Professional Documents
Culture Documents
..
"Education is a liberating force, -and in
our age it is also a democratising force,
..
cutting across the barriers of caste tJnd
class, smoothing out inequalities imposed
by birth and other circumstances. "
- Indira Gandhi
Indira Gandhi MNR-OOl
t@J
,
National Open University
School of Agriculture Indian Agricultural
Development
Block
3
INSTITUTIONAL INFRASTRUCTURES:
PUBLIC, PRIVATE AND PUBLIC-PRIVATE
PARTNERSHIPS
UNIT 9
Agricultural Credit, Insurance, Warehouses
, and Corporations 5
UNIT 10
Public Distribution System 34
UNIT 11
Cooperatives; Farmers Organization and
,~on-Governri1ent Organizations 46
UNIT 12
. Agricultural Research, Education and Extension in India 65
PROGRAMME. DESIGN COMMITTEE
Prof Panjab Singh ' Dr. T. Haque, Former Chairman
Former Vice Chancellor, Banaras Hindu University Commissi0l}"t\gricultural Costs and Prices .
Banaras (UP) Ministry ifii'Agriclllture, Shastri Bhawan
New Delhi-I 10 001
Prof. D. Jha, Former Director
National Centre for Agri. Eco. & Policy Research Dr. Suresh Babu
Library Avenue, !'usa, New Delhi-I 10 012 International Food Policy Research Institute
(IFPRI), 1033 K Street, NW Washington
Dr. R.P. Singh, Former Head
DC 20006, US
Division of Agricultural Economics
Indian Agricultural Research Institute (lARI) Dr. V Balaji
Pusa, New Delhi-I 10 012 Head, Information Resource Management
Dr. P.N. Mathur , International Crop Research Institute 'for
Former Deputy Director Generalifixt.), ICAR Semi-Arid Tropics (ICRISAT)
16B, Pocket-AN, DDA Flats, Shalimar Bagh Patancheru-502 324 (AP)
New Delhi-I 10 088
Dr. Mruthyunjaya, National Director
Dr. lp. Mishra National Agriculture Innovation Project
Assistant Director General (P&ESM), ICAR Pusa, New Delhi-I 10 012
Ministry of Agriculture, Krishi Bhawan
New Delhi-I 10 001 Dr. VP.S. Arora
Centre for. Business Management
Dr. Prem Vashishtha GB Pant University of Agriculture & Technology'
Agro Economic Research Centre Pantnagar-263 145 (Uttaranchal)
Delhi University, Delhi-110 007
Dr. Pramod Kumar
Dr. Praduman Kumar, Professor (Retd.)
Division of Agricultural Economics
Division of Agricultural Economics
IARI, Pusa, New Delhi-I 10 012
fARI, Pus a, New Delhi-1I0 012
Prof. Madhulika Kaushik
Dr. M.S. Bhatia, Member
Commission for Agricultural Costs and Prices School of Management Studies
New Delhi- 110 00 I IGNOU, New Delhi-I 10 068
Programme Coordinators: Prof. B.S. Hansra. Prof. M.K. Salooja and Dr. Praveen Kumar Jain
MATERIAL PRODUCTION
Mr. Rajiv Girdhar Ms. Rajshree Saini Sh. Ramesh Nath
Section Officer (Publications) (Proof Reader) (Word Processing)
SOA-, IGNOU, New Delhi SOA, IGNOU, New Delhi SOA, IGNOU, New Delhi
Feb.,.2012 (Reprint),
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Unit 9 deals with the institutional infrastructure for agricultural credit, insurance,
warehouses and corporations. Both institutional and non-institutional sources are
working to meet the credit need of the agriculture sector.Agriculture production is
subjected to risk and uncertainty due to biological nature of agriculture, natural
calamities and price fluctuations. To protect the farmers from risk and uncertainty,
insurance programmes have been started. Warehouses and storage infrastructure
have been created to protect the quality and quantity of stored agricultural products.
Unit 12 deals with the agricultural research, education and extension system in '
. India. Institutional development for agricultural research,education and extension
has made spectacular growthafter independence. The unit will define the roles
and importance of agricultural research, education and extension for Indian'
agricultural development.
The material provided in this block is supplemented with various examples and
activities which will make the learning process simple and interesting. A list of
reference books has been provided at the end of each unit for further detailed
reading.
UNIT 9" AGRICULTURAL CREDIT,
INSURANCE, WAREHOUSES
AND CORPORATIONS
Structure
9.0 Objectives
9.1 Introduction
9.2 Agricultural Credit Structure
9.2.1 Sources of Agricultural Finance
9.2.8 Micro-Finance
9.6 KeyWords
9.1 INTRODUCTION
Fann finance plays a vital role in the agro-socio-economic development ofthe country
both at micro-level/fanners and at macro level. A number of institutions have been
promoted to provide farm finance. Knowledge and aware~ess of different institutional
agencies are important for the farmers to formulate appropriate farm plans and take
relevant decisions. Insurance is an instrument to protect the farmers income from
crop losses, induce them to adopt latest technology and take up commercial
agriculture. A number of steps have been taken by the govemment to set up a sound
system to be able to efficiently and substantially undertake crop insurance. In addition
to field losses, the country also losses in large quantity of agricultural produce in the
absence of proper storage system. Storage of farm produce adds to farmers income,
stabilizes prices, reduces losses of produce which has the potential to meet food
security. Recognizing the importance of storage, the Govemment 0 I Indiainitiated
creation of storage structures and is also promoting private participation to set up
storage structures especially cold storages. The unitwould.appraise you about the
r
credit, insurance and storage facilities available in the country.
0 Money lenders
ii) Relatives
ill) Traders
iv) Commission agents
v) Landlords
6
2). Institutional sources Agricultural Credit, Insurance,
Warehouses and Corporations
o Cooperatives
It is observed from the Table 9.1 that the share of non-institutional sources of finance
has reduced from 93 per cent in the year 1951 to 31 per cent in 1991. This has
mainly been possible because of the conscious and concerted efforts of the
government and policy makers leading to increased accessibility of institutional
sources offinance.
(Percent)
C. Unspecified - - - - 3.1
Source: All India Debt and Investment Survey and REI Bulletin, February 2000
Table 9.2 presents the flow of credit to agriculture sector by various institutional.
sources. You can see that the amount of credit that has been disbursed stands at
Rs ..62;046 crores in 20011-02 to Rs 2,00,000 crores in year 2006-07. It is
projected that the amount of credit that would be purveyed through various
institutional sources would stand at Rs 5,75,427 crores by the year 201 1-12. This
would demand that the health and performance of the financial institutions be
continuously monitored and supported.
7
Institutional Infrastructures: Table 9.2: Actual and Estimated Flow of Agricultural Credit by Institutional
Public, Private and Public-
Private Partnerships
Sources in India
(Rs. crore)
Source: Working report ofthe Eleventh Five tear Plan Document, Government of India
Cooperatives in India are organized in two systems i.e., CA) Three tier and (B)
two tier structures. Both cooperative credit societies and non-credit
cooperative societies have three-tier structure and two-tier structure in all the states
except Bihar, Jammu and Kashmir, Maharashtra and Uttar Pradesh, where the
structure is unitary.
8
Cooperative Credit Institutions Agricultural Credit, Insurance.
Warehouses and Corporations
Scheduled UCBs
(55)
-.
Operating in State Cooperati ve District Central Primary
single state (31) Banks (31) Cooperative Agricultural
Bunks (367) Credit Societies
( 108779)
Operating in
Single State
(1788)
Note: Figures in brackets indicate the number of institutions at end-March 2006foJ' UCBs
and at end-March 2005 for rural Cooperative credit institutions.
In this system at the lowest tier is the Primary Agricultural Credit Societies (PACS) .
that are organized at the village level, the second tier is the District Central Cooperative
Banks (DCCB) organized at the district level and the third and uppermost tier is the
State Cooperative Banks (SCB) organized at the State Level.
1) Borrow adequate and timely funds from DCCBs and help the members in
financial ~natters.
2) Attract local savings in the form of share capital and deposits from villagers,
thereby inculcating the habit of thrift,
6) Associate with the programmes and plans meant for the socio-economic
development of the village.
9) Supply certain consumer goods like rice, wheat, sugar, kerosene, cloth, etc., at
fair prices.
9
'.-
Institutional Infrastructures: PACS were mostly concentrated in the Western and Eastern regions of the country,
Public, Private and Public-
Private Partnerships
The North-Eastern region is relatively underserved. On an average, a pAc~served
seven villages for the country as a whole at end-March 2005. However, PACS in
Southern and Eastern regions operated with a higher membership and borrowing
members. The number of profit-making PACS was more than the n~nber ofloss
making PACS in Northern, Eastern and Central Regions. Out-of 1,08,779 PACS
as oh march 31,2005,66,756 (61.4 per cent) were viable, 32,614 (30.0 per-cent)
potentially viable, 4,741 (4.4 per cent) dormant, 2,033 (1.9 percentjdefunct and
2,635 (2.4 per cent) others. Problem of viability was most acute in the North-
Eastern region with nearly 33.4 per cent PACS being dormant. The Western Region
had highest share of viable PACS (viable/potentially viable). ~
1) Supervise and inspect the activities ofPACS and help the credit societies run
smoothly.
2) . Maintain close and continuous contact and gulde the primary societies and
provide leadership to them.
5) They accept deposits from the member societies as well as from public.
4) They act as banker's bank in DCCBs, supervise, control and guide the activities
ofDCCBs.
\
5). They grant subsidies to DCCBs for the smooth functioning of cooperatives.
10
6) Similar to any commercial bank, they also perform normal banking operations.
B. Two Tier Structure Agricultural Credit, Insurance,
Warehouses and Corporations
Under the two tier structure of cooperative credit, there are two tier one is state
level and the other is at the districtltaluka levels. The state level organization is called
State Cooperative Agriculture and Rural Development Banks (SCARDB). The
.district ltaluka level organization is called Primary Cooperati ve Agriculture and Rural
Development Banks (PCARDB).
As at the end-March 2005, the long term cooperative credit structure consisted of
20 State Cooperative Agriculture and Rural Development Banks (SCARDB) and
727 Primary Cooperati ve Agriculture and Rural Development Banks (PCARDB).
Ofthe 20 SCARDBs, eight were with U1~tarystructure with branches, while twelve
were federal/mixed in nature. In those States that were not served by the long-term
structure, separate sectionsofthc state cooperative banks looks after the long-term
credit needs. In the North' Eastern region, only three States (Assam, Manipur and
Tripura) had long-term structure.
