The term agricultural financial management refers to the acquisition and use of financial resources in the individual farm, together with the protection of equity. The term capital refers to the equity or assets of an individual or company. The term condition also denotes the borrower's financial condition, which is directly relevant to the venture capital.
However, for all practical purposes, it can be estimated using the principle of equality and increasing risk. Knowledge of the owner's equity or of the borrower's net worth is helpful in assessing the security of loans and the risk associated with lending. The “balance sheet,” also referred to as “equity value or financial statement,” is a summary of a company's assets and liabilities, along with the statement of owner's equity or net worth.
5 The balance sheet does not indicate the progress or deterioration of the farm business, unless deducted overtime and net worth are compared.
2 Denotes the three essential components, namely (a) assets (b) liabilities and (c) net worth or equity, an offsetting entry in an account. 3 Includes items owned or obligated and does not provide an accurate measurement of total controlled assets, as many assets used in production may be leased. 4 The balance sheet can be prepared for the "farm" or for the "operator's family farm" (includes business and personal items).
6 The balance sheet can be constructed on the basis of cost/book value (purchase price or original cost less depreciation) or on the basis of current market value. 7 Sometimes physical data is also provided to look at changes in inventory value (amount of grain or size and number of cattle), changes in unit prices, or changes in both inventory and prices.
Medium-term Liabilities
Net worth
Net worth in a year will vary due to farm profits, paid-in capital, capital gains or losses, etc. However, an equal increase and decrease in assets, equal increase in assets and liabilities, equal decrease in assets and liabilities and an equal increase and stagnation in liabilities will obviously affect the structure of the balance sheet, but the net worth will remain unchanged. Also, the net worth would be reduced by diverting part of the loan for consumption purposes.
In fact, loan payments are transactions that lead to an equal reduction in assets and liabilities, leaving the net worth unchanged. If the long-term borrowings were used to pay off the short-term borrowings, this would result in the same increase and consequent decrease in liabilities, but the net worth would not be affected as the debt was restructured to improve the liquidity position. The analysis of the financial indicator can also be done on the basis of balance sheet data that monitor the financial structure of the agricultural company or farm manager.
This ratio reflects whether or not the money obtained in this period would be sufficient to cover the obligations of the same period. The lower the value of this ratio, the higher the liquidity position of the farm. iv) Acid Test Ratio or Quick Ratio. A net capital ratio of more than one indicates that farm liquidation would generate enough cash to repay total debt. iii) Equity to Assets Ratio = the equity or equity value of the farmer's assets.
In addition, an income statement can be drawn up for an agricultural company or for an agricultural operator. If inventories are greater at the end of the year than at the beginning of the year, the addition to farm income would be positive. This can also be taken into account when we draw up the income statement of an agricultural operator.
Cash Receipts
However, non-farm income may also be included in the income statement if prepared for a farm operator. Normally, three income level figures, ie, net cash income, net farm income and returns to management, should be considered while preparing the income statement. Cash farm operating expenses represent those cash expenses associated with the operation of a farm.
Fixed cash expenses represent the outlays that are incurred even in the absence of production, e.g. land revenue, interest on medium and long-term loans, etc. These total farm cash expenses are subtracted from the total farm cash revenue to get the net farm cash income. In fact, the annual net change in crop and livestock stocks, fertilizers and other supplies must be taken into account if we are interested in measuring the exact profit.
Conversely, if inventories decreased during the year, income would be reduced while non-cash adjustments were made to the income statement. Similarly, changes in the value of crop and livestock holdings as a result of the price changes should also be reflected when adjusting for income. The changes between beginning and ending liabilities, such as debt and interest payments, can also be considered when preparing an income statement.
Non-agricultural income represents the net cash income of the farmer and his family from non-agricultural investments and occupations. Similarly, the value of the agricultural produce consumed by the farmer and his family should be included in the measurement of net farm income. By subtracting the imputed value of family labor and interest on the investment (or working capital) from net farm income, one can obtain the returns for farm management (Table 5).
