourable Demographics
OPPORTUNITIES COMPETITIVE
Increasing Demand For Inputs Like ADVANTAGE
Hybrid Seeds And Fertilizers. Large Agriculture Population
Farm management services  Abundant Livestock
Potential global outsourcing hub
 Increased Investments By
 supply chain infrastructure and GOVT.SUPPORT Foreign Firms In India
contract farming  Growing institutional credit
 Investment Opportunities In Leading Producer Of Spices,
Agriculture, Food Infrastructure  Increasing MSP Jute, Pulses; Wheat, Paddy,
And Contract Farming.  Introduction of new schemes Fruits And Vegetables
 Approval of National Mission
on Food Processing
Companies provide
• Contract farming R&D and
implements
Stable and steady Regular and timely

supply of quality farm payment and credit
output for companies facilities to farmers
Reduces price risk

Lesser logistics cost fluctuations and
to farmers and saves land
companies investments for
companies
Mega Food Product Model

The Scheme of Mega Food Park aims at providing a mechanism to link agricultural production to
the market by bringing together farmers, processors and retailers so as to ensure maximizing value
addition, minimizing wastage, increasing farmers income and creating employment opportunities
particularly in rural sector.
Some Mega Food Parks:-
1) Srini Mega Food Park, Chittoor, Andhra Pradesh..
2) North East Mega Food Park, Nalbari, Assam.
3) Gujarat Agro Mega Food Park, Surat, Gujarat
4) Integrated Mega Food Park, Tumkur, Karnataka
5) Kerala Industrial Infrastructure Development Corporation Mega Food Park, Palakkad, Kerala.
6) Indus Mega Food Park, Khargoan, Madhya Pradesh.
7) Paithan Mega Food Park, Aurangabad, Maharashtra.
8) MITS Mega Food Park, Rayagada, Odisha.
9) International Mega Food Park, Fazilka, Punjab.
10) Greentech Mega Food park, Ajmer, Rajasthan.
11) Smart Agro Mega Food Park, Nizamabad, Telangana.
12) Patanjali Food and Herbal Park, Haridwar, Uttarakhand.
13) Jangipur Bengal Mega Food Park, Murshidabad, West Bengal.
Mega Food Product Model

During 2014-15, the Government had created PRODUCE Fund with a corpus of Rs 200 crore in NABARD for the
promotion of 2,000 FPOs in the country. Against the target of 2,000 FPOs, NABARD has sanctioned 2,154 FPOs
as on 31.10.2019.
Crop float on Water

AEROPONICS
No Water, No Soil Required. Spraying only Mist.

AQUAPONICS- Two types of crops can be grown.

Water is conserved, Productivity of land increases.
Particulars Paddy(Rainfed) Groundnut Sugarcane
Cropping Pattern 10 10 5
(Land holding(in ac):15)
Scale of finance 21000/ 15000/ 50000/
(Amount in Rs)
Assessment of Crop Loan Amount
Type of Crop Extent of Area Scale of finance Total Cost of cultivation
Paddy(Rainfed) 10 21000/ 210000/