1) They provide long term finance to the needy farmers for the development of_
land, increasing agricultural production and productivity ofland.
2) They provide loans for minor irrigation and for redemption of old debts and
purchase ofland.
The LOBs are now being termed as Primary Cooperative Agricultural andRural
Development Banks (PCARDB). Out of727 PCARDBs operating in 11 States,
only 262 PCI}RDBs made profits. PCARDBs operating in only six States (Himachal
Pradcsh, Punjab, Orissa, Rajasthan, Maharasbtra and Kerala) eamed net profits.
PCARDBs in other States (Chhattisgarb, Haryana, West Bengal, Karnataka, Madhya
Pradesh ana Tamil Nadu) incurred net losses.
As an apex bank in the two tier Cooperative credit structure, it provides long-term
finance to PCARDBs and also to its affiliated branches working in the stateS.
Branches ofSCARDBs. PCARDBs and individual entrepreneurs are the members
of the SCARDBs. NABARD and Life Insurance Corporation (UC) subscribe for
its debentures in large amounts. NABARD is also the refinancing agency to the
SCARDBs.1t acts as a link between NABARD and the Government in the long-
term banking transactions. It supervises, inspects and guides the PCARDBs in their
..... ...
,
11
Institutional Infrastructures: banking operations. It floats debentures for raising necessary funds. It inculcates the
Public. Private and Public-
spirit and practices ofthrift among the member banks by mobilizing savings and
Private Partnerships
stimulating capital formation. The SCARDBs generally purveys loans to member
banks for the redemption of old debts, improvement, reclamation and developments
of land, purchase of agricultural machinery and equipment and development of minor
irrigation.
2) Bank ofIndia.
6) Canara Bank,
Credit was no longer to be provided only to those who could furnish security in the
form of property and projects. Spurred by the success of first spell of nationalization
of 14 commercial banks six more banks in the private sector, having deposits not
less than Rs. 200 crore were nationalized on 15 April, 1980. The six banks were:
2) .Andhra Bank,
12
3) New Bank ofIndia, Agricultural Credit. Insurance.
Warehouses and Corporations
4) VijayaBank,
Branch expansion received a further spurt between January, 1979 and March, 1984.
Over this period, the public sector banks opened 7,612 new offices, of which 5,384
offices were in unbanked centres.
The total number of branches of schedule commercial banks at the end-June 2006
was 69,417 comprising ono, 77 6 rural branches, 15,370 semi-urban branches and
23,271 urban and metropolitan branches (Table 9.3). The Southern region continued
to account for the highest percentage of existing bank branches, followed by the
Central, the Eastern, the Northern and the Western regions. The share of North-
Eastern region remained low at 2.8 per cent at end-March 2006. During 2005-06,
most of the new branches were opened in the Northern (286) and Southern (252)
regions (Table 9.4).
13
Institutional Infrastructures:
9.2.4 -
Regional Rural Banks
Public, Private and Public-
Private Partnerships
The Regional Rural Banks (RRB) were set up in 1975 to supplement the efforts of
the commercial banks and the cooperatives in extending credit to weaker sections
of the rural community-small and marginal farmers, landless labourers, artisans and
other rural residents of the small means. The intention in having these new banks
was that there should be an institutional device which combined the local feel and
familiarity with the rural problems which the cooperatives possessed and the degree
of business organization and modernized outlook which the commercial banks had,
with a view to reaching the rural poor more extensively. Consequent upon the
recommendations of the Working Group, 5 RRBs were initially set up in 1975 that
increased to 196.
1) To supply all types ofloans to weaker sections, viz., crop loans, medium-term
loans and long-term loans.
2) To provide adequate supplies of requisite inputs and technical guidance for the'
development of agriculture on timely and regular basis.
5) To mobilize deposits and small savings from weaker sections through incentives.
\
. '
These societies have been launched in district having Small Farmers Development
Agency (SFDA) and Marginal Farmers and Agricultural Labourers Development \
Agency (MF AL) schemes. Each society has a jurisdiction of a,block or a portion
thereof. A district union of these societies suggest ways and means of improving and
organizing the societies for executing specificactivities, The membership of the
societies is open to those who are eligible to receive assistance under SFDAI MF AL
programmes. Others may be associate members but they will not have any voting
rights. The lead bank ofthe district generally sponsors the fSS in financial matters.
, ,
1962:-- ..
.Role of the DI CGC: (1) The Corporation gives protection to depositors particularly' '
the small depositors; from loss of their savings in the event of bank's failure; such 15
Institutional Infrastructures: protection increases the confidence of the depositors in the individual banks and
Public, Private and Public-
Private Partnerships
reduces the occurrence of panicky withdrawals of deposits; (2) the Corporation,
contributes to the stability and orderly growth of individual banks as well as collectively
of the banking system; and (3) itplays an active role in developing the banking
habits ofthe people and ensures a largermobilization of their savings.
9.2.8 Micro-Finance
Micro-Finance initiatives are now recognized as a cost effective and sustainable
way of expanding outreach of the banking system to the rural poor. The guiding
spirit behind microfinance initiatives is under.
There are two major models under micro-finance, i.e., Self-help Group (SHG)-
Bank Linkage and Micro-Finance Institutions (MFI)-Bank Linkage being operated
in the country.
The SHG-Bank Linkage programme Was launched in 1992 as a Pilot Project for
linking 500 SHGs and supported by the Reserve Bank ofIndia through its policy
support. The Programme envisaged organization of the rural poor into SHGs, building
their capacities to manage their own finances and then negotiating bank credit on
commercial terms. The poorwereencouraged to voluntarily come.together.to save ~
small amounts regularly and extend micro loans among themselves. Once the group
attained the required maturity for handling larger resources, bank credit could follow.
The focus of ~icro- finance initiatives is largely on those rural poor who have 1).0
access to the formal banking system. The target group broadly comprises small and
marginal fanners, landless agricultural and non-agricultural labourers, artisans and
craftsman and other rural poor engaged in small businesses such as vending and
hawking.
The main advantages of the programme are on-time repayment; door-step savings
and credit facilities to the poor and exploitation of the untapped business potential in
rural India. The programme, which started as an outreach programme, has, in fact,
achieved more than mere provision of thrift and credit facilities to·the poor women.
It has set in motion an irreversible process of socio-economic empowerment of
rural women. The programme continues to be the world's largest micro- finance
programme.
The numbers of SHGs have grown to 2.2 million as on March 31,2006. Banks
have extended loans of Rs 4,499 crore during 2005-06. The average per SHG
bank loan was Rs. 50,915 in 2005-06. The number of poor families benefiting
from this programme is 32.9 million as on March 31,2006 (Table 9.6). Out of the
16 three models that have emerged under the SHG-Bank Linkage Programme about
!
80.7 per cent ofthe SHGs were financed by banks under Model II involving NGOs Agricultural Credit, Insurance,
and Government agencies (Table 9.7). Warehouses and Corporations
1998-99 33 33 57 57 52 52
17
Institutional Infrastructures: a) World Bank
Public, Private and trublic-
Private Partnerships It is officially known as International Bank for Reconstruction and Development
'(IBRD). It is a specialized agency of the United Nations. Its affiliate bodies are
Internati~nal Monetary Fund (IMF, 1945), International Finance Corporation (IFC,
1956) and International Development Association (IDA, 1960). Its main focus is
, laid on loans and advances and technical assistance to promote the balanced growth
of'international trade and economic development.
Member c~untries can avail loan facilities and loans can be made to private firms, if
member. Governments will guarantee repayment to bank. Projects like agriculture,
mining, Irrigation, communications, transportation and general industrial development
are being considered by the World Bank for grant of loans, The repayment period
ranges from 10 to 35 years. Interest rates for the poorest countries are almost
negligible or zero but a service charge of 0.5 to 1 per cent is included. For private
firms and industrial developmentprojects interest rates are nearer to commercial
lending rates. Regarding technical assistance the bank's technical mission along with
personnel of FAO (Food and Agriculture Organization) assist in surveying, evaluation
and setting up of projects in the member countries. The headquarter of World Bank
is in Washington, D.C., USA. The quantum ofloans is decided based on the voting
of loans which is related to subscription of capital paid by member countries
The IDA was instituted in September 1960 and.is an affiliated organization ofthe
International Bank for 'Reconstruction and Development (World Bank). It
concentrates its assistance in those countries with an annual per capita gross national
product of less than $ 790 (at 1983 rate). Its resources consist mostly of
subscriptions, general replenishments from its.more industrialized and developed
members and special contributions and transfers from the net earning of the bank.
Its members must also be the members of the World Bank (total membership of the
countries stands at 120). The IDA extends credit to developing nations on terms
that are easier and more flexible than those of the Word Bank. IDA borrowers may
repay their loans over a period of 50 years with a service charge of lessthan one per
cent instead of interest. Loans are for the purpose of stimulating investment and
economic development and,encouraging foreign trade.
The Reserve Bank of India (RHI) was established in the year 1935. The Bank was
set up to regulate issue of bank notes and keeping up resources with a view to
securing monetary stability in the country and operating the currency and credit
system to its advantage. Three departments were created to look into the credit
needs of agricultural sector. The Agricultural Credit Department (ACD) was set up
to look into the activities of rural sector: The primary functions ofACP were to
coordinate the functions ofRBI with regard to agricultural credit and other banks
and State Cooperative Banks, to maintain expert staff to study all questions of
agricultural creditand be available for consultation by Central Government, State
.Governments, Scheduled Commercial Banks and State Cooperative Banks and to
provide legislation to check private money lending and checking malpractices. Two
funds were established (i) the National Agricultural Credit (Long Term Operations)
Fund and (ii) the National Agricultural Credit (Stabilization) FUnd.
The National Agricultural Credit (Long Term operations) Fund was set up in 1955.
This Fund was meant to provide long-term loans to various State Goveinments with
a view to enabling them to contribute to the share capital of different types of
cooperative societies including Land Mortgage Banks. Loans and advances out of
this fund are made to State Governments for period not exceeding 20 years, for
purchasing debentures of State Land Development Banks and for providing funds
to-the Agricultural Refinance and Development Corporation for period not exceeding
20 years. In the creation ofthisfund, medium-term loans-are provided by the RBI
only out of this fund.
The second fund, viz., National Agricultural Credit (Stabilisation) Fund was
established in June 1956. The fund is utilized for the purpose of granting medium-
term loans to State Cooperative Banks, especially during the times of famine, drought
or other calamities, when they arc not able to repay their short-tern loans to RBI.
