Agri-Business Banking

AGRI-BUSINESS BANKING
Annexure-I
Cover Page of Report
SEMINAR REPORT ON CONTEMPORARY
MANAGEMENT ISSUES
Topic:___ AGRIBUSINESS__BANKING__________________________________________________________
______________________________________________________________________
Submitted to Rajasthan Technical University, Kota in partial fulfillment of the requirement of MASTER OF BUSINESS
ADMINISTRATION (MBA)
By
Name of Student: ___ NikeetaAgarwal_____________________________________
MBA II Sem.
FROM
BIYANI INSTITUTE OF SCIENCE & MANAGEMENT (BISMA) 1

JAIPUR (RAJASTHAN
Annexure-II
ACKNOWLEDGEMENT
I am highly grateful and Indebted to Shri / Ms. _Rachna Khandelwal_____________________________
My faculty guide who has helped me in completing this report right from
beginning to end. He / She has not only told me the sources of getting the needed
information for this report but also extended helping hand in finalizing its
contents and over all presentation. Without His / her active support and guidance,
I would not have completed this report.
Date _______________ Name of the Student and her signature
NIKEETA AGARWAL
2
Annexure-III
CERTIFICATE OF GUIDE
It is certified that. Ms _____ Nikeeta Agarwal,______________________________________________
Student of MBA II Sem., BISMA has completed this seminar report under my
guidance. I wish her all success in academic carrier as well as her life.
Name & Signature of Faculty Guide
3
Annexure-IV
DECLARATION BY STUDENT
I hereby declare that this report is my original work and I have not copied it from
Anywhere or earlier such report prepared by seniors. I further declare that I have
Not submitted this report anywhere else to RTU Kota in partial fulfillment of my
MBA course.
Date:- ____________ Name & Signature of Student
4
CONTENTS
SL.No CHAPTERS PAGE

NO.
1. Acknowledgement
2. Preface
3. Executive Summary
4. Introduction 1-8
5. Overview on Agriculture Industry in India 9-12
6. Role of Banking sector in Indian Agriculture 13-15
7. Indian banks involved in Agribusiness Banking 30-44
8. Recent News as regards the Union Budget 2010-11 48-50
9. Microfinance in India 51-53
10. Acronyms and Abbreviations used in the Agriculture 54

