Farmer's Club Programme Overview
Agriculture is the backbone of the Indian Economy as nearly 60% of the population of the country depends on agriculture and it contributes 18% to the GDP. Tenth Five Year Plan and National Agriculture Policy documents envisage a growth level of 4% in Agriculture as against the average growth of less than 2% in the last 50 years. The last decade commencing from 1990s was marked by post-Green Revolution fatigue and plateauing yield levels in many parts of the country. For sustained 4% growth in agriculture there is need to improve productivity and cut down on costs by improving efficiency.
There is, therefore, an urgent need to provide package of initiatives for transfer of technology, improving input use efficiency, promoting investments in agriculture both in private and in public sectors and creating a favourable and enabling economic environment. The emerging needs in agriculture sector now are adoption of location specific skill and knowledge based technologies, promote greater value addition to agriculture produce, forge new partnerships between public institutions, technology users and the corporate sector, harness IT more effectively to realise financial sustainability and compete in the international market.
For transmitting the latest agriculture techniques to the Farmers’ field, orienting them to establish better relationship with banks, adoption of latest post-harvest handling technology, value addition, etc. and enjoy the benefits of collective bargaining power both for procuring inputs and select their produce the Farmers’ Club Programme is an appropriate and most suitable strategy initiated by NABARD in late 1982.
Development in rural areas through credit, technology transfer, awareness and capacity building.
What is Farmers' Club Programme
National Bank for Agriculture and Rural Development (NABARD) encourages banks to promote Farmers' Clubs in rural areas under the Farmers’ Club Programme, earlier known as “Vikas Volunteer Vahini (VVV) Programme”. The Programme was launched by NABARD in November 1982 to propagate the five principles of “Development through Credit”.
The five principles are:
- Credit must be used in accordance with the most suitable methods of science and technology.
- The terms and conditions of credit must be fully respected.
- Work must be done with skill so as to increase production and productivity.
- A part of the additional income created by credit must be saved.
- Loan installments must be repaid in time and regularly so as to recycle credit.
The “VVV Programme” was rechristened as “Farmers’ Club Programme” in 2005 by revisiting its earlier mission.
What are Farmers' Clubs
Farmers’ Clubs are grassroot level informal forums of farmers. Such Clubs are organised by rural branches of banks with the support and financial assistance of NABARD for the mutual benefit of the banks concerned and the village farming community/rural people. With the enhancement of the programme, other agencies like NGO, VAs, KVKs, SAUs etc. are also now included as agencies included in the formation and promotions of FCs.
The broad functions of the Farmers’ Clubs as envisaged are as follows :
- Coordinate with banks to ensure credit flow among its members and forge better bank borrower relationship,
- Organise minimum one meeting per month and depending upon the need, there would be 2-3 meetings per month. Non-members can also be invited to attend the meetings,
- Interface with subject matter specialists in the various fields of agriculture and allied activities etc., extension personnel of Agriculture Universities, Development Departments and other related agencies for technical know how upgradation. For guest lectures, even experienced farmers who are non members from the village/ neighbouring villages could be invited,
- Liaison with Corporate input suppliers to purchase bulk inputs on behalf of members,
- Organise/facilitate joint activities like value addition, processing, collective purchase of inputs and farm produce marketing, etc.; for the benefit of members. They can also sponsor / organise SHGs,
- Undertake socio-economic developmental activities like community works, education, health, environment and natural resource management etc.
- Market rural produce and products
New & Emerging Role of Farmers’ Clubs:
The broad objective of setting up Farmers’ Clubs would be to achieve prosperity for the farmers with overall agricultural development in its area of operation by facilitating credit counselling, technology counselling and market counselling. Over the years, the vision of Farmers’ Clubs has undergone a change and the role expected to be played by Farmers Clubs have been enlarged to enable them to facilitate transfer of technology, propagation of seed village concept, strengthen agricultural extension services, undertake collective purchase and distribution of inputs, production and marketing, capacity building of members, to act as Business Facilitators (BFs)/Business Correspondents (BCs) for banks, formation of Self Help Groups (SHGs), Joint Liability Groups (JLGs), Producers Groups/Companies, Federations of Farmers’ Clubs, undertake community related works, and assume the role of a leader.