Groundnut 10 15000/ 150000/
Sugarcane 5 50000/ 250000/
Loan Amount 610000/
APPLICATION :
 APPRAISAL- Technical, Economic , Managerial and Financial appraisal
 Margin
 Security
 Documentation
 Disbursement
 Interest application
 Repayment
 Follow up and monitoring
 KYC documents for identification. – NO dues certificates waived
 Stamp size/Passport size photographs of the borrowers in duplicate.
 Cropping pattern.
 Copies of land records regarding lands owned/leased as certified by revenue authorities.
 Latest land tax paid receipts are to be produced for verification.
 Original/certified copies of the title deeds - true and legal owner of the land and unencumbered.
 Project report / Proforma invoice / estimates -to be produced wherever applicable.
 Valuation certificate of the land from a competent authority/approved valuer
Interest subvention scheme
CROP LOANS:- Short-term crop loans upto ₹ 3 lakh to farmers at an interest rate of 7% p.a. -interest
subvention of 2% per annum to lending institutions viz. Public Sector Banks (PSBs) and Private Sector
Commercial Banks (in respect of loans given by their rural and semi-urban branches only). In August
2022, the Cabinet approved further 1.5% interest subvention on short-term farm loans up to ₹3 lakh, which will be
provided to lending institutions for the financial year 2022-23 to 2024-25.
PERIOD:- This interest subvention of 2% will be calculated on the crop loan amount from the date of its
disbursement/drawal up to the date of actual repayment of the crop loan by the farmer or up to the due date
of the loan fixed by the banks whichever is earlier, subject to a maximum period of one year.
PROMPT REPAYMENT:- To provide an additional interest subvention of 3% per annum to such of those
farmers repaying in time i.e. from the date of disbursement of the crop loan upto the actual date of
repayment by farmers or upto the due date fixed by the banks for repayment of crop loan, whichever is
earlier, subject to a maximum period of one year from the date of disbursement.
This also implies that the farmers repaying promptly as above would get short term crop loans @ 4%
per annum during the years 2018-19 onwards. This benefit would not accrue to those farmers who repay
their crop loans after one year of availing such loans.
Interest subvention scheme- continued
WAREHOUSE:- In order to discourage distress sale by farmers and to encourage them to
store their produce in warehouses, the benefit of interest subvention will be available to
small and marginal farmers having Kisan Credit Card for a further period of upto six months
post the harvest of the crop at the same rate as available to crop loan against negotiable
warehouse receipts issued on the produce stored in warehouses accredited with
Warehousing Development Regulatory Authority (WDRA).
NATURAL CALAMITIES:-To provide relief to farmers affected by natural calamities, an
interest subvention of 2% per annum will be made available to banks for the first year on the
restructured loan amount. Such restructured loans will attract normal rate of interest from the
second year onwards.
SEVERE NATURAL CALAMITIES:- However, to provide relief to the farmers affected due
to severe natural calamities, an interest subvention of 2 percent per annum will be made
available to banks for the first three years/entire period (subject to a maximum of five
years) on the restructured loan amount. Further, in all such cases, the benefit of prompt
repayment incentive @ 3% per annum shall also be provided to the affected farmers. The grant
of such benefits in cases of severe natural calamities shall, however, be decided by a High Level
Committee (HLC) based on the recommendation of Inter-Ministerial Central Team (IMCT) and Sub
Committee of National Executive Committee (SC-NEC).
Interest subvention scheme- continued
AADHAR LINKAGE:-To ensure hassle-free benefits to farmers under Interest Subvention
Scheme, banks are advised to make Aadhar linkage mandatory for availing short-term
crop loans in 2018-19 onwards.
DBT MODE:-Further, from 2018-19, the Interest Subvention Scheme is being put on DBT
mode on ‘In Kind/services’ basis and all short term crop loans processed in 2018-19 are
required to be brought on ISS portal / DBT platform. Banks are advised to capture and
submit category wise data of beneficiaries under the scheme and report the same on
ISS portal individual farmer wise once it is launched to settle the claims arising from 2018-
19 onwards
For providing adequate and timely credit support from the banks
under a single window with flexible and simplified procedure to the
farmers for their cultivation and other needs
To meet the short term credit requirements for cultivation of crops;
Post-harvest expenses;
Produce marketing loan;
Consumption requirements of farmer household;
Working capital for maintenance of farm assets and activities allied to
agriculture;
Investment credit requirement for agriculture and allied activities.
i. Farmers - individual/joint borrowers who are owner cultivators;
ii. Tenant farmers, oral lessees & share croppers;
iii. Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers
including tenant farmers, share croppers etc.
 Validity of KCC for 5 years

 One time documentation at the time of first availment and thereafter
simple declaration (about crops raised/ proposed) by farmer.
 No withdrawal in the account to remain outstanding for more than 12
months
 Credit balance in cash credit limit cum SB account to be allowed to fetch
interest at saving bank rate
 Interest subvention/incentive for prompt repayment as Govt. Norms
 Disbursement through various delivery channels, including channels like
ATM/ POS/Mobile handsets
 In case the cropping pattern adopted by the farmer is
changed in the subsequent years, the limit has to be
reworked
• Assessment of crop loan component;-

Based on the scale of finance for the crop plus insurance premium x Extent of area
cultivated+10% of the limit towards post-harvest/household/ consumption
requirements+20% of limit towards maintenance expenses of farm assets.
• Additional 10% of the limit towards cost escalation/increase in scale of

finance for every successive year (2nd, 3rd, 4th and 5th year)
• Flexi KCC with simple assessment prescribed for marginal farmers.
• For crop loans, no separate margin need to be insisted as the margin is
in-built in scale of finance.