Industry
Suggestion and Conclusion

11.
5
6
INTRODUCTION
India is the world's fourth agricultural power. Agriculture contributes about 20% of the GDP and
employs almost two-thirds of the active population. Within the agriculture industry, agribusiness is
widely used simply as a convenient portmanteau of agriculture and business, referring to the range of
activities and disciplines encompassed by modern food production. There are academic degrees in
and departments of agribusiness, agribusiness trade associations, agribusiness publications, and so
forth, worldwide. Here, the term is only descriptive, and is synonymous in the broadest sense with food
industry.
Agribusiness system has undergone a rapid transformation as new industries have evolves and
traditional farming operations have grown larger and more specialized. The transformation did not
happen overnight, but came slowly as a response to a variety of forces. Knowing something about how
agribusiness came about make it easier to understand how this system operates today and how it is
likely to change in the future.
Initially agriculture being the major venture it was easy to become a farmer, but productivity was low.
Average farmer produced enough food to feed just four people. As a consequence most farmers were
nearly totally self-sufficient. They produced most of the inputs they needed for production, such as
seed, draft animals, feed and simple farm equipment. Farm families processed the commodities they
grew to make their own food and clothing. They consumed or used just about everything
they produced. The small amount of output not consumed on the farm was sold for cash. These items
were used to feed the minor portion of the country’s population that lived in villages and cities. A few
agricultural products made their way into the export market and were sold to buyers is other countries.
Indian banks have a long history of providing financial services to farmers. This Project Work
outlines some of the specialist agribusiness products which have been developed to help in managing
risk, special assistance which is provided by the sector during droughts and the importance of the
contribution of the agriculture, forestry and fishing industries in India.
According to the Confederation of Indian Industry, Indian agriculture suffers mainly because of
expensive credit, a distorted market, intermediaries (who increase cost rather than add value),
controlled prices and poor infrastructure. It has also suffered because of poor irrigation facilities, use of
traditional technology and practices, farmers’ poor economic status, fragmented landholdings, lack of
post harvest infrastructure and lack of farm extension. Banks should consider these facts to invest
more in infrastructure facilities like irrigation facilities, processing, storage and marketing activities.
Such agricultural infrastructure can be improved by banks, as there are ample prospects for banks to
invest in such activities.
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AGRIBUSINESS:
The word agriculture indicates plowing a field, planting seed, harvesting a crop, milking cows, or
feeding livestock. Until recently, this was a fairly accurate picture. But today’s agriculture is radically
different.
Agriculture has evolved in to agribusiness and has become a vast and complex system that reaches
for beyond the farm to include all those who are involved in bringing food and fiber to consumers.
Agribusiness include not only those that farm the land but also the people and firms that provide the
inputs (for ex. Seed, chemicals, credit etc.), process the output (for ex. Milk, grain, meat etc.),
manufacture the food products (for ex. bread, breakfast cereals etc.), and transport and sell the food
products to consumers (for ex. restaurants, supermarkets).
In agriculture, agribusiness is a generic term for the various businesses involved in food production,
including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and
distribution, processing, marketing, and retail sales. The term has two distinctly different connotations
depending on context.
During the same period technological advance were being made in food preservation method. Up
until this time the perishable nature of most agriculture commodities meant that they were available
only at harvest. Advance in food processing have made it possible to get those commodities all
throughout the year.The farms that meet the consumers demand for greater processing and
convenience also constitute a major part of agribusiness and are referred to as the processing
manufacturing sector.
It is apparent that the definition of agriculture had to be expanded to include more than production.
Farmers rely on the input industries to provide the products and service they need to produce
agricultural commodities. They also rely on commodity processors, food manufactures, and ultimately
food distributors and retailers to purchase their raw agricultural commodities and to process and deliver
them to the consumer for final sale. The result is the food and fiber system.
Farmers found it increasingly profitable to concentrate on production and began to purchase inputs
they formerly made themselves. This trend enabled others to build business that focused on meeting
the need for inputs used in production agriculture such as seed, fencing, machinery and so on. These
farms involved into the industries that make up the “agricultural inputs sector”. Input farms are major
part of agribusiness and produce variety of technologically based products that account for
approximately 75 per cent of all the inputs used in production agriculture.
commodity processing and food manufacturing moved off the farm. The form of most commodities 8
At the same time the agriculture input sector was evolving, a similar evaluation was taking place a
(wheat, rice, milk, livestock and so on) must be changed to make them more useful and convenient for
consumers.
The food and fiber system is increasingly being referred to as “agribusiness” .

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The term “agribusiness” was first introduced by Davis and Goldberg in 1957 .
To capture the full meaning of the term “agribusiness”,it is important to visualize these three sectors as
interrelated parts of a system in which the success of each part depends heavily on the proper
functioning of the other two.
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Important requisites for a successful Modern agri-business are:
1. Clean objectives : Determination of objectives is one of the most essential pre-requisite for the
success of business. The objectives set forth should be realistic and clearly defined. Then, all
the business efforts should be geared to achieve the set objectives. In a way, objectives are
destination points for an agribusiness. As a traveler must know here he/she has to reach, i.e.
destination similarly business also must know what objectives.
2. Planning : In simple words, planning is a pre-determined line of action. The accomplishment of

