Nabard-Rural-Pulse-XIX - page 1

Department of Economic Analysis and Research
Rural Pulse
Issue - XIX, Jan. - Feb. 2017
Livestock contributes about 36% of the income of small and marginal farmers in
India. Naturally for doubling the incomes of farmers, it is important to focus on
the animal husbandry sector. Inadequate flow of bank credit is one of the reason
for low private capital formation in agriculture (including animal husbandry) –
and it is still low in the North-Eastern States. Area Development Schemes along
with Banking Plans for dairy and animal husbandry activities were developed
by NABARD, to facilitate adequate long-term institutional credit flow to the
farmers, for private capital formation in the States of Assam, Meghalaya and
Manipur. This issue of Rural Pulse portrays salient features of distinct models of
Area Development Schemes and Banking Plans, successfully implemented in the
North-Eastern States during 2014-15 to 2016-17, for credible replication in other
States of the country.
Area Development Schemes for Dairy in North-East India:
Replicable Models for Doubling Farmers’ Incomes
Dr.P.S.Harikrishnaraj* and Dr.K.U.Viswanathan**
*Assistant General Manager and **General Manager, NABARD, Assam Regional Office, Guwahati
Doubling Farmers’ Incomes
The Situation Assessment Survey (SAS)-2014 of
the National Sample Survey Organisation (NSSO)
categorizes farmers’ income (all size-classes of
farmers) under four heads: (i) net receipts from
cultivation; (ii) net receipts from farming of
animals (including poultry, fishery); (iii) income
from non-farm businesses; and (iv) income from
wages and salaries. Farmers’ total income is
growing at 3.5% annually. However, income from
livestock is growing at about 14.5% per year. The
share of income of all farmers from cultivation
rose marginally from 45.8% in 2002-03 to 47.9%
in 2012-13, yet share of receipts from livestock
farming increased perceptibly from 4.3% to 11.9%
over the same period. So, to double the incomes
of farmers it is important to facilitate capital
formation under the animal husbandry sector.
Investment Credit for Capital Formation
Small and marginal farmers’ capital base is low
and their investible surplus is also limited to allow
investments in fixed assets. Capital formation is
predominantly dependent on investment credit.
Credit acts as an enabling and critical input in
agriculture productionprocess at the farmers’ level.
The share of investment credit in total agriculture
credit declined drastically from 35.4% (2006-
07) to 19.6% (2015-16). International Livestock
Research Institute conducted a study in Assam and
reported that limited credit facility to the resource-
poor rural farmers was a major constraint for the
development of animal husbandry in Assam. To
boost farm level investments through credit from
banks as a strategic mechanism, NABARD has
formulated Area Development Schemes (ADS)
with different models and Banking Plans.
Area Development Schemes
Area Development Schemes (ADSs), based on
the identified potential for investment credit,
backward-forward linkages available and farmers’
felt needs, are implementedandmonitoredwith the
involvement of banks and all other stakeholders.
NABARD, Assam RO, has prepared ADSs on
dairy, fisheries, goatery and piggery activities by
adopting cluster approach. Banking plans were
incorporated as part of these ADSs involving
1 2,3,4
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