NABARD’s support to FCs:
NABARD’s policy support for Farmers’ Club Programme lays stress on linking technologies with farmers’ club members and also facilitating market access through the following mechanism:
- Capacity building of members of Farmers’ Clubs including leadership training.
- Linkage with technology/markets
- Self Help Groups (SHGs)/Joint Liability Groups (JLGs) formation
- Forming Federations of Farmers’ Clubs/Producers’ Groups/Companies
NABARD’s support o Farmers’ Training & Rural Development Centres (FTRDCs):
NABARD supports recurring expenses of Farmers’ Training and Rural Development Centres (FTRDCs) set up by institutional agencies. NABARD has set up a Farmers’ Technology Transfer Fund (FTTF) to be used to facilitate transfer of technologies and market linkages especially through Farmers’ Clubs besides need based support for formation of Producers’ Groups/ Companies, Federations of farmers’ Clubs etc.
Importance attached to FC Programme by Govt. of India:
All Regional Rural Banks have been directed by Union Finance Minister to have at least one Farmers’ Clubs per branch. In view of the importance attached to the programme by NABARD & GOI and also in the context of business advantages that accrue to institutional agencies, banks may adopt the Farmers’ Club programme as their business strategy.
Benefits of Farmers' Club to Bank Branch
The formation of Farmers’ Club lead to better Banker-Borrower relationship in the area. An Evaluation study of Farmers’ Club Programme (FCP) carried out by IIM, Lucknow has brought out the following advantages of FCs to bank branches:
- Increase in deposits.
- Increase in the credit flow and diversification of lending.
- Generation of new business avenues.
- Increase in the recoveries and decline in the non-performing assets.
- Reduction in the transaction costs of financial institutions/ Banks.
- Socio economic development of the village.
- A win-win situation both for the banker and borrower.
- Besides these benefits to the banks, the Farmers’ Club has also been instrumental in certain social welfare measures like free eye check-up camp, Animal Health Care Camp, Mass vaccination camp, community works like road, check-dams, afforestation, etc.
- Enhancement in bargaining power for bulk purchase of inputs and marketing of their produce.
Who can form Farmers' Clubs
All Institutional Agencies (Commercial Banks, Cooperative Banks and Regional Rural Banks) and all grassroot level organisations (NGOs, PRIs, State Agricultural Universities, KVKs, ATMA, Post Offices etc.) are eligible to form Farmers’ Clubs
Farmers’ Club is an informal forum in the villages. It can be promoted in a village/ cluster of villages, generally in the Operational Area of a Bank. While Farmers’ Club should have minimum of 10 members, no upper limit in the membership is envisaged. Every Club would have three office bearers - One 'Chief Coordinator/Volunteer/ President, the other 'Associate Coordinator/Volunteer/Vice President. The office bearers would be elected by Club Members on a democratic basis for a term to be decided by the Club. The office bearers should be residents of the area of the operation of the club. No NGO/FC promoting agency representative can be office bearer of the club.
Functions of the Office bearers:
The main functions of the office bearers would be to convene meetings, to arrange meetings with experts, maintenance of Books of Accounts, coordination with Bank, Line Departments of the State Governments, maintaining proper liaison with all concerned.
All villagers except willful defaulters can become members of the club. The club must make endeavour to raise their own resources by way of contribution from members, undertaking certain business services such as bulk procurement of inputs and collective marketing of agricultural produce, functioning as Business Facilitators (BFs), agents for insurance and other services etc.
Steps in the formation of Farmers’ Clubs
- Bank branch can promote the clubs directly or engage Farmers’ Club promoting agencies like Krishi Vigyan Kendras (KVKs), Agriculture Universities, NGOs, Corporates, etc.
- All grassroot level organisations (NGOs, PRIs, State Agricultural Universities, KVKs, ATMA, Post Offices etc.) are eligible to form Farmers’ Clubs
- Select a village/ cluster of villages suitable for launching Clubs in the operational area of the bank branch.
- Identify a few progressive farmers and borrowers with good track record of proper loan utilisation, aptitude and capacity for team work. (Success of the Club hinges on the right choice of members).