objectives set, to a great extent, depends upon planning itself. It is said that it does not take time
to do thing but it takes time to decide what and how to do. Planning is a proposal based on past
experience and present trends for future actions. In other words, it is an analysis of a problem
and finding out the solutions to solve them with reference to the objective of the farm.
3. Research : As indicated earlier, today the agricultural production philosophy “produce what the
consumer want”. “Consumer’s behavior” is influenced by variety of factors like cultural, social,
personal and psychological factors. The knowledge of these factors is acquired through market
research. Research is a systematic search for new knowledge. Market research enable a
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business in finding out new methods of production, improving the quality of product and
developing new products as per the changing tastes and wants if the consumers.
4. Finance : Finance is said to be the life-blood of business enterprise. It brings together the land,
labour, machine and raw materials into production. Agribusiness should estimate its financial
requirements adequately so that it may keep the business wheel on moving. Therefore, proper
arrangements should be made for securing the required finance for the enterprise.
5. proper plant location, layout and size : The success of agribusiness depends to a great
extent on the location. Where it is set up. Location of the business should be convenient from
various points of view such as availability of required infrastructure facilities, availability of inputs
like raw materials, skilled labour, nearer to the market etc. Hence the business men must take
sufficient care in the initial stages to selected suitable location for his business.
6. Efficient management : One of the reasons for failure of business often attributed to as their
poor management or inefficient management. equally. Efficient businessman can make proper
use of available resources for achieving the objectives set for the business.
7. Harmonious relations with the workers : In an agribusiness organization, the farmer operator
occupies a distinct place because he/she is the main living factor among all factors of
production. In fact, it is the human factor who makes the use of other non-human factors like
land, machine, money etc. Therefore, for successful operation of business, there should be
cordial and harmonious relations maintained with the workers to get their full cooperation in
achieving business activities.
Scope of agribusiness:
It was already indicated that agribusiness is a complex, system of input sector, production sector,
processing manufacturing sector and transport and marketing sector. Therefore, it is directly related to
industry, commence and trade, Industry is concerned with the production of commodities and materials
while commerce and trade are concerned with their distribution.
Industry:
Industry refers to the processes of extraction and production of goods meant for final consumption
or use buy individual or buy another industry for its production. Thus goods used by the final or ultimate
consumers are called “consumer goods” such as edible oils, fruit jams, papaya, pickles etc.
Types of Industries :
According to nature, the industries are broadly classified into following types.
1) Extractive Industries : These industries are concerned with the extraction ;and utilization of natural
resources. Example – fishing, fruit gathering, agro-based industries, forestation.
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2) Genetic Industries : These industries include breeding of plants, seeds, cattle breeding farm, fish
hatcheries, poultry farms. Of course, factors like nature, climate and environment play a dominant role
in these industries, yet human skill involved in their production cannot be ignored. For example
intensive agriculture is possible with greater amount of capital and larger number of workers.
3) Manufacturing Industries : These industries are engaged in the conversion of raw material or
semi finished goods produced in the extractive industries. Some prominent examples are – cotton
textile industry, spinning and weaving mills etc. Manufacturing industries can further be classified into
five types : (i) Analytical industry (ii) Processing industry (iii) Synthetic industry, (iv) Service industry (v)
Assembly industry.
Commerce :
Commerce is the another major component of agribusiness. It includes all those activities which are
necessary to bring goods and services from the place of their production to the place of their
consumption. Thus, sit includes the buying and selling of goods and service and all those activities
which facilitate trade such as storing, grading, packaging, financing, insurance and transportation. In
simple words, commerce includes trade and aid to trade. The principal function of trade (commerce)
are to remove the hindrance of person, place, time exchange, knowledge etc. and ensure a free and
smooth flow of goods from the producers to the consumers.

