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According to Ramesh Golait (Reserve Bank of India Occasional Papers, summer 2007) the credit delivery to the agriculture sector in India was analyzed. The evolution of institutional credit to agriculture sector is broadly divided into four phases:1. 1904-1969- Predominance of co-operative and setting up of Reserve Bank of India (RBI)2. 1969-1975- Nationalization of Commercial banks and setting up of Regional Rural Banks (RRBs)3. 1975-1990- Setting up of National Bank for Agriculture and Rural Development (NABARD)4. 1991 onwards- Financial sector reforms.
The demand of the agricultural credit depends on the farm size, and other factors of production like labor required, fertilizers and other inputs required in production. In India supply of agriculture credit to farming sector is managed by co-operative banks, scheduled commercial banks and regional rural banks. Some of the major visible trends and progress in the credit to agriculture sector are as follows:1. After nationalization of banks, the public-sector bank made notable progress and established a wide banking network.
There was seen a great increase in number of public sector banks from 8,262 in June 1969 to 68,355 by March 2005.2. Co-operative banks and their widespread networks lost their commanding position since 1990s. The share of co-operative banks which was 62 per cent during 1992-93 was decreased to 22 percent in 2005-06.3. There was growth in institutional credit to agriculture by 21 percent during 1995-96 to 2004-05 which was just 12 per cent during 1986-87 to 1995-95.The distribution of institutional agriculture credit varies per hectare of gross cropped areas in different state. As the agricultural development is higher in Southern part of India, it was seen that the institutional credit is also higher in southern region (Rao, 1994).
Less availability of credit resulted in less productivity in the other states of the country and also affected the adoption of modern technology and private capital investment in agriculture sector. Farmers had to borrow from non-institutional sources to meet the production cost, but the rate of interest where often high. This severely affected the small and marginal farmers and increased the rate of farmer suicides. In the speech given by the Finance Minister in Union Budget 1995-96 states that, Inadequacy of public investment in agriculture is today a matter of general concern. This is an area which is the responsibility of states. But many states have neglected investment in infrastructure for agriculture. There are many rural infrastructure projects which have been started but are lying incomplete for want of resources. They represent a major loss of potential income and employment to rural population.There were many policies developed to resolve the issues in agricultural sector. Rural Infrastructure Development Fund (RIDF) was set up in NABARD, which enabled utilization of loan by Panchayat Raj Institutions (PRI), Self Help Groups (SHGs), Non-Government Organizations (NGOs), etc., since 1999-2000. Policies like micro-finance, Kisan Credit Card Scheme (KCCS) which were effective mode of credit delivery to agriculture sector and till the end of March 2006, 59.09 million KCCS were issued.Indebtedness was seen as the major reason of farmer suicides. Observing the increasing of suicides by the farmer in the country, several policies initiative were undertaken by the Reserve Bank of India. Numerous measures were taken and also banks were advised in particular, like:1. To increase the agricultural credit flow by 30 per cent per year.2. Restructuring the outstanding debts of the farmers with the standards issued by RBI/NABARD as follows: Farmers in distress- In the districts declared as calamity rescheduling of the outstanding loan of the farmers. The rescheduled loans shall be repayable over the period of five years, at the current interest rate including an initial moratorium of two years. Farmers in debt- Ineligibility for new credit due to earlier debt shall be rescheduled as per the guidelines. This can make additional credits available for the farmers.3. All the private sector banks were advised to reduce their lending rate for agriculture sector to a single digit rate and not more than 9 per cent per annum on crop loans to the upper limit of Rs 50,000 as this will benefit almost all of the small and marginal farmers.4. To waive off security requirements for agricultural loans up to Rs 50,000 and agri-business and agro-clinics up to Rs 5 lacs. Special Rehabilitation Package for the Districts Severely Affected by Farmers’ Suicide was launched by Government of India to mitigate the distress of the farmers. This package aimed at creating sustainable and viable farming and livelihood support system reducing debt of farmers, improving supply of credit, irrigation facilities, improved extension, farming support services and marketing facilities, watershed management and income opportunity through horticulture, livestock, dairy and fisheries in 31 districts in the state of Maharashtra, Andhra Pradesh, Karnataka, and Kerala. Despite development of many policies and strategies, Indian agriculture still suffers from many problems like low productivity, low water levels, unavailable or expensive credit for farmers, lack of infrastructure and technology transfer, inadequate marketing facilities. There is need of enhancing productivity and the production of Indian agriculture by ensuring credit flow especially to small and marginal farmers.Alon Tal, 2016, Rethinking the sustainability of Israel’s irrigation practices in the drylands. Israel has been largely successful in combating desertification. The country is comprised almost entirely around 93 per cent of drylands (United Nations Environmental Management Group, 2011). The development in agricultural productivity has been part of the country’s land management