This fund is used for converting short term loans which are due to RBI from the
Central Cooper~tive Banks in areas affected by natural calamities. The State and
Central Cooperative Banks and Primary Agricultural Cooperative Credit Societies
in turn provide a similar facility to the farmer-borrowers regarding Sh011 term
I~
Institutional Infrastructures: .. ••
production loans taken for the crops affected by natural calamities. This makes
Public, Private and Public-
Private Partnerships
them eligible for further agricultural finance at the same time reducing their burden of
repaying the loans. .
NABARD came into existence in July 1982 to provide all types of production and
investment credit for agriculture and rural development. The national level institutions
such as Agricultural Refinance' and Development Corporation (ARDC), Agricultural
Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) ofRBI
were merged with NABARD.
NABARD was established to perform the following functions :
Check YourProgress 1
Note: a) Use the spaces given below for writing your answers.
b) .. Check your answer with those given at the end of the unit.
.
••••••••••••••••••••••••••••••••••••••••• ! ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
. '10 •••••••••••
2) Explain the micro-finance programme of the country. Agricultural Credit, Insurance,
Warehouses and Corporatio~s
•••••••••••••••••••••••••••••••••••••••••••••••••••••••• 1•••••••••••••••••••...••••••••••••••••••••••.•••••••••••
The crop insurance in the country has been managed by the General Insurance
Corporation (GIC), delivered through rural financial institutions, usually tied to crop
loans, and subsidized by the Central and State governments. The Agricultural
Insurance Company with capital participation by GIC, the four public sector general
insurance companies and NABARD has been set up. The agricultural insurance
sector has been evolving over time, through consistent monitoring and policy
interventions. Herein, let us understand the various agricultural insurance schemes,
their advantages and lacunae.
Area based crop insurance scheme was subsequently introduced from 1979 by
GIC on a pilot basis in selected areas. If the actual average yield of the crop in the
.selected area were less than the guaranteed yield ofthe crop, the indemnity would
then become payable to all the farmer borrowers.
Sum assured was 100 per cent of the crop loan but a ceiling was imposed with
regard to payment of indemnityi.e., Rs. 5000 per farmer-borrower in the case of
dryland and Rs. 10,000 per farmer-borrower in the case of irrigated areas. This
scheme was implemented by 12 states in India up to 1984. The scheme has benefited
6.271akh farmers covering 6.921akh hectares, with a mean claims topremiurn ratio
of 0.82 (Table 9.8). Seeing the success ofthe Pilot Crop Insurance Scheme.the
Government of India decided to launch a Comprehensive Crop Insurance Scheme
(CClS) during the Seventh Five Year Plan period in the. year 1985, replacing the
hitherto Piiot Crop Insurance Scheme. . 21
Institutional Infrastructures:
Public, Private and Public-
9.3.2 Comprehensive 'Crop Insurance Scheme
Private Partnerships
The Comprehensive Crop Insurance Scheme (CCIS) was a built-in crop insurance
cover to crop loanees only. The basic objectives of the CCIS are: ...
2) torestore the credit eligibility of farmers after a crop failure for the next crop
season; and
All crop loans by the commercial banks, cooperatives and the regional rural banks
. were covered by the scheme. The amount of insurance premium was included in the
scale offinance for the crop loan and the insurance charge was deducted at the time
ofloan disbursement. The scheme was operative in defined areas. The major crops
covered under this scheme were: Paddy, wheat, maize,jowar, bajra, ragi, greengram,
blackgram, red gram, Bengal gram, peas, soyabean, groundnut, mustard, sunflower,
safflowers, sesamumand castor.
The sum insured was 150 per cent of the amount of crop loan disbursed for the
eligible crops. The insurance premium was one per cent for rice, wheat and millets,
and two per cent for oilseeds and pulses. In the case of small-and marginal farmers,
the insurance premium was subsidized to the extent of 50 per cent, the su~sidy
being shared equally by the Central and State Governments.
The indemnification was on area basis with the tehsil / taluka being kept as the unit.
If there was a shortfall in actual average yield per hectare of the insured crop as a
result of crop failure, (below 50 per cent of the normal) each of the insured fahners
growing that crop in the defmed area was eligible for indemnity. The paid out claims
was Rs. 2,304 crore against a premium income ofRs. 404 crore. The claims to
premium ratio of this year worked out to 5.71 (Table 9.8). Seeing the performance
of the CClS the sum assured was reduced to 100 per cent from 1St) per cent ofthe
crop loan and its maximum limit was fixed as Rs 10,000 per farmer (revised upwards
to Rs. 25,000 per families).
Table 9.8: Progress of Crop Insurance Programmes in India
,
Period No. of Area Sum Total Claims Premium
Farmers Covered Insured Insurance Paid Ratio
Covered Per Year (Rs. crores) Collected (Rs.
(No. in (Iakh ha) Charges crores)
lakh) (Rs. Crores)
Pilot Crop Insurance Scheme
1979-80 to 1984-85 627 6.92 1.97 1.59 0.82
(\.04) (J.l5) (32.5) (26.50)
The premium rates are 3.5 per cent (of sum insured or actuarial rate which e"er is
less) for bajra & oilseed, 2.5 percent for other Kharif crops, 1.5 per cent for;wheat
and 2 percent for other Rabi crops: In the case of annual commercial/horticultural
crops, actuarial rates are being charged. A 50 per cent subsidy in the premiw'm~~
given to small and marginal farmers. Thcsubsidy is shared equallybystates/U'Is
and Central Government. .
~ . .,1 '/
The scheme is strictly' crop' income insurance and not 'farm' income insurance as it
is designed to protect the income from a particular crop. Under the FITSthe indemnity
calculation is modified to account for income shortfall, not just yield shortfall. In this
case the farmer will be paid the difference between the guaranteed income and the
actual income per hectare.
The programme paves the way for coexistence of public and private insurance agencies
working in the field of agricultural insurance. On one hand, the provision of subsidies
by the public agencies poses hindrance to the entry of private sector into the agriculture
insurance business. On the other hand, the poor coverage by the public agencies
and their lack of incentive to extend the coverage serves as sufficient bait for the
private sector.
Note: a) Use the spaces given below for writing your answers.
b) Check your answer with those given at the end of the unit.
............................................................................................................ ; .....
2) Financing: Warehouses meet the financial needs of the person who stores the.
product. Nationalized banks advance credit on the security of the warehouse
receipt issued for-the stored products to the extent of7 5 to 80 per cent of their
value.
25
Institutional Infrastructures: 3) Price Stabilization: Warehouses help in price stabilization of agricultural
Public, Private and Public-
commodities by preventing the post harvest sale by the fanners when the prices
Private Partnerships
are low because of the glut in the market. They also help-in stabilization of
agricultural prices by staggering the supplies.
• plan and promote programmes through cooperative societies for the supply of
inputs for the development of agriculture; and
In March 1963, the Board was converted into the National Cooperative Development
Corporation (NCDC), and its functions were limited to cooperative development.
ii) To run warehouses for the storage of agricultural produce, seeds, fertilizers
and certified commodities for individuals, cooperatives and other institutions.
ill) To act as an agent of the government for the purchase, sale, storage and
distributions of the above commodities.
Year Commodities
Source: Food Corporation of lndia, New Delhi and Ministry of Food, Government of India,
New Delhi.
28
9.4.5 Cooperative Sector . Agricultural Credit, Insurance,
Warehouses and Corporations
The Cooperative sector has also built a storage capacity of 13.55 million tonnes up
to March 1996. The Cooperatives have also constructed 175 cold storage
warehouses with a total capacity of2.141akh tonnes. The National Cooperative
Development Corporation had helped in constructing 54898 rural godowns and
9363 marketing godowns by the end of March 1996. These Cooperative godowns
are used by the Food Corporation of India in times of need, and provide a readily
available cushion when the procurement of foodgrains is at peak.
5) Helping the farmers in getting loans against the stored products; and
- .--
Year Number of'Cotd-Storage Storage Capacity
Units in Operation (Lakh tonnes)
Source: (i)Economic Survey: Various Issues. Ministry 0/ Finance, Government of India, New Delhi.
(2) Directorate 0/ Marketing and Inspection. '~igUSlry0/ 'Agriculture and Rural Development, Government
of India, Faridabad. (3) Rajyasabha Unstarred Question No. 749, dated 20. 08.20m.
JU
Agricultural Credit, Insurance,
Check Your Progress 3 Warehouses and Corporations
Note: a) Use the spaces given below for writing your answer.
b) Check your answer with the given at the end of the unit.
..................................................................................... , , .
Reddy, S.S. & P.R. Ram (1996). Agricultural Finance and Management. Oxford
& IBH Publishing Co. Pvt. Ltd., New Delhi.
9.7 'ANSWERSIHINTSTOCHECKYOUR
PROGRESS
Check Your Progress 1
1) The cooperative credit is mainly of two types one providing short term
loans and the other providing the long term loans. For details go through
Section 9.2.
2) Farm income insurance refers to covering total income of the fanner obtainable
from the farm as against this the crop insurance refers to protecting the income
of the fanners as a result of specific crop loss. For further details go through
Section 9.3.
33
UNIT 10 PUBLIC DISTRIBUTION
SYSTEM
Structure
10.0 Objectives
10.1 Introduction
10.5 Quantity of Food grains Issued under Targeted Public Distribution System
(TPDS)
10.6 Implementation Related Shortcomings ofTPDS
10.7 Measures Taken to Strengthen TPDS and Check Diversion of Food grains
10.8 LetUsSumUp
10.0 OBJECTIVES
After going through this unit, you should be in a position to:
• define the Public Distribution System (PDS) and discuss how an efficient PDS
ensures food security;
10.1 INTRODUCTION
India's, food security policy has an important objective to ensure availability of
foodgrains to common and poor people at an affordable price. The policy has been
successful in the sense that foodgrains have been made available to the poor .
consumers living in remote and inaccessible areas. The efficient Public Distribution
System (PDS) introduced in the country has ensured the food securityand nutritional
requirements of the people. The PDS was introduced by the Government of India .
with the assistance of State Governments asa system of management of scarcity
and for"distribution of foodgrains and other items at cheaper prices to a large number
of population living in the different parts of the country.
34
Over the years, PDS has become important part of Government of India's food Public Distribution System
policy and economy. It is important to clarify that PDS is only supplemental in nature
and is not intended to provide the entire requirements of foodgrains or other
commodities distributed under this programme to a household or a section of society.