Banking

The Banking Regulation Act, 1949 is the basis for regulation of banking in India.
Section 5(b) of the Act defines banking as “banking” means the accepting, for the purpose of lending or
investment, of deposits of money from the public, repayable on demand or otherwise, and is withdraw
able by cheque , draft, order or otherwise.
Forms of Business in which Banking Companies may Engage:

Section 6(1) specified additional forms business in which banking companies may engage in.
Section 6 (1)
In addition to the business of banking, a banking company may engage in any one or more of the
following forms of business, namely:-
(a)- The borrowing, raising, or taking up of money;

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- The lending or advancing money either upon or without security;
-The drawing, making, accepting; discounting, buying, selling collecting and dealing in bills of
exchange, hundies, promissory notes, coupons, drafts, bills of lading, railway receipts, warrants,
debentures, certificates, scripts and other instruments, and securities whether transferable or
negotiable or not;
- The granting and issuing of letters of credit, travellers’ cheques and circular notes;
- The buying, selling and dealing in bullion and specie;
- The buying and selling of foreign exchange including foreign bank notes;
- The acquiring, holding, issuing on commission, underwriting and dealing in stock, funds, shares,
debentures, debenture stock, bonds, obligations, securities and investments of all kinds;
- The purchasing and selling of bonds, scripts or other forms of securities on behalf of constituents or
others,
- The negotiating of loans and advances;
- The receiving of all kinds of bonds, scripts or other forms of securities on deposits or for safe custody
or otherwise;
- The collecting and transmitting of money and securities;
(b) – acting as agents for Government or local authority or any other person or persons;
- The carrying on of agency business of any description including the clearing and forwarding of goods,
giving of receipts and discharges and otherwise acting as an attorney on behalf of customers, but
excluding the business of a [managing agent or secretary and treasurer] of a company;
(c) Contracting for public and private loans and negotiating and issuing the same;
(d) The effecting, insuring, guaranteeing, underwriting, participating in managing and carrying out of
any issue, public or private, of State, municipal or other loans or of shares, stock, debentures, or
debenture stock of any company, corporation or association and the lending of money for the purpose
of any such issue;
(e) Carrying on and transacting every kind of guarantee and indemnity business;
(f) Acquiring and holding and generally dealing with any property or any right, title or interest in any
such property which may form the security or part of the security for any loans or advances or which
may be connected with any such security;
(g) Undertaking and executing trusts;
(h) Undertaking the administration of estates as executor- trustee or otherwise;
(i) Establishing and supporting or aiding in the establishment and support of associations, institutions,
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funds, trusts and conveniences calculated to benefit employees or ex-employees of the company or
the dependents or connections of such persons; granting pensions and allowances and making
payments towards insurance; subscribing to or guaranteeing moneys for charitable or benevolent
objects or for any exhibition or for any public, general or useful object;
(j) The acquisition, construction, maintenance and alteration of any building or works necessary or
convenient for the purposes of the company;
(k) Selling, improving, managing, developing, exchanging, leasing, mortgaging, disposing of or turning
into account or otherwise dealing with all or any part of the property and rights of the company;
(l) Acquiring and undertaking the whole or any part of the business of any person or company, when
such business is of a nature enumerated or described in this sub- section;
(m) Doing all such other things as are incidental or conducive to the promotion or advancement of the
business of the company;
(n) Any other form of business which the Central Government may, by notification in the Official
Gazette, specify as a form of business in which it is lawful for a banking company to engage.
(2) No banking company shall engage in any form of business other than those referred to in sub-
section (1).
Fact Sheets:
Accessibility of banking
Today, banks are effectively open 24-hours a day, seven-days-a-week. Customers need not even
leave their home or place of business to do their banking. Having said this, banks understand that
some customers need or prefer to bank face-to-face. As such, over the past 3 years, face-to-face
services provided by banks – whether branch level or other - have been growing at a steady rate. In
contrast, more than twenty years ago, banking services were operated using passbooks and offered
only at branches between 10am and 5 pm, Monday to Friday.
Affordability of banking
On the whole, banking in India has never been more affordable than it is today. Improved affordability
has been most marked for household and small business customers. Indian bank fees and profits are
not high by world standards, and everyday banking is cheaper than basic services such as water and
transport.
Another day, another bill to pay