policies. The two innovations of wide utilization of drip irrigation technologies and marginal irrigation water resources (Recycled waste water) have been hailed as successful and extraordinary development. In drip irrigation, small amounts of water and fertilizers is delivered straight to the root area of plants and trees in constant flow. It can prevent various diseases by reducing water contact with stem leaves and fruits and also prevents weed growth by keeping field rows dry. It also reduces the release of nutrients and chemicals below the root area of plants. As it depends on computerized operation it also reduces the labor requirement. This innovation should be the central component in any agricultural production strategy as it has agronomic and environmental advantages.Dr. S V Murugesan and Dr. M Rajarajan (2016) studied the problems and prospects of agricultural marketing in India. According to their study marketing system for agricultural produce is not regulated and organized. Farmers have limited access to market and the market channel is long with many middlemen’s taking away majority of the profit. The farmers have to strive to get even the minimum price for their produce. Farmers often take loans from private money lenders with high interest rates to meet the production cost of the next cultivating season. Small farmers are not provided even with basic infrastructure and working capital. They are also not educated about the price fluctuations in agriculture produce. In the market channel the producer is often subjected to innumerable levies and charges and also exploited by malpractice is weighing, handling and transporting. Political intrusion in the management decision making is also one of the major problem in supply chain of the country. The managing directors or the authorities in charge of the development of agriculture market in the country are often not highly qualified with professional skills in marketing and finance which results increase in intermediaries in the market channel.Dr. Neha Tomar, (2013) studied the rising food inflation and the agriculture produce market committee act which was enacted in 2003. This act was developed to make provisions for farmers and enable direct sale of agriculture produce to consumers. The sole purpose of regulation and development of agriculture markets was to protect farmers from exploitation of intermediaries and ensure fair price and timely payment for their produce. Under the APMC act only State governments are permitted to set up markets and this intercepts the private sector investment. In APMC act the state government collects market fees from the traders on the sale of notified agricultural produce and also the entry tax which is often high. Malpractices in weighing and measurements and also presence of many brokers and commission agents are the barriers that has prevented development of infrastructure in these markets. There are multiple tax regimes and multiple licensing systems which is creating unviability of uniformity in market fee across states. The post-harvest loss is high due to lack of advanced transport facilities to deliver from farm to market place. Due to lack of organization and standard marketing strategies in this act the intermediaries are the one who are most benefited and the farmers often strive to get even the minimum cost for their produce. 4. Discussion:This review of literature examined the main issues of the small holder farmers and the reason behind the increase in suicide rate of farmers in the drought prone Marathwada region of Maharashtra state. It thoroughly examined the impact of physical factors like climate change, uneven rainfall and human factors like overexploitation of natural reservoirs of water and soil destruction overall leading to crop failure.Land use and cropping patterns and agriculture produce:(P. S. Bansode and S. S. Nimbalkar. June, 2013) The Land use pattern in Marathwada region is described in the table 2 below. It indicates the Total land holding, Uncultivated land, net cultivated land, irrigated areas, rain fed areas Table 2: Land use patterns Particulars Area (ha) Percentage1 Total land holdings 0.75 100.002 Uncultivated land 0.04 5.343 Net cultivated land 0.71 94.664 Irrigated area 0.21 28.005 Rain fed area 0.50 66.66Source: and livestock pattern is the most vital factor in deciding the economic status of Marathwada region. Cropping patterns is mostly decided by the farmers need and consumption. Around 28% area of the average marginal farm holding (0.75 ha) is irrigated. Out of large number of crops grown on marginal land, 29.63 per cent area is covered by cereal and pulses, 25.92% by cash crops, 10.19 per cent by horticulture crops, 4.63 per cent by oilseeds. Wheat is the one of the major and profitable crop grown followed by rain fed crops like cotton and soya bean. As the agriculture depends ton water facilities, water scarcity is the main reason of failure of crops. The major part (43 per cent) of the land in non-irrigated followed by 32 per cent of land which is semi irrigated. Man-made events like high use of chemical fertilizers, genetically modified seed destructed land biodiversity and increased the cost of crop cultivation leading to loss of yield on large scale leaving the small farmers in debt.As the crop failure is increasing reducing the income source of farmers leaving them in debt, this has led to alarming increasing in the rate of farmer suicides. Failure of agricultural income and persistent draught are the main issues of small holder farmers. Even the other source of income through the non-farm activities cannot sustain livelihoods due to lack of infrastructure, education and assistance. This shows that there no other alternative and guarantee of steady income for the small farmers if there are no mitigation strategies developed to solve the agricultural issues.
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