As mentioned above, PDS is operated jointly by the Central Govenunent and State
Governments. The Central Government, through its nodal agency, the Food
Corporation of India, established under Act of Parliament in 1965, has assumed the
responsibility of'procurement, storage and transportation of foodgrains to the State
Governments. The operational responsibility of Central Government includes
allocation of monthly quota of foodgrains to the State Governments and issue of the
same to the States' Food Supply Departments. On the other hand, lifting of foodgrains
from FCI's godowns, distribution tu Fair Price Shops (PPS) and further distribution
of foodgrains through FPS to consumers is the responsibility of the State Governments.
In addition to this, identification of families below poverty line and very poor families,
issue of ration cards to different categories of beneficiaries and supervision and
monitoring the function of fair price shops is also being done by the State
Governments. Under the Public Distribution System, this has now been designated
as Targeted Public Distribution System (TPDS), the commodities viz., wheat, rice,
sugar and kerosene are being allocated to the State GovernmentslUnion Territories
for distribution. Some of the State Governments and Union Territories also distribute
salt and match boxes etc., under TPDS.
Up to 1992, Public Distribution System (PDS) was a general scheme for all consumers
without any specific target. However, in June, 1992, Revamped Public Distribution
System (RPDS) was launched in 1775 blocks of the country. From June, 1997, the
Targeted Public Distribution System (TPDS) was introduced with a view to serve
the population below poverty line living in rural and urban areas. The consumers
were divided in two categories below poverty line and above poverty line based on
certain norms prescribed by the Planning Commission.
The RPDS was launched to strengthen and streamline the PDS as well as to make
available foodgrains to consumers living in far-flung, hilly, remote and inaccessible
areas. The areas where Drought Prone Area Programme (DPAP), Integrated Tribal
Development Project (ITDP) and Desert Development Programme were running
were included in revamped PDS. The prices of foodgrains in RPDS were kept Rs.
50 paise per kg below the Central Issue Price(CIP) and foodgrains up to 20 kgs
per month per ration card were issued.
35
Institutional Infrastructures: In June, 1997, the Government ofIndia decided to focus on the poor of the
Public, Private and Public-
Private Partnerships
country and they were supposed to be the main target for making available
foodgrains at cheaper prices. Therefore, the scheme was named as Targeted
Public Distribution System (TPDS). Under this programme, the States were
required to identify the below poverty line population and make foolproof
arrangement for distribution of foodgrains to them through fair price shops at
affordable cheaper prices.
Initially, the scheme was formulated for the benefit of about 6 crores ~00r family
for whom a quantity of 72 lakh metric tonnes of foodgrains was allocated
annually. The identification ofBPL population was done by the State Governments
as per the State-wise poverty estimate of the Planning Commission for 1993-94
based on the methodology of the "Expert Group on Estimation of Proportion and
Number of Poor" headed by Late Prof. Lakdawala. The allocation offoodgrains
to the State Governments/UTs was made on the basis of average consumption in
the past, i.e., average annual offtake offoodgrains under the PDS during the past
10 years at the time of introduction ofTPDS.
In addition to this, transitory allocation to the tune of 103 lakh metric tonne
annually was also made to States for distribution of foodgrains at subsidized
prices to the Above Poverty Line (APL) population as it was considered that this
segment of population should not be suddenly deprived from cheaper foodgrains
being distributed through fair price shops by the State Governments.
Later on, it was requested by the State Governments that allocation of foodgrains
to Below Poverty Line (BPL) families should be increased. Therefore, the
Government of India increased the allocation to BPL families from 10 kg to 20 kg
of foodgrains per family per month at 50 per cent of the economic cost. The
allocation to APL families was made at economic cost with effect from 1st April,
2000. The quantity of allocation to APL family was retained at the same level as
at the time of introduction ofTPDS.
The number ofBPL families has been increased with effect from 1st December,
2000 by shifting the base to the population projections of the Registrar General
as on 1st March, 2000 instead of the earlier population projection of 1995.
With this increase, the total number of 13PL families are .652.03 lakh as
against 596.23 lakh families originally estimated when TPDS was introduced
1997.
Under these PDS schemes, the end retail price is fixed by the State Governmentsl
UTs after taking into considerationthe margins of wholesalers/retailers,transportation
charges, levies, local taxes, etc.
Under the TPDS, the States are requested to issue foodgrains at a difference of
not more than 50 paise per kg over and above the CIP for BPL families. Flexibilities
..::,lteGovernmentslUTs have been given in the matter of fixing the retail prices
h· •.
by removing the restrictions of 50 paise per kg over and above the CIP for
distribution of foodgrains under TPDS, except with respect to Antyodaya Anna
Yojana where the end retail prices is to be retained at Rs.2/- per kg for wheat
and at Rs.3/- per kg for rice.
36
Public Distribution System
10.3 CENTRAL ISSUE PRICES FOR RICE AND
WHEAT
Wheat and rice are issued by the Central Government from its Central Pool Stock
to State Governments/U'Is at uniform Central Issue Price (CIP) for TPDS. The
CIPs offoodgrains for TPDS are generally fixed below the economic cost. The
Central Government incurs a huge expenditure in the form of food subsidy on this
account. It is important to mention that as a social obligation the foodgrains are
supplied to Below Poverty Line (BPL) families and Antyodaya Anna Yojana
beneficiaries at highly subsidized rates.
After streamlining and restructuring the Public Distribution System (PDS) with focus
on poor (Targetted PDS), two different CIPs.have been fixed, one for the BPL
families and another for the APL families.
The CIPs of Rice and wheat issued under TPDS for various categories of
beneficiaries are given in Tables 10.1 and 10.2.
Table 10.1: Central Issue Prices of Common and Grade 'A' Rice for TPDS
The CIP of common rice to APL families is applicable to J&K., H.P., North Eastern
States, Sikkim and Uttaranchal. From the Table 10.1, it is known that the CIPs of
common and Grade' A' rice for BPL families are much less than that for the APL
families. From the year 2000 till date, there is not much change in the CIP of common
rice and the price hag sUrdy been reducec:..
37
Institutional Infrastructures:
Table 10.2: Central Issue Price of Wheat
Public, Private and Public-
Private Partnerships (Rs. perquintal)
From the Table of CIP of wheat,it is clear that price for BPL families are much less
- than the price for APL families. Further, the BPL price of wheat has not been increased
from the year 2000 to till date.
"Note: a) Use the spaces given below for writing your answers.
b) Check your answer with those given at the end of the unit.
1) . What are the main aims and objectives of food policy of India?
.- .
~8
3) What are the central issue prices of wheat and rice for BPL families? Public Distribution System
ANational Sample Survey (NSS) pointed out that about 5 per cent of the total
population in the country is not able to get two square meals a day. It was felt that a
scheme for the most destitute population to make available foodgrains at highly
subsidized rate is needed and, therefore, a new scheme known as AntyodayaAnna
Yojana (AAY) was launched in December, 2000 for one crore poorest ofthe poor
families of the country.
It was planned that about one crore people who are poorest among the below
poverty line (BPL) families covered under TPDS within the states should be identified
and foodgrains at highly subsidized rate should be supplied to them through Fair
Price Shops.
Under this scheme, wheat and rice was made available to these people at highly.
subsidized rate of Rs. 2/- per kg and Rs. 3/- per kg respectively. The State
Governments and UTs were requested to bear the distribution cost including the
margin ofF air Price Shops dealers as well as the transportation cost. Initially, 25 kgs
foodgrains per family per month was issued, which was increased to 35 kg w.e.f.
1st April, 2002.
Initially, the Antyodaya families were provided 25 kg of foodgrains per family per.
month at the time oflaunching of the scheme. The quantity of the foodgrains issued
under APL, BPL and AAY has been increased upto 35 kg per month per family
w.e.f. 1st April, 2002 with a view to enhance the food security at the household level
and to increase the nutritional requirement. It is important to mention here that
59 per cent of calories (in terms of kilo calories per day per person), 58 per cent of
total protein and 13 per cent of total fat are derived from cereals intake.
I
• Achievements of TPDS
After June, 1997, the PDS has now become a major food security scheme for the
poor families living in different parts of the country, particularly in remote hilly rural
areas.
i) The TPDS scheme fulfills about 50 per cent of the cereals requirement of the
poor family every month.
ii) The offtake offoodgrains under BPL scheme has considerably increased and
during 2003-04, it was 1991akh metric tonnes which is about 83 per cent of
the total PDS offtake.
ill) The Central Issue Prices (CIPs) of foodgrains for BPL and Antyodaya families
have not been increased much since the year 2000.
iv) The total offtake offoodgrains under TPDS was around 2391akh metric
tonne in 2003-04, which is the highest level achieved so far.
v) The CIf>for AAY category is kept lowest, i.e. Rs.2/- per kg for wheat
an.l r~<. 3/- per kg for rice. This is much below the economic cost of these
40 grams.
• Allocation and OffTake of Food grains underTPDS Public Distribution System
The details of allocation made under TPDS and off take of food grains are as
under:
\ Table 10.3: Allocation made underTPDS, OffTake and Percentage Off Take
(LakhMTs)
,
Year Total TPDS \
Total TPDS Percentage
, Allocation Off Take Off Take
..
1997-98 180.88 l31.53 72.72
There has been large number of complaints that the identification of BPL
beneficiaries was not correct and many eligible families have been left out ortne
BPL purview. There was a pre-condition of possession of the BPL card' for
identification under Antodaya Anna Yojana and a large number of very poor
people coming in the category of AAY who were not having BPL cards could,not
get the AAY cards. Requirement of permanent address and delay in verification
of antecedents made it very difficult for home less and urban destitute to get a
BPL I AAY ration cards.
41
Institutional Infrastructures: • Non Issue of Ration Cards
Public, Private and Public-
Private Partnerships In some of the States I UTs like Goa, Himachal Pradesh, Manipur, Rajasthan, A&N
ISlands, Chandigarh, Dadra& Nagar Haveli and Lakshdweep, the identification of
BPL and AAY families have not been completed and ration cards to all beneficiaries
have not been issued.
Due to shortage of resources, some of the states as well as FPSs dealers are not
able to lift the adequate quantity of foodgrains as a result the beneficiaries/consumers
particularly in the rural areas are not able to get their foodgrains from FPSs. There
are also reports that some quantity of foodgrains meant for TPDS and other welfare
schemes are diverted to open market. This needs to be checked by the State
Governments.
1) Citizen Charter
This charter contains, inter alia, the basic relevant information for the consumers
and a model procedure and time schedule for various services to be provided by the
State ICentral Governments.