Bills – we all get them and we all have to pay them. Sometimes it seems as if there’s a never ending
chain of bills – just when you’ve paid a bill for the home phone, a bill for the mobile phone arrives. And
why is it that the water company, the electricity company and the gas company all seem to send their
bills at the same time? This fact sheet looks at the various options available for paying bills.
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Corporate Responsibility:
Banks in India value the communities in which they find themselves and are committed to engaging
with their stakeholders – whether that be their customers, employees, suppliers, community partners,
the broader community or the environment.
For those Indians who are financially disadvantaged, pensioners, students, people with a disability,
there are substantial fee discounts and exemptions provided by most financial service providers. A
number of banks assist their customers and the broader community by providing financial literacy
information and seminars.
Banks also make a difference in our community, whether it is by supporting a helicopter which helps
save lives, volunteering to help people in their suburb, actively helping raise money for medical
research, development of programs to help our young people in sport, business and improve life skills,
sponsorship of sporting clubs and associations, not to mention funding of education and scholarship
opportunities.
The Department of Agriculture and Cooperation is committed to the welfare and economic upliftment of
the farming community in general. The Department formulates and implements National Policies and
Programmes for achieving rapid growth and development through optimum utilization of country's land,
water, soil and plant resources.
India is estimated to harvest an all-time record output of 235.88 million tonne (MT) of foodgrains in the
2010-11 crop year (ending June), courtesy the highest-ever production of wheat and pulses.
Addressing the Kharif Conference here, Agriculture Minister Sharad Pawar said the third advance
estimate figures available with him showed an all-time record production of foodgrains of 235.88 MT.
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The country has achieved an all-time high production of foodgrains, estimated at 235.88 million
tonnes in 2010-11, said Agriculture Minister Sharad Pawar on Wednesday. This came on the strength
of a record output of wheat and pulses. The highest output of foodgrains, so far, has been the 234.47
million tonnes produced in 2008-09.
Bakery & Confectionery Products:

Bakery, Biscuits, Chocolate Chip, Chocolates, Cocoa, Confectionaries, Confectionery, Cookies,
Drinking Chocolates, Bread, Cakes, Malted Foods, Sweets, Pastry, Toffees .
Cattle Feed Supplements

Cattle Feed, Animal Feed, Animal Feeding Stuffs, Fodder.
Dry Fruits & Nuts

Dry fruits, Cashew Kernels , Cashew Nut, Cashews, Almonds, Roasted Dry Fruits, Peanuts,
Groundnut, Walnut Kernels, Walnuts, Indian Peanuts, HPS Groundnuts.
Dyes & Color Additives

AZO Dyes, Bleaching Machinery, Colours, Color Additives, Colour Additives, Cottex Dyeing, Dye
intermediates.
Edible Oil & Allied Products

Coconut Oil, Cooking Fats, Cooking Oil, Cumin Seed Oil, Edible Oil , Castor Oil , Celery Seed Oil ,
Ajwain Oil .
Fertilizers
Bio Fertilizers, Chemical Fertilizers, Agriculture Fertilizers, Natural Fertilizers, Non-hazardous Bio
Fertilizers, Non-toxic Fertilizers, Organic Fertilizers, Organic Manure, Fertilizer Mixtures, Fertilizers,
Fertilizer Mixtures, Fertilizers, Urea Fertilizers.
Flowers, Floriculture & Dried Flowers

Dried Floral Items , Dried Flowers , Dry Flower , Bouquets, Cane Flowers , Lotus Pods , shola Flowers
, Palm Leaf , Floriculture, Flowers, Foliage, Handmade Flowers.
Food Processing Plants, Machinery & Equipment

Bakery Equipment, Dairy Equipments, Dairy Farms Equipment, Food Grain Machine, Food Processing
Equipment, Frying System, Spray Dryers.
Fresh, Dried, Preserved & Dehydrated Fruits and Vegetables

