Extension and Credit in Horticulture by

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Extension and Credit in Horticultureby

• Prof. M.R. Sharma
• CHIEF CONSULTANT
• NATIONAL HORTICULTURE MISSION
• Krishi Bhawan
• New Delhi

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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.

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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
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• 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.

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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.4494.44crores.

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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.

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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

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Ground level credit flow

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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

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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)

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(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.
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(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.
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vii Preparation of banking plan for
financing DG sets to Gherkin farmers in Karnataka
with TFO 1.71croreviii Area Development
project for grapes in Maharashtra with TFO-
402crore.ix Risk sharing with banks Co-
financing
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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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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Thank you