The working group on risk management in
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| Eligibility Criteria (i) Small and marginal farmers who have availed loans from commercial banks on a priority basis. (ii) Fall in income from the appraised amount should be more than The suggested slabs are Fall in income 10-20% - 25% of loan amount. More than 20% fall - upto 50% of loan amount limited to Rs. 50,000/- 111 Fund Management A trust may have to be created by willing Commercial Bank/NABARD, for the management of the fund. About 10% of the fund, maybe invested in the market . The income from the investment could be utilized, for meeting operational expenses, for the implementation of the scheme. However, the exact share required for allowing investment could be decided in consultation with the fund management agency, by taking into account the possible revenue and costs of implementation. Another 30 percent, could be retained as the reserve amount of the fund. More detailed analysis is required, to decide the minimum share allowed for investment as well as the minimum reserve amount to ensure sustainability of the fund Other possibilities of growth of the fund, through non budgetary measures, could also be examined. At the national level, a committee under the chairmanship of the Minister (Agriculture), with representatives from the Reserve Bank of India, NABARD, Secretaries from the Ministries of Finance, Agriculture and Planning Commission, could be constituted for deciding the state level allocation and for framing guidelines. At the state level, a committee under the chairmanship of the Chief Secretary, with secretaries from Planning, Finance, APC, Director (DES), representatives of the Reserve bank of India, NABARD, SLBC, etc, could be constituted for deciding the eligible crops, districts, declaring the average market price for the purpose, etc. The existing State Level Bankers Committee, could monitor the implementation of the fund. At the district level, the District Collector could implement the scheme, with the support of the lead bank manager and District Agricultural Officer. After the preliminary scrutiny at the district level, eligible applications could be sent to the banks concerned, for reappraisal based on the published average market price for the purpose, by the distict level committee. Once the eligible applicants and amount are decided, the advance amount could be credited directly by the Trust fund, to the farmer’s loan account. The farmer has to repay the amount to the bank, after the period of advance for the settlement of the entire credit. Repayment maybe made, in the same credit institution itself. Some agreement has to be obtained from the borrowers to this end. A supportive recovery mechanism may also be introduced, by linking this, with future credit from any financial institution and assistance from various schemes of Panchayats/ departments. On a pilot basis the scheme could be introduced in two Plantation crop dominated districts each, from Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra and Assam The scheme is more relevant for plantation crops, due to the prolonged agrarian crisis in these states. Based on the success of the pilot , the scheme could be extended to other states and for other crops, if required. |