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Bananas Dried , Bananas Fresh , Beans, Cherry, Cucumbers, Dried Fruits , Dried Truffles , Dried
Vegetables , Carrots, Lemon, Mandarins, Mangosteens, Muslin, Shallots, Spinach, Mixed Vegetables ,
Mushroom, Mushroom Spawn , Oranges Fresh , Papaya, Pineapple, Potatoes Fresh , Preserved Fruits
, Preserved Vegetables , Radiata Dried, Fresh Apples , Fresh Asparagus , Fresh Fruits , Fresh Grapes
, Fresh Oranges , Fresh Vegetables , Gherkins, Grapes, Fresh Turnips.
Liquors, Mineral Water & Beverages

Beverages, Beverages, Brandy, Aerated Water , Aerated Waters , Alcoholic Beverage , Liquors, Rum,
Sandpiper, Schweppes, Soft Drinks , Spring Water , Mineral Water , Fat Liquors , Gin, Vodka, Whisky,
Wine, Indian Liquor, Indian Wine.
Milk & Dairy Products

Cheese Spread , Condensed Milk , Curd , Dairy Products , Dairy Whitener , Dry Yeast, Butter, Cheese.
Other Miscellaneous Agro Products

Bajra, Barley, Dried Marine Products , Cane, Jaggery, Agro Commodities , Agro Product , Jaggery
Powder , Sorbitol, Soya Meals , Starch, Sugar, Namkeens, Natural Honey , Onions, Papad, Flour,
Foodstuffs, Glucose.
Import and Export of Agriculture Commodities vis-a-vis Total National Imports and
Exports during 2008-2009 to 2009-10
Value (Rupees in crores)
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April 08 - March April 2009- April 2010-Oct.

Commodity
2009 March2010 (P) 2010 (P)
QuantityValue QuantityValue QuantityValue
1 2 3 4 5 6
Pulses 250.77 354.69 348.47 493.79 1165.04 1685.37
Wheat 1365.97 774.35 4.22 2.87 1.35 0.84
Rice 34.99 29.95 13.20 17.79 0.06 0.06
Other
205.20 114.07 30.38 15.61 3.85 2.00
Cereals
Cereal
14.36 43.14 20.27 48.90 25.21 56.83
Preparation
Milk &
18.89 107.31 1.37 7.66 0.70 5.14
Cream
Cashew
256.00 1198.26 249.09 962.14 7.88 18.88
Nuts
Fruits &
Nuts
Excluding - 590.84 - 803.99 - 353.40
Cashew
Nuts
Spices 65.08 294.10 50.75 249.60 36.90 232.27
Sugar 1181.18 1110.80 30.61 31.36 26.53 32.43
Oil Seeds - 15.42 - 7.89 - 0.98
Vegetable
Oils Fixed 4195.64 8046.05 3974.64 5932.76 2776.24 3985.01
(Edible)
Vegetable &
1.35 10.07 2.04 13.74 9.30 22.39
Animal fats
Cotton (Raw
237.40 1253.93 212.07 1183.15 236.72 1329.49
& Waste)
Jute (Raw) 137.40 139.31 73.37 82.57 33.56 38.90
Tea 5.06 25.61 6.40 41.49 6.22 35.98
Wood &
Wood - 1958.83 - 2135.05 - 1511.58
Products
Total
Agricultural 16066.73 12030.36 9311.55
Imports
Total
National 215528.53 226773.47 141989.68
Imports
% Share of
7.45 5.31 6.56
Agricultural
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Overview on Agricultural Industry in India