Under the guidelines for implementation of the TPDS, the State Governments are
supposed to involve Gram Panchayats and Gram Sabha in the identification ofBPL,
AAY families.
From February, 2000 the Department of Food and Public Distribution, Ministry of
Consumer Affairs, Food & Public Distribution had appointed Area Officers for
different States/U'Is to coordinate with the State Governments for regular and effecti ve
monitoring ofTPDS. The observations/discrepancies reported by these Area Officers
are communicated to the State Governments for taking remedial measures. .
Task Force team with senior officers of the Department of Food & PublicDistribution,
FCI and Central Warehousing Corporation (CWC) had been constituted to check
irregularities, if any, in the distribution of foodgrains under TPDS and AAY
Officers of the Quality Control Cell of the Department of Food & Public Distribution
aswell as State Government officers regularly inspect the Fair Price Shops and
42
collect the samples of foodgrains for analysis purposes. Incidences of supply of Public Distribution System
poor quality of foodgrains are brought to the notice of concerned Organisation for.
taking remedial measures. Sealed samples of foodgrains issued from FCI or State
Governments' depots are displayed on the fair price shops for the benefit of
consumers.
Note: a) Use the spaces given below for writing your answers.
b) Check your answer with those given at the end of the unit.
........................................................................................ :- .
2) What are the issue prices of wheat and rice under AntyodayaAnna Yojana?
.................................................... ; .
......................•............................................................................................ . .
..................................................................................................................
. .
•••••••••••••••••••••••••••••••••••••••••••••••• ""."." ~ •• ·o •• 0 o •• 0.0 ••••••• 0 •••••• o ••• 0.' ••••••••••••••• o •••••••••••••• " ••••••••••••••••••••
...................................................................................................................
. .
...................................................................................................................
....................................................................................................................
It was felt that the benefit ofTPDS is not reaching to the poorest and destitute
people of the country and a scheme for making available foodgrains at highly
subsidized rate to these people was needed. Therefore, a new scheme in addition to
TPDS, known as, AntyodayaAnna Yojana was launched in December, 2000 for
One crore poorest of the poor families of the country.
The scheme has been expanded 3 times and now about 2.5 crores people are
covered under this scheme. The Central Issue Prices on which the foodgrains
under various public distribution schemes are issued are fixed by the Government
of India and these prices are much below than the economic cost of the
foodgrains. Under AntyodayaAnna Yojana, wheat at the rate ofRs.2/- per kg and
rice at Rs.3/- per kg in the scale of35 kg foodgrains per month per family are
issued.
10.9 KEYWORDS
Allocation The quantity of foodgrains (quota) which is issued
to the state Governments' .
'1) The main aim and objectives of the food policy of the Government of India are
I
3) The Central Issue Price of wheat and rice for BPL families are Rs.4 .15 per kg
aad Rs.5.65 per kg, respectively.
1) The AntyodayaAnna Yojana is meant for poorest among poor (BPL) families
wherein wheat and rice are supplied at highly subsidized rates.
2) The issue prices of wheat and rice under AntyodayaAnna Yojana are Rs.2
and Rs.3per kg, respectively.
3) About 2.5 crores families are covered under Antyodaya Anna Yojana.
4) The important shortcomings ofTPDS are that most of the poor people have
not been issued proper ration cards to get the benefit of subsidized foodgrains
being issued under these schemes. Besides, some quantity of the TPDS appears
to be diverted to open market.
45
UNIT 11 COOPERATIVES, FARMERS
ORGANIZATION AND NON-
GOVERNMENT OT:lGANIZATIONS
Structure
11.0 Objectives
11.1 Introduction
11.2 Cooperatives
11.2.1 Benefits of Cooperative Movement
11.2.2 Cooperati ve Marketing
11.2.3 Cooperative Processing
11.5 LetUsSumUp
11.0 OBJECTIVES
After going through this unit, you will be able to:
11.2 COOPERATIVES
Cooperatives started as a defensive mechanism against moneylenders, and received
considerable emphasis as an instrument .of economic development of the
disadvantaged particularly in the rural areas that embraced a large gamut of activities
to serve the interests of the producers and consumers. "The non-exploitative character
of cooperatives, voluntary nature of the membership, the principle of ' one man one
vote', decentralized decision making and self-imposed curbs on profits eminently
qualified them as an instrument of development combining the advantages of private
ownership with public good".
i) Supply of Cheap Credit: The movement has freed the cultivators from the
clutches of the money lenders. The interest rate charged by private agencies
has fallen owing to competition offered by ~thecooperatives.
ii) Spread of Banking Habits: With the establishment of the cooperative banks
with network of branches in rural areas. have induced a sense of banking habit
among people of small means.
On the basis of the commodities dealt in by them, the cooperative marketing societies
may be grouped into the following types:
They deal in the marketing of only one agricultural commodity. They get sufficient
business from the farmers producing that single commodity. The examples are
Sugarcane Cooperative Marketing Society, Cotton Cooperative Marketing
Society and Oilseed Growers Cooperative Marketing Society.
These societies market a large number of commodities and perform such other
functions as providing creditto members, arranging for the supply of the inputs
required by them, and meeting their requirements of essential domestic
consumption goods.
48
• Structure of Cooperative Marketing Societies Cooperatives, Farmers
Organization and Non-
The cooperative marketing societies have both two-tier and three-tier structure. In Government Organizations
1) Base Level: At the base level, there are primary cooperative marketing
societies. These societies market the produce of the farmer members in that
area. They may be single commodity or multi-commodity societies, depending
upon the production of the crops in the area. They are located in the primary
wholesale market, and their field of operations extends to the area from which
the produce comes for sale, which may cover one or two Tehsils, Panchayat
Samitis or development blocks.
3) State Level: At the state level, there are apex (State) cooperative marketing
societies. These state level institutions serve the state as a whole. Their members
are both the primary cooperative marketing societies and the central cooperative
unions-of the state. The basic functions of these societies is to co-ordinate the
activities ofthe affiliated societies and conduct such activities as inter-state
traae, export-import, procurement, distribution of inputs and essential consumer
goods, dissemination of market information and rendering expert advice.
In India, the work o~ processing is done largely by the middlemen for want of
adequate cooperative processing facilities. The result is that the producers are at
loss to enjoy the benefits of processing as there is a wide price spread between the
producer and consumer as a good chunk of the ultimate price mid by the consumer
goes to these middlemen. 49
Institutional Infrastructures: • Need and Importance of Cooperative Processing
Public, Private and Public-
Private Partnerships Cooperative processing is essential for the development of cooperative marketing,
and consumer cooperative. Well-established cooperative processing units can •
effectively undertake to recover the loans paid by cooperative credit societies 'for
agricultural production provided they are also linked with credit societies. Cooperative
~rocessing, besides strengthening the functions of agricultural credit and marketing
system, provide a wide base and become focal point for development of agro-
industrial complexes in the rural areas.
The pattern of organization differs in different cases. In some cases, the cooperatives
engaged in marketing agricultural produce themselves take the processing work. In
others, separate societies of agricultural producers are organized for processing. In
large units, independent processing units are organized. In smaller units, not needing
substantial capital outlay, processing is undertaken by the cooperative marketing
societies.
various aspects of raising sugarcane crop. Such facilities create a spirit ofloyalty
among members and ensure successful working of the societies.
The State and the Central Government also provide necessary facilities for the
development of cooperative processing. The state governments directly participate
in the share capital of the processing units; guaranties to the financing agencies for
giving loans to cooperative processing units and give them preference in licensing
and provides technical guidance.
• to act as an agent of the government for the purchase, sale, storage and
distribution of agricultural products an<iinputs.
It was established in 1973 with a prime aim of planning and promoting programmes
for production, processing and marketing of agricultural produce through cooperative
societies. The corporation supports various marketing programmes for which financial
assistance comes from the respective state governments. Cooperative marketing
and processing activities are being developed under the supervision ofNCDC with
a provision of requisite financial assistance and expertise and training. NCDC is
now extending its activities to various areas of cooperative dairies, fisheries, minor
forest produce, etc., which are basically aimed ateconomic development of the
rural poor. Since its inception i.e., from 1963 up to 1996, it has provided financial
assistance to the tune ofRs 2,800 crore besides striving hard for the development of
cooperative marketing, storage, processing and distribution of consumer goods viz.,
foodgrains, sugar, edible oils, kerosene, salt, soft drinks, etc., through service
cooperatives.
• OtherOrganizations
Note: a) Use the spaces given below for writing your answers.
b) Check your answer with those given at the end of the unit.
51
Institutional Infrastructures: 3) What are the various national level cooperative institutions?
Public, Private and Public-
Private Partnerships
The Common Property Land Resources (CPLR) provide livelihood support to the
rural poor, apart from performing several useful ecological functions. Reduction in
CPLRs is observed due to breaking down of institutional arrangements. The use of
CPLR under traditional institutional arrangements was regulated through the
measures like grazing tax, livestock lives payable during ceremonies, and penalties
for unauthorized use. It is now being felt that in order to regenerate the degraded
52
CPLRs the resources have to be put W1dercommunity'scontrol and by reducing the Cooperatives, Farmers
Organization and Non-
role ofthe formal institutions. The productivity of CPLRs has improved in several Government Organizations
parts of the COW1trythrough innovative experiments undertaken by the non-
governmental organizations (NGO), Tree Growers Cooperative Societies (TGCS)
and other organizations (Singh 1994). For example, regulated access to the fodder
and fuel biomass under the joint management of CPLRs has successfully created
participatory management institutions, facilitating equitable distribution of permanent
assets and more activities for women to enhance their socio-economic status.
D Providing legal identity and status to JFM committees including their registration
under the Societies Registration Act 1860, to equip and strengthen them to
adapt to the increasingly formalized and commercialized enviromnent (including
formal credit market), and to protect them against the whims of forest officials
prone to misuse their discretionary powers.
ii) More powers and decision-making role to JFM conunittee as a step towards
greater decentralized and devolution, an issue frequently raised by both
supporters and critics of JFM movement though in different contexts.
More explicit and equitable sharing mechanism to ensure benefits of JFM to tribal,
landless labourers (particularly women) who have been deprived of their traditional
earnings options following the induction of JFM in many areas.
Various farmers and other organizations dealing with management and development
of water resources are discussed herewith.
Rainwater harvesting can meet people's basic water needs as well as improve food
and livelihood security. The community participation is essential for the transformation
process from a state of ecological poverty to a state of sustainable economic growth.