Disbursement
CROP LOAN - Revolving cash credit facility.
No restriction in number of debits and credits
Validity/Renewal
May continue / Enhance / cancel /withdraw facility depending upon cropping
area/pattern and performance of the borrower.
Repayment Period :
Repayment as per the anticipated harvesting and marketing period of crops
Security
Hypothecation of crops upto ₹ 1.60 lakh ,
Up to ₹ 3.00 lakh( For TIE UP Accounts)
Above Rs 1.60 lakh/ Rs 3 lakhs , mortgage of the property
RATE OF INTEREST AND REPAYMENT SCHEDULES ARE DIFFERENT FOR CROP LOAN AND TERM
LOANS- (Crop loans are eligible for interest subvention )
KCC LIMIT
CASH CREDIT ACCOUNT/LIMIT TERM LOAN LIMIT
(Bifurcate for operational and accounting convenience)
 Drawing limit for short term cash credit based on the cropping pattern.
 The amount(s) for crop production, repair and maintenance of farm assets and consumption
may be allowed to be drawn as per the convenience of the farmer.
 In case the revision of scale of finance for any year exceeds the notional hike of 10%- a
revised drawable limit may be fixed in consultation with the farmer.
In case such revisions require the card limit itself to be enhanced (4th or 5th year), the same
may be done and the farmer be so advised.
For term loans, instalments may be allowed to be withdrawn based on the nature of
investment and repayment schedule as per the economic life of the proposed investments.
Land Holding : 2 acres

Cropping Pattern :
Paddy - 2 acres (Scale of finance per acre ₹.20,000)
Insurance premium @ 2% Rs 400
Groundnut - 2 acres (Scale of finance per acre ₹. 15000)
Insurance premium @1.5% Rs 225
Investment / Allied Activities : Establishment 1+1 Dairy Unit in 1st Year
(Unit cost : ₹.50,000 per animal)
FIX year wise KCC LIMIT ?

FIRST YEAR : CROP LOAN

CROP LAND AREA SCALE OF CROP AMOUNT/ ACRE TOTAL AMOUNT
FINANCE INSURANCE
PADDY 2 20000 400 20400 40800
GROUND NUT 2 15000 225 15225 30450
TOTAL =71250
CROP LOAN AMOUNT = 71,250
ADD 10% towards post-harvest / household expense = 7,125
ADD 20% towards farm maintenance = 14,250
1ST YEAR CROP LOAN LIMIT = 92,625
2ND YEAR ( 110% of 92625 ) =1,01,888
3RD YEAR ( 110% of 102102) =1,12,076
4TH YEAR ( 110% of 112312) = 1,23,284
5TH YEAR (110% of 123543) = 1,35,612
KCC CROP LOAN LIMIT Rs 1,36,000
Dairy unit term loan Rs 1,00,000
KCC CARD MAXIMUM LIMIT Rs 2,36,000
YEA CROP LOAN LIMIT CONSUMPT FARM TOTAL DAIRY UNIT KCC LIMIT
R ION ASSETS CROP LOAN
MAINTENA LIMIT
NCE
1 192625
40800 100000
30450 7125 14250 92625
2 80000 181888
44880 33495 7838 15675 101888

3 60000 172076
49368 36845 8621 17243 112076

4 40000 163284
54305 40529 9483 18967 123284

5 20000 155612
59735 44582 10432 20863 135612

Availability, Sufficiency of water, water level (summer) & quality of water

Norms for groundwater structure through institutional finance and spacing of
wells
Pump house, Power supply for electric pump sets etc.
Minimum acreage/benefitting area and sale of water
Selection of pump sets/BIS, HP of engine,
Water Lifting Permission for financing pump sets for lifting water
from river/ canal
(Classification of Safe, semi-critical, critical and over-exploited areas based on
ground water extraction)
Minor Irrigation- New Criteria

Classification Average Stage of Ground Norms for groundwater
Of units(Block Water Extraaction structure through
etc) institutional finance
Where ground water extraction exceeds
Over- the annually replenishable ground water
Not permitted
Exploited recharge
Where the stage of ground water