The Indian Agriculture Industry is on the brink of a revolution that will modernize the entire food chain,
as the total food production in India is likely to double in the next ten years.
As per recent studies the turnover of the total food market is approximately Rs.250000 crores (US $
69.4 billion) out of which value-added food products comprise Rs.80000 crores (US $ 22.2 billion). The
Government of India has also approved proposals for joint ventures, foreign collaborations, industrial
licenses and 100% export oriented units envisaging an investment of Rs.19100 crores (US $ 4.80
billion) out of which foreign investment is over Rs. 9100 crores (US $ 18.2 Billion). The agricultural food
industry also assumes significance owing to India's sizable agrarian economy, which accounts for over
35% of GDP and employs around 65 per cent of the population. Both in terms of foreign investment
and number of joint- ventures / foreign collaborations, the consumer food segment has the top priority.
The other attractive features of the Indian agro industry that have the capacity to lure foreigners with
promising benefits are the deep sea fishing, aqua culture, milk and milk products, meat and poultry
segments.
Excellent export prospects, competitive pricing of agricultural products and standards that are
internationally comparable has created trade opportunities in the agro industry. This further has
enabled the Indian Agriculture Industry Portal to serve as a means by which every exporter and
importer of India and abroad, can fulfill their requirements and avail the benefits of agro related buy sell
trade leads and other business opportunities.
This Indian agro industry revolution brings along the opportunities of profitable investment and
agriculture-industry-india.com provides you the B2B platform with agro related trade leads, exporters &
importers directory etc. that help you make your way to profit easy.
To lead yourself to the destination of profit through the Indian Agriculture Industry, know maximum
about the EXIM policy, programs & schemes, price policy, seed policy and statistics at the Indian agro
portal and harvest benefits from India, world's second largest producer of food and a country with a
billion people. From canned, dairy, processed, frozen food to fisheries, meat, poultry, food grains,
alcoholic beverages & soft drinks, the Indian agro industry has dainty areas to choose for busines
Roles of the Banking Sector in Indian Agriculture 19

The Indian banking sector consists of commercial and cooperative banks. The role of both types of
banks is very significant in Indian agriculture. Cooperative banks were considered as the major source
of credit flow to agriculture, but with the time, commercial banks too have come forward to extend
credit to agriculture. The share of commercial banks in providing credit to agriculture has increased
from 49% in 1996-97 to 52% in 2000-01. But as per RBI’s estimation, commercial banks are still far
behind in achieving their target of providing 18% of the total credit to agriculture and allied sectors. On
the other hand, the number of bank branches at rural centers has also decreased from 35,329 in 1994
to 32,481 in 2002. This has created a flutter in the ranks of the UPA government, which promised to
double the agricultural credit in the next three years.
The role of the banking sector in agriculture is not limited to providing credit. This article talks
about the emerging roles of banking in agriculture and allied sectors and the private-public partnership
(of private or public banks and government or private sectors).
Kisan Credit Card Scheme
The Kisan credit card scheme was first introduced in India by Andhra Bank in 1998. The scheme aims
to facilitate access to short-term credit to farmers and to simplify the credit mechanism, so that farmers
can receive credit on time. The different commercial banks, Regional Rural Banks (RRBs) and
cooperative banks issue the Kisan credit card. By September 2002, 271.81 lakh,Kisan credit cards had
been issued (See Table1), which is considered a significant achievement.Rural financial institutions are
not well integrated with agriculture support systems like R&D, Extension, supply chain and processing,
and their credit policy is too crop centric.So, non-crops and other high value activities are not taken
care of. Only traditional crops have credit access; most banks give out only 15% or less of their total
portfolio to the agri-sector as against the mandatory 18%.It was expected that with the introduction of
the Kisan credit card, the farmers’ condition will improve and they will be less dependent on
moneylenders, but in reality farmers now are more dependent on moneylenders because of the lack of
proper implementation of the policies laid down for the benefit of farmers and bureaucratic hurdles in
getting credit from banks.
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Insurance
Indian agriculture depends heavily on the monsoon. Crops often get damaged because of abrupt
changes in the weather.To overcome all these problems, microfinance and general insurance
companies have come up with crop and weather policies which can be helpful to poor farmers.
Example: Basix, one of the largest microfinance companies in India at Hyderabad, announced India’s
first rainfall insurance program in July 2003 with Krishna Bhima Samruddi Local Area Bank.
Training and Consultancy.
The ratio of extension worker:farmers is very less, i.e., 1:1000. In this case, it is very difficult for the
government to provide timely information to farmers. It is praiseworthy that many banks have
volunteered to train their officers regarding farm practices, which in turn help farmers.
New Models in Banking

