Role of Institutional Mechanisms

through proactive management plans. The information is useful in proper planning of farm activities like sowing, timing of irrigation, fertilizer and pesticides application,
harvesting, as well as ineffective preparation and installation of farm-protection devices and other mitigating measures. Though existing sources of information are capable of drawing strategic decision responses in agriculture, the need for proper understanding on the impacts have long been recognized. Wider adoption of the multiple risk management tools to sectoral decision-makers in Indian agriculture would be a major breakthrough for socioeconomic development in rural areas.
In rural development policies and programmes, greater attention is given to manage the resources without targeting underlying risks. Several academic institutions, central and state extension organizations, nongovernmental organizations, rural development institutions, nationalized credit institutes, local cooperatives are in place to address these risks independently. As the farming risks are in multiple dimensions, the development programmes with independent objectives seldom matches with the requirement of farmers.
Efforts are underway to make production, market and price forecasts based on the linear relationships and available monitoring systems for the last few decades. However, the methods are not robust and need considerable improvement through nonlinear frameworks so as to give appropriate risk management strategies. Linking of weather,
climate, pest and diseases, market, price, subsidies and other external factors are essential to meet the challenges of seasonal and year-to-year fluctuations.
Finance institutions and development programmes have become an increasingly important component of rural development to create employment, reduce poverty or to promote micro-enterprise development in agriculture sector. These credits programmes have to target vulnerable groups, as they have minimum access to economic resources and make a firm impact on social, legal, economic, political position. Due to high interest rates insisted by the local moneylenders, the farm households need to pay at times upto 60% of their produce. Though solidarity group model, cooperative credit model, individual lending model are very common in India, it requires additional capacity building activities to the rural service organizations to facilitate appropriate financial risk management strategies.

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