Promotion of Rural Off-Farm Sector assumes significance in the context of the pressing need of reducing rural India’s over dependence on agriculture by providing alternate livelihood options and thereby curbing large-scale migration of small and marginal farmers and agricultural laborers to urban areas. Over the past three decades, NABARD designed several refinance and promotional schemes for development of Rural Off-Farm Sector and has been making constant efforts to broad base and refine them in response to field level needs. The focus has been on greater credit flow, provision of credit to the unreached and provision of linkages for small, cottage and village industries, handloom, handicrafts and other rural crafts and service sector in the decentralized sector in the rural areas.
Building an entrepreneurial culture and necessary skills among the rural youth and women has been a priority area for NABARD along with developing markets for the rural Off Farm sector. NABARD has also been actively involved in promoting innovations in rural areas in Farm and Off-Farm sectors.
2. Functions of OFDD
- i. To provide solutions for promotion of activities generating/ enhancing livelihoods under the rural off-farm sector.
- ii. NABARD Head Office designs schemes, approves the budgets, provides guidance to ROs, undertakes monitoring of the projects etc. Regional Offices of NABARD implement the projects at field level.
- iii. To provide financial support as grant depending on the nature of the project, activities within the project, stakeholders involved, etc.
- iv. To support marketing activities of rural artisans by extending grant assistance for rural haats, rural marts, exhibitions, etc.
- v. To support rural artisans for formation of Off-farm Producer Organizations (OFPOs) in clusters to take up collective business activities, build capacity and develop market linkages.
- vi. To support artisans for registration of their products under Geographical Indication which confers legal protection, boosts exports and promotes economic prosperity of the producers.
- vii. To support innovations in Off-farm Sector through Rural Business Incubation Centres, DPR based projects, etc.
- viii. As per extant policy, NABARD provides financial support for providing end to end solutions for promotion of activities which generate or enhance livelihoods under the Rural Off-Farm Sector. A project is expected to cover potential survey, capacity building, support services, marketing aspects, etc., for viable activities under Rural Off-Farm Sector.
3. Financial Support provided by NABARD
Financial support is provided in the form of grant assistance depending on the nature of the project and activities within the project, stakeholders, etc.
i) Skill Development Initiatives
In tune with Govt. of India’s goal, NABARD has developed a structured approach for addressing the skill gap in rural India through demand and outcome-based programmes through multiple stakeholders in skill development ecosystem leading to wage/self-employment. NABARD considers projects where the implementing agencies ensure a minimum settlement rate of 60% (Job placement or self-employment). The projects are linked to outcome and portal driven nabskillnabard.com.
As an effort to institutionalize the Entrepreneurship and Skill Development initiatives, NABARD provides financial support to specialised institutions viz., RUDSETI/RUDSETI type of Institutions & RSETIs, which provide entrepreneurship development and training to rural youth/women on various skills, which can generate better livelihood opportunities. Assistance is provided to these institutions, which comply with the criteria stipulated by NABARD.
In order to broad base the skill initiatives, in addition to RSETI/RUDSETI, new set of partner agencies (NSDC affiliated training institutes, Government agencies, Corporates under CSR, NGOs, Trusts and other voluntary agencies) have been included so as to cover the skill requirements of different segments of society.
Concerted efforts are made to reach difficult and underdeveloped areas like North Eastern region, J & K, Laddakh, Hill states, island UTs, etc. Skill interventions of NABARD focus not only on traditional trades like tailoring, welding and carpentry, but also on new-age skills such as computer skills, electronics, Drone operators, General Duty Assistant etc.
ii) Off Farm Producer Organisation (OFPO)
In order to organise artisans and weavers from off farm activity clusters into a formal registered entity as also to support producers to take up collective business through capacity building, business planning, market linkages, design development etc., a scheme for formation and nurturing of Off Farm Producer Organisations (OFPOs) was initiated during the year 2016-17. Under this Scheme, support is extended to an eligible entity to act as Producer Organisation Promoting Institution to mobilise rural off farm producers for undertaking business collectively so as to enable scale as well as better bargaining power, facilities and opportunities of business.
OFDD is continually pursuing the sanctioned OFPOs to get on-boarded onto the Open Network for Digital Commerce (ONDC) so that all their products have a greater reachability and connectivity with the end consumers.
iii) Geographical Indications
A Geographical Indication (GI) is a form of Intellectual Property Rights that identifies goods originating from a specific geographical location. NABARD’s interventions in the GI ecosystem are in the form grant support for pre-registration as well as post-registration activities. Financial support is provided to facilitating agencies in identification of products that have the potential to be registered as GI and their subsequent registration as a GI product. Similarly, NABARD facilitates registration of producers as Authorized Users, enabling them to get the exclusive right to use Registered GI. The GI registration has helped in better price realisation to the artisans.