Critical extraction is between 90-100 %.
Permitted on selective
basis
Where the stage of ground water
Semi-Critical extraction is between 70% and 90%
Where the stage of Ground water

Safe extraction is less than 70 %.
Permitted without any
area/block restriction
Quantum of loan: HP & make

Minimum acreage of land holding
Minimum use on the own farm & custom services
 Minimum number implements to be purchased/owned
Density of machine/implement in the area
Availability of after sales service facilities
Registration of tractor/power tiller with the Regional Transport Authority (RTA) and the
hypothecation charges of the bank
Commercial Test Reports (CTRs)/Minimum Performance Standards (MPS).

 Advisable to have 2 or more batches for regular income generation

according to lactation days
 Inter calving period: 400 days (270 lactation days+130-150 dry days) -for
cow 305 and 60 days
 Only Good quality animals are to be financed
 Availability of accommodation for housing animals
 Animal should be preferably purchased in first or second lactation
 Ensure availability of veterinary aid, green/dry fodder and concentrate
feed
 Ensure healthy environment for animals
 Ensure good marketing arrangements
 Animals should be adequately insured
Birds-Chicken, duck, turkey etc.

Layer (eggs) and broiler (meat)
Broiler(chicken) life cycle is 40 to 45 days
 Livestock and Unit should be insured
Ensure supply of quality birds
Availability of veterinary aid, ensure regular vaccination
Arrangements of marketing
TECHNICAL PARAMETERS FOR POULTRY

 Land and land development (Location, area, suitability, proximity to road, site map etc.)
 Proposed capacity / farm size
 Civil structures (sheds, feed mixing unit, egg room, godown / store room, office quarters, staff
room etc.)
 Equipments, Plant & Machinery – (Feeder, waterer, cages, feed grinder & mixer, Deep freezer,
vaccinator, debeaker etc.)
 Housing (capacity, Type- Deep litter / Cage, Area required, system of housing (1+2, 1+3, 1+1+2
etc.)
 Chicks – (Strain, number of birds / batch strength, source of chicks, vaccination of chicks etc.)
 Feeding (Feed requirement, source of feed, type of feed – chick, grower and layer mash, price
of feed etc.)
 Availability of utilities – Water, power & fuel
 Veterinary aid and transportation arrangements
 Production parameters (Egg production, Feed efficiency - FCR, Mortality etc.)
 Flock projection chart
 Marketing (Marketing of eggs / culled birds and other products / by-products – place of
marketing, basis of payment (kg or no.), price per unit etc.)
ACTVITIES : For digging/deepening of wells,
 construction of tanks/ponds , bunding, land
reclamation, levelling of land, terracing,, fencing,
construction of farm sheds ,buildings/structures ,
 Farm House Loans (to include storage
room/godowns/sheds for livestock and farm machinery
Eligibility . The farmer should have minimum 2 acres.
Digging/deepening of wells, :
The feasibility certificate from the Ground Water
Directorate
 For establishment of estates / orchards
 Clearing of jungle, leveling of land,
 Conversion of barren land into cultivable land,
 Minor irrigation, fencing,
 Construction of labour lines, farm house,
 Purchase of planting material, maintenance cost till bearing and other inputs,
rejuvenation/replanting.
 Should own economic land holding depending upon the type of crop proposed.
 Should have experience/knowledge in the proposed activity.
 Technical advice on various aspects should be available from an extension
agency
 Wherever commodity boards are constituted for the development/marketing of
such crops, registration with such boards to be insisted.
 The applicant should be free from statutory dues.
 Inter crop/Mixed cropping