The success stories ofSukhomajri, Ralegaon Siddhi and TarW1Bharat Sangh revealed
that village-level organizations played a crucial role in developing institutional
arrangements and enforcing them for equitable distri hution and sustainable use of
53
Institutional Infrastructures: water resources. Thus to manage Common Property Resources (CPR) it is imperative
Public, Private and Public-
Private Partnerships
to design integrated village ecosystem with high order of democracy in decision
making, create appropriate conununity-based property rights, provide fmancial grants
to village institutions and induce village institutions to raise fund by organizing the
CPRs.
Many success stories of irrigation cooperative societies and Water User Associations
(WUA) working in the command area of river basins have been observed. The
State Department of Irrigation facilitates the formation of cooperatives at the outlet
level and still maintaining the main water courses in the command areas of the rivers
ofTapti, Vkaikakrapur, Mala, Thindal and Paliganj distributaries ofTamil Nadu and
Mahanadi ofBihar. However, designing and enforcing the internal institutional
arrangements by the members of the societies for equitable and efficient water
distribution, recovery of irrigation fee and maintenance and repairs are pre-requisites
for successful management of canal irrigation system beyond outlets.
• Irrigation Tank
For several centuries, tanks have been central to irrigated agriculture in the states of
Andhra Pradesh, Karnataka, Tamil Nadu and Chhatisgarh. Tanks are, however,
disappearing fast because of decades of siltation, poor organization and management,
decline ofcompulsory labour contribution (Kudimaramat) for the maintenance work,
inadequate operation and maintenance budget from government, meager revenue
from tank-based activities (social forestry, fisheries, duck and goat rearing, grazing
leases), poor collection of irrigation fee and growth of wells in tank command area.
Most of the tanks in Tamil Nadu and elsewhere have degraded into open access
due to weak institutional arrangements, property rights and breakdown oflocal
authority system. Three strategic elements are essential for rehabilitation of irrigation
tartks. Firstly, creation of a WU A at the tank level with strong common property
interests in the conservation of irrigation tank with clarity of management rights,
responsibilities and rewards. Secondly, creation of new sources of resource generation
for sustained investment in maintenance and repair of the tank complex through
giving the rights to WUA over plantations in water-spread area and tank bunds.
And third, creation of upper tier organization as co-ordinating structure which can
lobby with government agencies for resources and favourable policies.
Groundwater accounts for over half of the total irrigated area in India. The expansion
of groundwater irrigation was largely due to improved drilling and lifting technologies,
lower per unit cost of water pumping, massive rural electricity programmes, liberal
credit for exploring groundwater and subsidized supply of electricity. The productivity
. of irrigation in conjunction with chemical fertilizers and high-yielding varieties (HYV)
is much higher for groundwater as compared to canal, mainly due to wastage of
water and flexibility to adjust the timeliness and quantity of water distribution to
crops. Until recently, the government policies of supporting and promoting private
ground water development were widely acclaimed time and again. However, there
is now a growing concern that the existing policies, if continued, may lead to over-
exploitation of groundwater, particularly in the arid, semi-arid and hard rock regions
of peninsular India. Further, under the private property regime, water markets have
54
emerged in many parts of the country. The individual farmers are more concemwith
their private gains and costs, while completely ignoring the social cost of over- Cooperatives, Farmers
Organization and Non-
exploitation of ground water resources. Efficient, equitable and sustainable use of Government Organizations
.groundwater can be achieved through developing institutional arrangements like rights
over water, land tenure, users' relationship, and financial incentives etc.
Social Organisation
The aim of social organization is to develop community organizations through which
members of communities can articulate their needs, participate in planning,
implementation and evaluation of projects, and to develop the necessary institutions
to take up collective activities such as village pasture development. They establish
what are usually referred to as watershed committees for implementing the projects. 55
Institutional Infrastructures: Several projects, including some that employ NGOs, use selected community
Public, Private and Public-
members to assist in social organization. These selected members are designated as
Private Partnerships
kisanmitra or friendly fanners who are given training on technologies promoted through
the project. The kisanmitra are held responsible for insuring participation of other
members of their communities.
Watershed program has been reported as one of the most important strategies to
bring socio-economic change in the rainfed system. In some of the regions, it has
silently revolutionized the agriculture and allied sector through various technological
interventions, particularly soil and water conservation and crop diversification.
However, lack of appropriate institutional arrangement is the major obstacle in
attaining potential benefits of watershed programs. The benefits of watershed
programs have been more where people's participation was higher. It has been
found that people's participation is important not only during the phase of
implementation of watershed development activities but also beyond the actual
investment phase. It has been argued that earnest efforts to enthuse stakeholders for
their voluntary participation would sustain watershed development and bring
prosperity in the rainfed areas.
11.3.7 Extension
There is an increasing realization that "public extension by itself cannot meet the
specific needs of various regions and different classes of farmers. Policy environment
would promote private and community-driven extension to operate competitively in
roles that complement, supplement, work in partnership and even substitute for
public extension" (DAC 2000).
Different approaches are also being tried in several project-specific districts. The
most ambitious among them is the Agricultural Technology Management
Agency (ATMA) model. The project envisages testing of several new institutional
arrangements such as creation of ATMA, a registered society at the district level for
integrating the activities of all organizations involved in the transfer of technology,
decentralization of decision making at the district level, an increase in farmers
participation in planning and implementation of extension interventions. The program
is based on the Strategic Research and Extension Plan (SREP) developed through
a participatory approach.
In Uttar Pradesh, two major programmes are presently under implementation, namely
the Uttar Pradesh Sodic Land Reclamation Project (upSLRP) and the Uttar Pradesh
DiversifiedAgricultural Support Project (OPDASP). Both these programs are funded
by the World Bank and have a separate component for technology dissemination.
Under UPSLR, the system of farmer-led extension approach is being tried (kisan .
mitra, majhliakisanrnitra, group leaders, master trainers, etc.). Commodity-based
Farmer Interest Groups (FIGs) are formed, and the field activities are implemented
through user groups. The programme is being implemented by the Uttar Pradesh
Bhoomi Sudhar Nigam, a government undertaking set up for this project. UPDASP
envisages capacity building of the line department functionaries, decentralization of
the technical and managerial decision making (SREP,PRA, ATMA, etc), increasing
the role of the private sector, enhancing the participation of farming community, self-
help groups (SHG) and Farmers Interest Groups (FIG), etc., and support for Human
Resource Development and enhanced communication capacity. Interventions for
agricultural development under this project are implemented by the field functionaries
of Do A.
The private sector has also been exhibiting a lot of diverse approaches in agricultural
extension. The prominent ones include the activities of the farmers associations (e.g.,
Grape Growers Association ofMaharashtra); producers cooperatives (e.g., Kerala
Cooperative Milk Marketing Federation, sugar cooperatives in Maharashtra);
NGOs(BAIF); input industries (fertilizer and seed companies); agro-processors
through contract farming (Pepsico and Hindustan Lever in Punjab, VST Natural
Products inAndhra Pradesh); mass media (ETV inAndhra Pradesh and Maharashtra,
news papers and magazines in Kerala) and individual consultants and consultancy
fums.
11.3.10 Microfinance/SHGs
The failure of formal financial institutions to serve the rural poor effectively led to a
review and a look at the informal financial systems and lending groups. This led to
the development of informal financial groups. In India, a number of efforts have
been made to link formal and informal fmancial systems. In April 1996, RBI advised
the bankers that lending to the SHGs should be considered as an additional segment
under priority sector advances and integrates with mainstream credit operation. The
SHGs have thus become a regular component of the Indian financial system since
1996. The SHGs are small, informal and homogeneous groups of not more than 20
members each. These groups are expected to foster true (direct) democratic culture
where all the members participate actively by taking part in the debate and decision
making process which is possible only in small groups. These groups are considered
to improve the repayment, reduce transactions cost and improve the access to credit
for the people of small means.
National Bank for Agriculture and Rural Development (NABARD) would provide
financial support for the first three years and for the next two years the bank
sponsoring the club may provide the support, if necessary. The club is expected to
attain self sustainability in a period of3-5 years.
Any bank operating in rural area, including Commercial Banks (CB), Regional Rural
Banks (RRB), & Cooperative Banks (SCB, SCARDB, PCARDB, DC CB and
58
PACS) can sponsor and organize Farmers Clubs. They can hire services ofNGOs/ Cooperatives, Farmers
Organization and Non-
KVKs /Agriculture Universities, if required, for promotion of the clubs. All the clubs Government Organizations
should haveseving Dank accounts with the bank.
• 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,
Note: a) Use the spaces given below for writing your answers.
b) Check your answer with those given at the end of the unit.
1) State the role of farmers organizations in the micro finance programme of the
country?
............................•.....................................................................................
...................................................................................................................
59
Institutional Infrastructures:
Public, Private and Public- 11.4 NON-GOVERNMENTAL ORGANISATIONS
Private Partnerships
(NGO)
Many scholars have debated the role and relevance ofNGOs in a developing country
like India. It is fairly well recognized that the state cannot succeed completely in
alleviating the status of disadvantaged groups. In fact, even when the state assumed
almost total control over the economy during the planning era, it could not effectively
deal with poverty and unemployment problems. Social problems and tensions also
could not be resolved to anyone's complete satisfaction. Since 1991, the country
has made a major decision to shift to market-derived growth and development. The
shift mayor may not help the poorest of the poor in the society. There are problems
such as lack of purchasing power, lack of opportunities to improve purchasing power,
lack of requisite skills to utilise opportunities that may become available as a result
of the operation of market forces and lack of proper educational facilities in remote
rural areas, where most of the poor live, to acquire changing skills required in the
market.
The philosophy of the market economy basically gives rise to the top-down approach.
For instance, some people argue that the major problem with the people in resource
poor regions is that they have no skills or access to new production technologies.
Their recommendation is for improving the skills. The grass roots assessment may
reveal that the critical issue is the control over natural resources. It is here that
NGOs have a crucial role. NGO initiatives in the area of awareness, mass mobilisation
and organisation around critical issues are likely to lead towards better problem
identification and solutions that involve the active participation of the local population.
Such initiatives are likely to make a desirable impact on policy formulation and
problem designs. This must be followed by a professional approach to implementation,
which would ensure quality delivery. It has already been argued that the state and
the bureaucracy by their nature are not able to design and deliver for the
disadvantaged sections of the population. Hence, the state should give recognition
and encouragement to NGO initiatives.
