Agricultural Financing Theme Special – Feb to Mar 2013

By LEAD Research Team

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If one were to look at the CMF Publications list, especially the factsheets, one would find a factsheet pertaining to the topic mentioned above. We at CMF will be focusing on this topic: Agricultural Financing exclusively over the next two months as a central theme.
So what would be a good way to know about the history or background of agricultural financing or credit – I suggest reading this document by Rakesh Mohan at the RBI – “Agricultural Credit in India: Status, Issues and Future Agenda” Though not exactly a recent publication, it is interesting to note that the concept or origins of agricultural credit in India date back to colonial times and in fact proposals regarding a formal credit system in the rural scene of India were being submitted by Sir Malcolm Darling even before the RBI was founded.
 

 

The apparent difficulties of the co-operative movement in India included the high risks that came along with agriculture, high interest rates that were the norm, over-dependence on monsoons. Exploitation and misery with respect to Indian farmers was pretty much commonplace. How the scene of agricultural credit changed from reliance on money-lenders to dependence on co-operatives is well depicted in the above link.

“Though the outreach and the amount of agricultural credit have increased over the years, several weaknesses have crept in which have affected the viability and sustainability of these institutions. Furthermore, antiquated legal framework and the outdated tenancy laws have hampered flow of credit and development of strong and efficient agricultural credit institutions.” – This paragraph from the document is a concern that remains till date. Much of the future rests in the hands of partnership between public and private entities and this also depends on policy advocacy to a large extent.

During the months of Feb-Mar, we shall attempt to cover the vast arenas within this great topic of Agricultural Financing. From blogs on research papers and ongoing studies to video clips and documentaries on various subjects under this theme, we are looking forward to hearing more from all our readers as well as our Research Associates on the field. Please do keep an eye on this space.