- Encourage the members to select a Chief Coordinator/Volunteer/President and an Associate Coordinator/Volunteer/Vice President and a Cashier. This will ensure collective leadership and continuance of the Club.
- Provide orientation training to them with the help of NABARD (Regional Office / DDM or trained officers from the bank) before launching.
- Encourage members to convene monthly meeting regularly, guide them to have meaningful discussion and take necessary follow up action.
- Motivate members them to identify credit and non-credit needs (training, socio-economic, village infrastructure, etc.), prepare a plan of action and accordingly arrange for expert talks, counselling, need-based activities, etc. with the help of Government Departments and other agencies concerned.
- Ensure that the members maintain Membership Register, Meeting Register, Minutes Book and Books of accounts .
- Evolve a performance parameter and measure the Clubs’ contribution annually.
- Use Club as a tool in aid of branch not only in the matter of credit and recovery but also in facilitating promotion of SHGs, micro credit, Financial Inclusion and convergence of services.
NABARD provides financial support to FCs for an initial period of 3 years. Sponsoring Banks/Agencies are expected to give a consent letter for supporting the clubs for a period of two years beyond the initial period of 3 years of NABARD assistance.
No. of Clubs to be promoted by a Single Agency:
There is no restriction on the number of clubs to be formed a single agency.
Rating of Farmers; Clubs
To facilitate the graduation of farmers’ Clubs into Federations of Farmers’ Clubs or Producers’ Groups/Companies, it would be desirable for the sponsoring agencies to rate the Farmers’ Clubs as per prescribed parameters. However, the rating of the clubs is not linked to any releases to be made out of the assistance under the new policy.
Awards to Best Working Clubs:
Awards would be given to be provided to best working clubs at the district, state and national levels, based on the rating norms.
Capacity Building for Adoption of Technology (CAT):
NABARD’s Capacity Building for Adoption of Technology (CAT) programme may be used for the benefit of farmers’ club members for training and exposure visits within and outside the State.
Release of assistance:
Release of assistance will be in 2 instalments viz. 50% by way of release in advance and the remaining 50% by way of reimbursement.
Incentives to sponsor agencies:
Incentive is provided to agencies (other than banks) for the formation and nurturing of FCs.
Financial Support from NABARD
NABARD assistance to all agencies will uniformly be @Rs.10,000/- per club per annum for a period of 3 years irrespective of whether they are institutional or other agencies and also the region concerned. The assistance will be towards meeting the following minimum and mandatory expenses:
Formation & Maintenance Expenses
Base Level Orientation Training Programme (BLOTP)
Meet with Experts (2 Programmes in a year)
NGOs/KVKs will be provided with an incentive of Rs.2,000/- per club out of the total assistance of Rs.10,000/- per club per annum.
NGOs/KVKs who are operating in hilly/remote/naxal affected areas, will be provided with additional incentive of Rs.3,000/- per club for a period of 3 years over and above Rs.10,000/- referred to above.
Revival Package of Assistance for Dormant Clubs:
In order to revive the dormant/defunct FCs, NABARD has introduced a revival package. The assistance may be used towards meeting the revival cost including arranging exposure visits for members of such dormant clubs as well as concerned branch managers. Package of assistance may be extended to NGOs/VAs for revival of clubs promoted by banks.
Sustainability of Farmers’ Clubs:
Regular source of income and consistency in their activities is the key to sustainability of FCs. Sustainability of Farmers’ Clubs may be ensured through creation of a corpus at the club level through measures such as:
- Token membership fees (to be decided by members)
- Monthly savings (to be decided by the Club members)
- Service charge for SHG/JLG loans recommended to banks @0.5% and 1%. (This is suggestive and the club members can decide themselves.)
- Commission/incentive for selling insurance products (as per negotiations with individual insurance companies).
- Commission for acting as Business Facilitators/Business Correspondents (to be negotiated with individual banks).
- Any other charges for services provided to other agencies like Government, Corporate Bodies etc.).
Such steps are expected to make the Farmers’ Clubs self sustaining over a period of 3-5 years, when the funding support from institutional agencies is withdrawn.
Status of Farmers’ Clubs :
During 2009-10, 16,590 Farmers’ Clubs have been formed taking the cumulative number of farmers’ Clubs to 54,805 as on 31st March 2010.