DOMAIN - IV: CREDIT, COOPERATION & MARKETING
12. IMPROVING ACCESS OF FARMERS TO INSTITUTIONAL CREDIT FOR BOTH SHORT-TERM AND LONG TERM CAPITAL
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12. IMPROVING ACCESS OF FARMERS TO INSTITUTIONAL
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Credit Card for a further period of up to six months (post- harvest) on the same rate as available to crop loan against negotiable warehouse receipts
12.2.5 In order to ensure that all eligible farmers are provided with hassle-free and timely credit for their agricultural operations, the Government has introduced the Kisan Credit Card Scheme, which enables them to purchase agricultural inputs such as seeds, fertilizers, pesticides, etc. and draw cash to satisfy their consumption needs.
12.2.6 The KCC Scheme has since been simplified and converted into ATM enabled debit card with, inter alia, facilities of one-time documentation, built-in cost escalation in the limit, any number of drawl within the limit, etc., which eliminates the need for disbursement through camps and mitigates the vulnerability of farmers to middlemen.
12.2.7 To bring small, marginal, tenant farmers, oral lessees, etc. into the fold of institutional credit, Joint Liability Groups (JLGs) have been promoted by banks. To improve the outreach among the poor and the informal sector, the SHG-Bank linkage programme was intensified.
12.2.8 Kisan Credit Card (KCC)
12.2.8.1 The Kisan Credit Card Scheme is in operation throughout the country and is implemented by Commercial Banks, Cooperative Banks and Regional Rural Banks. The scheme has facilitated in augmenting credit flow for agricultural activities.
The scope of the KCC has been broad-based to include term credit and consumption needs. The KCC Scheme has since been simplified and converted into ATM enabled debit card with, inter-alia, facilities of one-time documentation, built-in cost escalation in the limit, any number of drawl within the limit etc. which eliminates the need for disbursement through camps and mitigates the vulnerability of farmers to middlemen.
12.2.9 Revival Package for Short Term Cooperative Credit Structure (STCCS) 12.2.9.1 The Government implemented a package for revival of Short-term Rural Cooperative Credit Structure in the country. The Revival Package was aimed at reviving/strengthening the Short-term Rural Cooperative Credit Structure (STCCS) and makes it a well-managed and vibrant medium to serve the credit needs of rural India, especially the small and marginal farmers. It sought to: (a) provide financial assistance to bring the system to an acceptable level of health; (b) introduce legal and institutional reforms necessary for their democratic, self-reliant and efficient functioning; and (c) take measures to improve the quality of management.
12.2.9.2 States choosing to participate in the Revival Package were entitled for financial assistance under the package through the mechanism of a formal MOU or
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Exchange of Letters with the Central Government and NABARD to implement (in a phased manner & within a period of 3 Years), the legal and institutional reforms envisaged. Financial assistance for STCCS under the package was estimated at Rs.13596 crore to make available for cleansing of Balance Sheet and increasing the capital to a specified minimum level. In order to ensure that the CCS continued on sound financial, managerial and governance norms, technical assistance was also to be provided to upgrade institutional and human resources of the CCS, computerization and building up proper internal control and accounting system. The Package sought to bring down the interference of the State Govts in the credit cooperatives and suitable amendments to the State Cooperative Societies Act and Banking Regulation Act were proposed in the package. These formed part of the important conditionalities to be complied with under the Package.
12.2.10.3 Twenty-five State Governments, viz. Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Haryana, J&K, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Rajasthan, Odisha, Punjab, Sikkim, Tamil Nadu, Tripura, Uttarakhand, Uttar Pradesh, and West Bengal have signed the Memorandum of Understanding (MoU) with GoI and NABARD for implementation of the package. This covered more than 96% of the STCCS units in the country. An amount of 9245.28 crore was released by NABARD as GoI share for recapitalisation of 52,902 eligible PACS in seventeen States, 1510 ineligible PACS affiliated to 30 CCBs in three States and 13 CCBs in Odisha, while the State Governments concerned released 855.53 crore as their respective share. As per MoU, the period of implementation was for three years from the date of signing MoU which was extended till 30.06.2011 for all the States. The package was closed on 30.06.2011.
12.10 Joint Liability Group (JLG)
12.10.1 Joint Liability Group is an informal group comprising 4 to 10 individuals coming together for the purpose of availing bank loan on individual basis or through group mechanism against mutual guarantee. The JLG mode of financing serves as collateral substitute for loans to be provided to the target group i.e. small, marginal, tenant farmers, oral lessees, share croppers, etc. It builds mutual trust and confidence between the bank and the target group and minimizes the risks in the loan portfolio for the banks through group dynamics, cluster approach, peer education and credit discipline. The objective of the JLG mode of financing is to provide food security to vulnerable section by enhanced agriculture production, productivity and livelihood promotion. JLGs can also easily serve as a conduit for technology transfer, facilitating common access to market information, training and technology dissemination in activities like soil testing, training and assessing input requirements, etc.
12.10.2 The Scheme for financing of Joint Liability Groups of Tenant Farmers was started by NABARD in 2007-08. The scheme was extended to non-farm sector from 2009 onwards. Thus, JLGs consists of those of farmers and also of non
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farmers. The exclusive scheme for Bhoomi Heen Kisan was launched by Government of India during the Union Budget Announcements - 2014-15 with a target for financing 5 lakh Joint Farming Groups of “Bhoomi Heen Kisan” through NABARD. The total number of JLGs and total loan amount provided (cumulative) as on 31.12.2015 are as under:
Number of JLGs financed as on 30.12.2015
No. Amount
14.11 lakh Rs.13968.76 crore
12.10.3 Total number of Joint Farming Groups of “Bhoomi Heen Kisan”
promoted and loan amount disbursed during 2014-15 and 2015-16:
Number of JLGs promoted and financed
2014-15 2015-16 (up to December, 2015)
No. Loan Amount (Rs. Lakh) No. Loan Amount (Rs. Lakh)
456,636 441443.81 282,126 277860.00
(The figures for the years 2014-15 and 2015-16 are parts of the cumulative figures in the first table.)
12.3 Critical issues
12.3.1 There are no critical issues
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13. ISSUES RELATED TO PROCUREMENT OF PULSES AND