Cash Expenses
ASSISTANCE TO RURAL WOMEN IN NON-FARM DEVELOPMENT (ARWIND)
This scheme aims to encourage loans to rural women, preferably organized in groups and supported by Voluntary Associations (VAs)/Non-Governmental Organizations (NGOs), Women Development Corporations, Khadi Village and Industries Commission (KVIC)/Khadi and Village Industries Board (KVIB), Cooperative Societies, Trusts, etc. NABARD considers need-based grant assistance subject to availability of promotional funds to meet the sponsoring agency's expenses for organizing groups, sensitization, training and other related expenses. In case the sponsoring agency provides services like supply of raw materials, quality control, marketing, etc., such services undertaken by it are also eligible for financial assistance under NABARD's credit linked promotional schemes viz. Mother Units/Community Service Centres.
ASSISTANCE FOR MARKETING OF NON-FARM PRODUCTS OF RURAL WOMEN (MAHIMA):-
It is provided that women groups organized or sponsored by an appropriate agency may avail bank loan normally not exceeding Rs.50,000/- per woman member for an individual activity or a group activity at 100%. NABARD's microfinance initiatives through the SHG-bank linkage program have gone through various phases, eg integration and expansion of pilot testing (1998 onwards) and has taken the form of a microfinance movement in the country. The program has begun to penetrate into the resource-poor regions of the country. i) SAs, NGOs and other Self Help Promoting Institutions (SHPI) including some banks that play the role of facilitator. ii) SHGs should be in existence for at least six months actively promoting savings and lending among their members. iii) SHGs are usually informal groups. v) Banks will finance SHGs in relation to the savings mobilized by the group.
Development through Credit" (WDCs) which inculcate repayment ethics and promote people's participation in the development process. Assistance is available on selective basis for starting clubs for rural women, farmers, artisans etc., at the rate of Rs.3000/- per club per annum towards maintenance expenses of the designated service area bank for three years.Clubs are formed to build mutually beneficial relationships between banks and women borrowers, farmers etc. in the village covered by the clubs.
If such clubs are run in partnership with VAs/NGOs, the VAs/NGOs are entitled to an additional administrative subsidy of Rs.2000/- per club per year for a period of three years. NABARD also extends maintenance fees at a rate of Rs.3000/- per annum for three years to the clubs maintained by VAs/NGOs. Various training programs have been designed for the benefit of rural women in the club areas, including on-farm/non-farm training, service activities, income generating activities, women's development programs, etc., with the assistance of designated banks, VAs/NGOs.
The objective is to provide promotional assistance to SCBs/DCCBs/SCARDBs and RRBs for setting up "Women's Development Cells" to give focused attention to the economic empowerment of rural women by improving and increasing the flow of credit to them through "banking of relations" and formulation. of its appropriate operational strategies. NABARD's assistance is in the form of "grant" to cover 50% of the salary which includes the salary and allowances of the designated lady officer(s) plus additional expenses not exceeding 10% for support staff/or general expenses and transport charges of key personnel up to Rs. 0.5000/- subject to a maximum of 1, lakh per cell per annum. These are: (i) The WDC lady officer will identify the possible areas for the development of women whether individual or group (ii) Assist the bank in preparing the Action Plan for financing women borrowers (iii) The Action Plan should be in line with the Sub-Plan for Women/gender planning for the district (iv) Identify agencies (NGOs, VA, etc) for working network for providing credit to women through banking schemes, (v) Assist rural women in availing assistance of loan from the bank (vi) Resolve issues related to credit and other support services for women and initiate the process of better gender awareness among banks and communities (vii) Modify internal policies for credit growth, (viii) Strengthening the database for gender disaggregated figures for planning (ix) To initiate innovative schemes for women development and help increase the flow of credit to women (x) Acting as a nodal officer between the bank and women customers or agencies dealing with women, (xi) Act as a resource person for specific issues of women/women, (xii) Suggest measures for their general welfare and coordinate other agencies in the field.