NGOs vary in munerous ways including their (1) composition, (2) size, (3) mission
or purpose, (4) sources of funding, (5) histories, (5) whether or not they focus on a
particular arena such as agriculture or craft production, (6) whether they provide
innovative models in "technology, research methods, or institutional arrangements"
which can potentially be scaled up, and (7) their manner of day-to-day functioning,
including decision-making.
Most NGOs see their main functions as offering help in one form or another.
Now-a-days, many are involved in trying to provide loan schemes for self-
employment, medical services, funding for smaller NGOs, etc. However, there
are other ways of looking at NGO organizations and how they function.
• Source of Funding
Some small NGOs work only with volunteers, use participant donated space and
equipment and do not need (or sometimes want) any funding for their activities.
However, most NGOs, whether in a developed or developing country, need to
raise funds for their very existence (to pay full-time staff, for rent, etc), and for
projects or activities. Some try to manage with very limited funding, but most require
60
some degree of outside funding. The NGOs can be classified based the source of Cooperatives. Farmers
Organization and Non-
funding in the following ways:
Government Organizations
1) NGOs receiving foreign funds from the developed world, including bilateral
funds, international agencies, NGOs in the developed world such as OXFAM,
or various church groups, marketing organisations such as Pueblo to People;
or from individuals, foundations, special funds, etc;
2) NGOs only or also receiving partial funding from their respective national .
governments;
3) In the case of South Asia, NGOs receiving funds from state governments or
even local district governments; and
4) NGOs using only or primarily funds raised through group members' donations
or small monthly fees, etc.
• "Financial Sustainability
The NGO schemes, on the other hand, charge interest rates that are 10-20 per cent
above.the inflation rate and achieve repayment rates in excess of95 per cent and as
high as an average of98 per cent over the years. With respect to the criteria of
financial sustainability then, the NGO-supported group-based institutions far
outperform the traditional rural banking approach. With respect to overall indicators
of financial sustainability, these Micro Finance Institutions are, without any doubt,
among the most advanced and efficient worldwide.
NGOs have close contact with farming community and are well aware of their
problems. In the recent times, some ~~GOs have entered into marketing of farm
produce, especialfy organic food. The Eco-net, an NGO in Kamataka, is directly
involved in the marketing of organically produced foodgrains, fruits and vegetables.
61
Institutional Infrastructures: NGOs can be encouraged in other states to help the farmers in marketing their
Public, Private and Public-
Private Partnerships
produce in a better way.
NGOs can play a great role in transfer of technology to farmers due to the good
rapport they have with them. Rajasthan has been encouraging NGOs to participate
in the extension activities and has contracted out some extension activities to NGOs,
including transfer of entire extension responsibility to NGOs in a few blocks/districts.
Note: a) Use the spaces given below for writing your answers.
b)· Check your answer with those given at the end of the unit.
.............................................................................................................. ;-;-;-.
Farmers association is an important institution that has been active in managing the
resources from time immemorial. Tli.e decline in the role of these institutions led to
the deterioration of common property resources. This fact has been realized oflate
and there is now increasing concern to strengthen the farmers institutions and to
provide them with wider powers.
The NGOs are playing a great role in mobilizing the people into.taking action. There
rapport with the rural community is being used to serve as an agent for mobilizing
the rural inhabitants, forming SHGs/WUAs in many of the watershed prograrnmes.
62
Their role is also recognized in forming/training the SBGs for widespread development Cooperatives, Farmers
Organization and Non-
of the microfinance programme in the country. Government Organizations
With the changing role of the government to that of facilitator of development greater
hope is laid on the cooperatives, the farmers organizations and the NGOs in building
and maintaining the common property resources, reaching the unreached, generating
employment opportunities, etc.
11.6 KEYWORDS
ApniMandi It is different from traditional mandi or market
yard. Under this arrangement, producer sale this
produce directly to the consumer.
Farrington, John and David Lewis with S Satish and A Michat- Teves
(1995). Non-Governmental Organizations and the State in Asia: Rethinking
Roles in Sustainable Agricultural Development, Routledge, London and
New York.
Jodha, NS. (2000). Joint Forest Management of Forests: Small Gains, Economic
and Political Weekly, Vol. 35(50).
63
..
Institutional Infrastructures: Korten ..•David C. (1989). Getting to the 21" Century: Voluntary Action and the
Public, Private and Public-
Private Partnerships
Global Agenda, Oxford and IBH Publishing, New Delhi.
2) The people participation is sought right from the planning, implementation and
monitoring of the watershed programme. The SHGs are formed to manage the
resources/assets created under the programme.
2) NGOs play a greater role in reaching the outreached, in mobilizing the people
in watershed development programme, in the microfinance programme, in
developing efficient marketing system, in extension of the farm technology, etc.
For details please go through Section 11.4.
64
UNIT 12 AGRICULTURAL RESEARCH,
EDUCATION AND EXTENSION
IN INDIA
Structure
12.0 Objectives
12.1 Introduction
12.2 Agricultural Research
12.2.l Planting the Roots
12.3 AgriculturalEducation
12.3.7
,,').Krishi Vigyan Kendras (KVK)
12.0 OBJ-eCTIVES
After going through this unit, you will be in a position to:
• define their role and importance within the broad infrastructure of institutions
and development systems described; and
• work out ways and means bywhich the system can function more effectively
as the engine of growth.
12.1 INTRODUCTION
India, like other Third World countries was a late entrant in the development race.
From the nineteenth century onwards, developed countries had unlocked nature's
secrets one by one. The evolutionary process, the factors causing growth and decay,
the causes of diseases, were discovered by vigorous pursuit of scientific enquiry.
Techniques were found by which nature could be harnessed to human needs. Raised
to optimum levels.farm production easily overtook the requirements. Food shortages
became a dim memory of the past. ..
66
In stark contrast, Indian agriculture suffered from continued neglect, the farmer Agricultural Research,
Education and Extension
burdened ,byunjust land tenures, was exploited and deprived of even human dignity. in India
Agriculture policy which over a century, was to meet the basic requirement of food
for the population, now includes strategies for a variety of rural infrastructure, trade
and'services.investment, credit management, value-addition services, and import /
export strategies.
Both the successes and failures of the past help to plan and organise for the future.
Balanced economic growth at macro and micro levels will be determined by scientific
breakthroughs as well as infrastructural / administrative changes.
The tfuy roots of agricultural research in India which grew into a mighty tree were
laid in the nineteenth century by Allan Octavian Hume. An agriculturist and social
reformer, he was appointed by the Viceroy Lord Mayo, as the first Secretary of the
Department of Revenue, Agriculture and Commerce in 1871. Hume (who founded
the Indian National Congress in 1883), proposed a separate department of agriculture
with eminent scientists who would start research and development in farms, where
scientific experiments could be seen by farmers, because "For many generations to
come, the progress of India in wealth and civilization, must be directly dependants
on the progress in agriculture"
He closely studied and worked with farmers because he believed that true
development could take place only by improving on the indigenous knowledge and
experience of farmers.
Agricultural research was done by dividing each Province into circles on the basis of
differences in soil and climate. Funds were provided for setting up an experimental
farm and a depot for sale of seed, implements and manures to farmers in each circle.
SirAlbert Howard: Pioneering work on the root systems of all plants, discovery of
the needs of growing plants from soil, water and air, selection and breeding of
improved wheat varieties, and promotion of compcsting of farm and animal waste
by farmers.
On 23rd May, 1929 the Imperial Council for Agricultural Research was set up. Its
primary function was to promote, guide and co-ordinate agricultural research
throughout India, A non-lapsing fund of Rs.5 million was provided. Its mandate
also included training of researchers and acting as a clearing house for scientific
information for all matters related to agriculture. Later, education and development
work was added. The organizational set up was of a Chairman, two eminent scientists,
one each for agriculture and animal husbandry and thirty six members representing
central and provincial agriculture departments, Indian Universities, and.the planter
community.
The available infrastructure was used for systematic study of productivity so that
scientific crop planning could be initiated.
As a result, a large area was brought under linseed an oilseed crop and uneconomic
cultivation of wheat and rice was reduced. All research findings were examined and
finalised by the ICAR and then sent to provincial departments for demonstration to
farmers.
. In 1934, when the Bihar earthquake destroyed a big portion of the Pusa, the President
of the ICAR, Mian Fazl-i-Husain, proposed shifting the IAR! toanewcampus in
70
Delhi, where the soil and climate allowed research on a great variety of crops. He Agricultural Research,
Education and Extension
succeeded, and the Viceroy, Lord Willing don laid the foundation stone in February in India
1935.
The research infrastructure grew rapidly after the first University Education
Commission of 1948 in which the former President Sir S. Radhakrishnan and a'
panel of eminent Indian and foreign experts gave its recommendations. Paying special
attention to the weak infrastructure for education in rural areas, it was proposed to
set up rural universities which would provide scientific and practical knowledge to
the farm community. The Indo-US Technical Cooperation team and experts of
subsequent Review Committees endorsed the view and a blueprint for an agricultural
university, was drawn up. The model of the Land- Grant Universities of the United
State was suggested. .
In 1960, the first Agriculture University named after the veteran national leader
Govind Ballabh Pant was set up at Pantnagar on 16,000 acres of reclaimed forest
land in the Terai Region. The second University Education Commission headed by
the eminent educationist Dr. D .S. Kothari recommended setting up of one Agriculture
University in each state which would deal with all the agricultural concerns of the
region. One of the main elements for agricultural improvement suggested by the
Commission was research for developing appropriate technology. Other Review
teams including the Indo-US Technical Co-operation Team prepared blue-prints
for setting up rural universities. During the 5tJl and 6th Five Year Plans, 21 Universities
were set up in 16 major states. Some Universities like the Haryana Agriculture
University at Hissar, the Punjab Agriculture University at Ludhiana, and the Himachal
Pradesh University at Palampur, were set up by expanding and upgrading agriculture
colleges. A Central Agricultural University for the North-east region was set up at
Imphal in Manipur in 1993. Now there are 44 agricultural universities in the country
catering to the teaching, research and extension requirements of rural economy.
The Various Agricultural Research Institutes established up to 1987 are given in the
Tables i2.1, 12.2 and 12.3. The Institutes function under the Indian Council of
Agricultural Research (ICAR) and have research stations and sub-stations with
research facilities. Research in specialized areas is also done at government research
centres. Thus there-is a strong research base for developing the scientific capability
for dealing with complex issues and problems of the farm economy.
