Describe the sources of agricultural finance.
Answers
Explanation:
In India, agricultural credit are being advanced by different sources. The short term and medium term loan requirements of Indian farmers are mostly met by moneylenders, co-operative credit societies and Government. But the long-term loan requirements of the Indian farmers are also met by moneylenders, land development banks and the Government.
Nowadays, the long term and short term credit needs of these institutions are also being met by National Bank for Agricultural and Rural Development (NABARD).
Sources of agricultural credit can be broadly classified into institutional and non-institutional sources. Non-Institutional sources include moneylenders, traders and commission agents, relatives and landlords, but institutional sources include co-operatives, commercial banks including the SBI Group, RBI and NABARD.
Table 7.15 shows the contribution of these different sources to the total agricultural credit in India since 1951- 52 to 1996.
Borrowing of Cultivators
It can be revealed from Table 7.15 that among all the different non-institutional sources the contribution of money lenders was highest and that was to the extent of 69.7 per cent. But its contribution gradually came down to 49.2 per cent in 1961-62 and then to 7.0 per cent in 1996. Total contribution of non-institutional source towards agricultural credit has gradually declined from 92.7 per cent in 1951-52 to 25.0 per cent in 1996.
The share of institutional sources to the total agricultural credit which was 7.3 per cent in 1951-52 gradually increased to 18.7 per cent in 1961-62 and then to 75.0 per cent in 1996. Out of these institutional sources, co-operatives contributed 40 per cent and commercial banks contributed 30.0 per cent of the total farm credit in 1996.
Answer:
Sources of agricultural credit can be broadly classified into institutional and non-institutional sources. Non-Institutional sources include moneylenders, traders and commission agents, relatives and landlords, but institutional sources include co-operatives, commercial banks including the SBI Group, RBI and NABARD.