 Green/poly house farming
 Selection of crops-artificial climatic conditions
 Crops should be adequately insured
 Techno economic viability of projects
Some Developments
a) RCEP (Regional Comprehensive Economic Partnership)- Guarded Approach- Possible largest trade block
of 16 countries.
b) Kisan Pathshala for doubling Farmers’ Income- Since 2017- Agricultural Knowledge- UP Government
Initiative – MFS (Million Farmers’ School)- Daily 2 to 3 hours session in the evening in primary school
building in a village for a module of 3 to 5 days. it is aimed at reaching out to a million farmers every
time.
c) Better Agriculture Data to help tackle climate change challenges.
d) In Recently announced reforms it is proposed to establish facilities in PPP mode to use irradiation
technology for food preservation – to compliment agricultural reforms and assist farmers.
Food irradiation (the application of ionizing radiation to food) is a technology that improves the safety
and extends the shelf life of foods by reducing or eliminating microorganisms and insects.
e) IFFCO introduces world’s first Nano Urea Liquid- According to IFFCO, the Nano Urea Liquid is easy on the
pocket of farmers and will be effective in increasing farmers' income. It stated that a 500 ml bottle of the
liquid will replace at least one bag of conventional Urea
f) BBC Programme- Follow the Food https://www.bbc.co.uk/future/bespoke/follow-the-food/
g) DD Kisan Channel- https://prasarbharati.gov.in/dd-kisan-homepage/
h) Operation Green and Food Processing Budget of Rs 500 crore
i) Kisan Drons
H S Sharma, Guest Faculty, IIBF

parasharhss@yahoo.com
7506640131

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INDIAN INSTITUTE OF BANKING & FINANCE

INDIAN INSTITUTE OF BANKING & FINANCE

Important Branches of Agriculture:-

Agronomy:-Study of crops and the soils in which they grow.

Other Branches of Agriculture?

Can you name some other branches of agriculture,

Other Branches of Agriculture? 1/2

Some Branches of Agriculture 2/2

Landmark Agricultural Exports Achieved in FY 2022

INDIA IS NUMBER 2 IN PRODUCTION OF

Agriculture Gross Value Added (GVA)

Agricultural Resource Wise Position of India

Gross Value Added by agriculture and Allied

Agriculture and allied sector’s GVA at constant

As per Union Budget 2022-23, allocation of Rs 1.24

Food-grain Production and Horticulture Production

 Marine Products, Buffalo Meat and rice are

 Other major export items are spices, cotton, oil

 Marine product exports reached US$ 7.39

 An agreement to export fish meal and fish oil

Challenges for Indian Agriculture

Scope for Reforms

Doubling Farmers’ Income - Strategies

Doubling Farmers’ Income - Strategies

Doubling Farmers’ Income - Strategies

16-Point Action Plan to Revive Agricultural sector BUDGET 2020

16-Point Action Plan to Revive Agricultural sector BUDGET 2020

16-Point Action Plan to Revive Agricultural sector BUDGET 2020

16-Point Action Plan to Revive Agricultural sector

Government Initiatives May-June 2020 in view of

Government Initiatives May-June 2020 in view of

4. From ‘TOP’ to TOTAL: Ministry of Food Processing Industries (MoFPI) has on

Government Initiatives May-June 2020 in view of impact of

Union Budget 22-23 (Proposals)

Union Budget 22-23 (Proposals)

5. Endorsements for Natural Farming:-The Government will promote chemical-free

Union Budget 22-23 (Proposals)

Flow of Credit to Agriculture

Advances to Weaker 12 % ** (In phased manner by 23-24:- 10, 11, 11.5, 12 %)

FARM CREDIT AGRICULTURAL

 DISTRESSED FARMERS INDEBTED TO NON-INSTITUTIONAL Upto Rs 50 lakh/75 Lakh

Construction Of Storage Facilities , Cold Storage Units/Cold Storage

Soil Conservation And Watershed Development

Plant Tissue Culture , Agri-Biotechnology, Seed Production,

Entity is working towards innovation, development or improvement of products or

Provided that an entity formed by splitting up or reconstruction of an existing business shall

Stable and steady Regular and timely

Reduces price risk

Mega Food Product Model

Mega Food Product Model

Crop float on Water

No Water, No Soil Required. Spraying only Mist.

AQUAPONICS- Two types of crops can be grown.

Paddy(Rainfed) 10 21000/ 210000/

i. Farmers - individual/joint borrowers who are owner cultivators;

ii. Tenant farmers, oral lessees & share croppers;

 Validity of KCC for 5 years

• Assessment of crop loan component;-

• Additional 10% of the limit towards cost escalation/increase in scale of

INDIAN INSTITUTE OF BANKING & FINANCE

Land Holding : 2 acres

FIX year wise KCC LIMIT ?

FIRST YEAR : CROP LOAN

44880 33495 7838 15675 101888