Sr. Insti.t.!!~/4aboratory
-, t-
Year of ' Controlli~g
No. Establishment Authority
"
5. Central Institute of Fisheries 1957 Department of
Technology, Cochin Agriculture,
·Government of India
0
72
Table 12.3: Agricultural Research Institutes/Bureaus Established During Agricultural Research,
Education and Extension
1967-1987 under Reorganized ICAR
in India
73
.Institutional Infrastructures: 12.2.14 . Research Projects/Schemes of the ICAR
Public, Private and Public-
, Private Partnerships
In order to strengthen the research base of different crops/productive resources,
ICAR has started a number of research projects/schemes. Some of the schemes
are of continuous nature and some are adhoc schemes. Let discus!" some of the
research project operating at the National level.
i~ .All India Co-ordinated Research Projects: The first All India Co-ordinated
Project on Maize was set up with the assistance of the Rockefeller Foundation
of the USA in 1957. Now there are 9 Project Directorates and 69 All India
Co-ordinated Projects covering various disciplines and conunodities such as
soils, crops, livestock, fisheries, home science and agricultural engineering. These
projects coordinate the research done on the subject by various scientists in
different institutes and disciplines.
The content of academic progranunes has changed over the years. Courses in Home
Science, Horticulture, Fishery, Banking, Cooperatives, Marketing and other disciplines
have been added to meet the demand. Agriculture colleges in several general universities
74 also do pioneering research work relevant to the needs of the region.
12.2.16 ResearchLeading to the Green Revolution Agricultural, Research,
Education and Extension
in Inriia
In the sixties, a break-through in wheat cultivation came with the successful
introduction of the dwarf variety of Mexican wheat in farmers' fields. Since then 122
disease resistant wheat varieties have been evolved resulting in sustainable, high
quality wheat crops. In rice, the introduction of the dwarf, Taichung Native and
release of High Yielding IR 8 in 1966, was followed by the release of over 260
varieties which responded to low-cost inputs and were resistant to numerous pests
and diseases. The boost in the production of cereals enabled the country to withstand
severe drought, and maintain a buffer stock of food-grains. The break -through in
the cultivation of oil seeds and pulses have enabled these high-value crops to be
cultivated in non- traditional areas, and raised their production in poor resource
areas.
-Agricultural research in India has stood the test oftime. For over a hundred years
the objective of research was the growing of adequate foodgrains. Now research
scientists must also find the answer to rural poverty and unemployment. Apart from
crop technology, other areas needing scientific inputs are dry land agriculture,
packages for diversified farming, production of adequate quality seeds, post-harvest
technology and the adaptation ofbio-technology. Scientists have to find ways of
raising production without adding to the pollution and depletion of natural resources
in the interests of the future ofIndian agriculture.
Note: a) Use the spaces given below for writing your answers.
b) Check your answer with those given at the end of the unit.
75
Institutional Infrastructures:
Public, Private and Public- 12.3 AGRICULTURAL, EDUCATION
Private Partnerships
Agricultural education covers a broad spectrum from formal education in schools,
colleges and universities to informal education given by public and private agencies
and individuals to all those engaged in agriculture and allied occupations, industries,
and services. Agricultural education scenerio in India is discussed as under:
In 1811, the efforts of distinguished British administrators like Viceroy Lord Mayo
led to the setting up of Departments like Revenue, Agriculture, and Commerce at
the Centre and in the Provinces. Guidelines were drawn up for teaching agriculture
sciences in rural areas to improve the competence of those working in farming and
farm-based occupations. A number of agricultural schools were set up to give formal
education in agriculture. Gradually, theseschools were either upgraded to agriculture
training institutes or merged into the general school system.
In 1947, the first school giving vocational training to rural youth was set up at Manjri,
near Poona. An Industrial Training Institute was set up a! Rudrapur (now in
Uttarkhand State), where courses were organized in all kinds of trades including
barbering and cooking.
Note: a)' Use the spaces given below for writing your answers.
b) Check your answer with those given ~t the end of the unit.
..................................................................................................................
r
In the ICAR, one out of8 Divisions deals with transfer of technology. There is a
Deputy Director-General assisted by Assistant Director-General, scientists I
specialists in relevant disciplines. There are 8 Zonal Co-ordination units, each
functioning under a specialist Zonal Co-ordinator for decentralized planning and
monitoring.
i) National Demonstration Projects: These were started in 1965 and are now
being implemented in selected districts by Agricultural Universities. Under this
scheme about 5,000 demonstrations mostly of food crops are arranged annually
in selected districts at the rate of about 100 demonstrations per annum per
district. After every two years the project shifts to another group offarmers.
Farmers are invited on the field where they can see the results of best cultivation
practices. Training is given to farmers and extension workers. The potential
yields of many varieties have been established through these demonstrations,
which help in preparing relevant agriculture production plans for the area.
ii) Operational Research Projects (ORP): These Projects were started in 1972
with the objective of testing and identifying appropriate technologies for specific
problems. ORPs are also operating for special groups like tribal communities
80
and scheduled caste fanners. Some achievements of the scheme are conservation Agricultural Research,
Education and Extension
of water for agriculture in dry areas through watershed management in India
programmes, increasing rice yield in water-logged areas by changing varieties
and practices, sustained record yields of oil seeds in dry areas, raising socio-
economic status of poor fanners by introducing mixed farming e.g., by combining
cereal and horticulture crops with animal husbandry and fishery.
ill) Krishi Vigyan Kendras and Trainers' Training Centres: The Education
Commission of 1964-66 had recommended setting up of a large number of
agricultural poly-technique institutes to improve the knowledge of vast numbers
of illiterate farmers, women and youth, and to train post-matriculates for
extension work. The first KVK was established in Pondicherry in 1974 under
the Tamil NaduAgriculture University. Over 541 KVKs are now established.
Several research sub-stations and centres have been converted into KVKs.
Each has 10 to 12 specialists, supporting staff, laboratory and a 50 acre farm
where demonstrations are held-and skill practice is given. Promotion of agricultural
science at the grass-roots and innovative training methods have been a feature
ofKVKs. A target of one KVK per district is to be achieved .
. iv) Lab-to-Land Project: The project started by the ICAR in 1979. The focus is
on resource poor farmers and landless labourers who have been by-passed in
many development programmes. The programme is implemented by existing
institutions and staff. A team of scientists works with adopted families in their
own locations for a two year period. Knowledge and facilities are provided to
create economic opportunities and skills which will lead to sustainable livelihood.
The project brought benefits to neglected farm communities and valuable
information to scientists on adoption of technology to meet the constraints of
fanners.
Additional EOs and VLWs were appointed depending on the size of the farm
population and requirement. The same structure was followed in the National
Extension Service launched on October 2nd, 1953, by which the scheme was
gradually extended to the entire country.
Development Commissioner
Directors, District Development Departments
Project Officers for every 3 Blocks
Block Development Officers, one Block for ten villages
4-5 Extension officers in each Project officelBlock
The Community Development Programme was based on the principle that all aspects
. of rural life are inter-related. Hence, it had multi-purpose workers trained to help
farmers in all socio-economic aspects and motivate self-help and leadership. The
National Institute for Community Development (NICD) was set up at Hyderabad
to train batches of supervisory and field functionaries, farm radio and television
personnel and others.
The extension structure included five additional village level workers, one additional
Agriculture Extension Officer (AEO) and a Project Officer at the Block level. The
extension staffs were free from the control of the Block Development Officer (BDO).
A single line of command up to the Collector or Deputy Commissioner was
established.
For the first time, it was considered essential to have a systematic media support to
convey timely information to farmers. A Farm Information Bureau was established
in the Directorate of Extension in the Ministry of Agriculture. State development
departments appointed staff in new area of Information and Communication. Farm
Radio Services were launched through the Farm Radio Unit in All India Radio, in
which agriculture graduates were appointed as Farm Radio Officers. Thus there
was an infrastructure for extension through media.
Resource poor areas of the country did not come within the scope of the intensive
agriculture development programmes. Hence, special sector schemes came into
being in the seventies. The Small Farmers Development Agency (SFDA) and Marginal
Farmers and Landless Labour Development Agency (MFAL) were initiated in
which extension personnel were appointed for transfer of technology to poor farmers .
and also arrange for supply of subsidised inputs.
The growth pattern in the early sixties revealed that 100 districts in the
country remained backward with the greatest number of the poor and landless.
C. Subramaniam, Ministry of Agriculture from 1964-67 launched a prestigious
scheme, the Integrated Rural Development Programme (IRDP). Adopting the
Gandhian vision of "Wiping every tear from every eye", it involved micro-level
planning at Block level, optimum use of the natural resources and integrated
growth of village level institutions, rural trades and crafts, roads, minor irrigation,
.Cooperative credit. Extension staff like village level workers and panchayat officers
worked under the key functionary, the BDO, to, implement the scheme.
The operation of these schemes showed that small farmers were as responsive
as big farmers to new ideas and quickly adopted practices. It was found that
in addition to the practices, the "package" provided by extension services
should include such essentials as credit, marketing and an efficient administration .
..This led to the recognition of management services as an essential part of extension
services.
83
lnstitutiona'l Infrastructures: 12.4.12 Re-organised Agriculture Extension (T & V
Public, Private and Public-
Private Partnerships Programme)
Agriculture extension in India took a fresh turn in 1970. The re-organised agriculture
er
extension scheme also called the Training and Visit &V) scheme combined intensive
training of extension workers with regular visits for transferring their knowledge to
farmers.
Extension workers were assigned only the work of crop development under a single
line of command of Agriculture Departments. At the district level, the District
Agriculture Officer coordinated the tight schedule of training and visits. He was
helped by a team of Subject Matter Specialists (SMS).
The schedule ofT &V which was rigorously followed and monitored by World Bank
and Ministry of Agriculture was:
The T& V programme was adopted under the VI and VII Five Year Plans. By the
middle of the VII Plan it had been extended to 17 states under World Bank funding
which was gradually phased out.
The weakest link in the transfer oftechnology chain proved to be the contact farmers
who did not make adequate efforts to pass on the messages to others. The T&V
system also by-passed rural women, youth and poor farmers.
Note: a) Use the spaces given below for writing your answers.
b) Check your answer with those given at the end of the unit.
85
Institutional Infrastructures: 2) Explain tlie main features ofT &V programme.
Public, Private and Public-
Private Partnerships
Krishi Vigyan Kendras These are farm science centres started by IeAR
in 1974.
3) True.
87
NOTES
MPDD-IGNOU/P.O.5.HIFch,2012(Reprint)
.•.
ISBN-978-8t -266-3617-4