The prominent products supported by NABARD for GI registration are Nizamabad Black Pottery (Uttar Pradesh), Gulabi Meenakari (Uttar Pradesh), Ladakh Wood Carvings (Jammu & Kashmir), Udupi Saree (Karnataka), Kathputlis (Rajasthan), Ringal Craft (Uttarakhand) etc.
iv) Marketing Initiatives
To enable the artisans to market their products and learning directly from the market feedback for better value realization of their products in future, the financial assistance is provided by way of grant on selective basis.
a) Rural Hart
NABARD extends support for setting up of new rural haats and for creating basic infrastructural facilities in existing rural haats which provide rural communities an accessible market to buy and sell their farm and off-farm produce. Rural Haats have emerged as forward linkages for Producer Organizations, Village Watershed and Tribal Development Committees.
b) Rural Mart.
The financial support is extended to cover the risk involved in the initial stages towards operational expenditure for setting up of rural mart at potential locations. NABARD also provides support for mobile vans for PACS and NABARD supported FPOs, OFPOs. The support helps the producers to market their products in far-flung areas directly at the customers doorsteps.
NABARD supports and provides marketing platform to rural artisans, weavers and producers to exhibit their traditional art crafts and products through exhibitions and melas which facilitate the artisans to showcase their product and also enable them to sell directly to the consumer without middlemen.
NABARD supports organising exhibitions independently or in collaboration with major partners. Grant assistance is also extended for enabling artisans and producers to participate in exhibitions at different places in India.
d) Stall in Mall
The scheme provides a platform to the artisans, weavers and members of OFPOs, FPOs, SHGs, JLGs, etc., supported by NABARD under various interventions, to exhibit their products, understand the market demands, customer preferences, improve their products and provide an exposure to deal with the urban consumer. NABARD provides financial support for hiring and/ or setting up of temporary stalls in reputed malls, stores, market complexes, reputed hotels, and prominent premises (Govt or private), places with good footfall.
v) Rural Business Incubation Centre (RBIC)
In order to develop a supportive ecosystem for agri entrepreneurs NABARD started supporting setting up of Rural Business Incubation Centre in 2017-18. The policy envisaged extending support to eligible institutions like agriculture universities and other reputed institutions (Host Institution) for setting up RBICs and meet the eligible operational expenditure for functioning for a period of five years. It is a step towards promoting more agri startups, agri and rural entrepreneurs and enterprises.
The RBICs supported by NABARD nurture start- ups, agri enterprises, entrepreneurs, farmers, Farmer Producer Organisations, etc., working in various areas such as irrigation, seed production, bio- pesticides, bio fertilizers, precision farming, agro-processing, marketing, bio fuel, drinking water, sanitation, energy, health, education, etc. The RBICs will provide business support services and resources, marketing, finance to agri-startups and agri-entrepreneurs to develop them into viable commercial entities which will result in both direct and indirect benefits accruing to the farmers.
v) Catalytic Capital Assistance to Incubators/ Subsidiaries of NABARD
The objective of the scheme is to support incubation centres and subsidiaries of NABARD to in turn support start-ups in the stage of ‘Valley of Death’ in farm and non-farm sector to stimulate commercialisation of ideas and inventions that will lead to enterprise creation, increased employment and income-generating activities in rural areas.
vi) Projects in DPR mode
NABARD extends support for development projects in the off farm sector, which are not covered under the existing schemes in DPR mode. Support is extended for promotion and upscaling of innovative projects, promotion of off farm value chains, upgradation of innovations to business level, etc.
viii) Capacity Building Fund for Social Stock Exchange (CBF-SSE)
The CBF-SSE with a total corpus of Rs 100 crore has been housed in NABARD with funding to be contributed by NABARD, SIDBI, BSE, NSE, and Others. The Fund is to be used for awareness creation and capacity building of the different stakeholders of CBF-SSE, viz. Non-Profit Organizations (NPOs), For-Profit Enterprises (FPE), investors, funders, capacity builders, social auditors and information repositories, and administrators about the aims and objectives of the SSE, its functioning, the opportunities for funding that it offers, inter se role amongst the stakeholders, and also in understanding the need and importance of accurately reporting on outcomes and impact.
ix) Stand up India
Stand-Up India Scheme (SUI) launched by Government of India on 5 April 2016 facilitates bank loans ranging from Rs.10.00 lakh to Rs.1.00 crore to at least one SC or ST borrower, and at least one women borrower, per bank branch for setting up an enterprise.
NABARD continues to be the ‘Connect Centre’ for organizing pre and post disbursement handholding events to share best practices, review of the progress, problem solving and guiding the potential borrowers.
x) Special Credit Linked Capital Subsidy Scheme (SCLCSS)
NABARD is one of the nodal agencies for channelizing the subsidy under the Special Credit Linked Capital Subsidy Scheme (SCLCSS) for SC-ST beneficiaries.