HDFC Bank and NAFED
HDFC Bank and National Agricultural Cooperative Marketing Federation of India Ltd.(NAFED) have
entered into an agreement to provide finance to cooperatives associated with the Agri Marketing
Federation. The scheme will be formally launched during the Rabi season of the current year 2005-06.
In this case, HDFC Bank will provide loan while NAFED will act as a facilitator. Under the funding
scheme, immediate financing to the extent of a maximum of 70% of the requirement will be extended to
the farmers against the deposit of agricultural stock.
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Table 1: No. of Kisan Credit Cards Issued and Amount Sanctioned
Agency Cumulative progress upto September 2009
Card Issued Share (%) Amount Sanctioned

(in Lakhs) (Rs. Cr)
64.69 40333.01
Cooperative 175.85
Bank
7.79 5211.43
RRBs 21.20
Commercial 27.52 18521.13

Bank 74.76
TOTAL 271.81 100.0 64065.57
First National Spot Exchange for Farm Produce

On February 10, 2005, the Government of India announced the setting up of the National Spot
Exchange for Agriculture Produce (NSEAP), which will link all agri- produce marketing committees with
consumers and producers. The electronic exchange will enable agro-based industries to sell farm
produce more effectively. This will help farmers sell their produce at better rates and directly to
corporates.
22
Facilities provided by banks towards agriculture
Farm Insurance
Farm insurance can be provided to cover a number of situations to minimise the risk to the farm
business. Insurance cover is available for buildings and contents, farm property and machinery, theft,
business interruption, business liability, machinery breakdown, road transit and farm motor insurance.
Crop insurance is also valuable to farm businesses. It provides income protection if crops are damaged
natural circumstances (for example, fire or hail) and additionally provides cover for other crop-related
incidents including reducing excess crops, revision of crop yield or agreed value of crop, and deferred
payments. Generally, banks offer farm-related insurance products in partnership with an insurance
company.
Farm succession planning
A number of banks offer specialist farm succession planning advice. These specialists provide advice
around how to best manage the transfer of the farm between generations, or within generations.
Financial planning
A number of banks offer financial planning advice for farmers. These specialists provide advice on
retirement planning, off-farm investment, superannuation, Estate Planning and Income Protection
Insurance. It is important for farmers to recognise that their personal and business risk profiles differ
from many other sectors in the community, so it is important that any advice provider is suitably
qualified.
Price risk management solutions
Commodity price hedging allows agribusinesses to reduce their exposure to fluctuating commodity
prices. Commodity hedging usually works by fixing a price, range of prices, or set a price floor/ceiling
up to three years in advance for the particular commodity. By utilising risk management solutions such
23
as hedging, farmers can forecast and budget with greater accuracy and improve and control what
would otherwise be fluctuating margins.
24
Indicators Risks and

Means Assumptions
Results
Strategies of
Verificatio
n
25
Objectives/ Impact
1. To increase the 1. The annual 1. CBS (National 1. According
1.To contribute to agricultural growth rate of Account Statics) to priority to
the national objective productivity through GDP in agriculture 2. MoAC agriculture
of high and broad commercialization of sector to reach (Statiscal sector will
based economic agricultural and minimum of 3.9% Information continue in
growth, food livestock production, 2. The ratio of food on Nepalese terms of
security, and development of grain crops to be agriculture) increased
employment rural infrastructure reduced from 3. Reports level of
generation and 2. To enhance the current? % and to publication of investment.
poverty reduction competitiveness of have Directorates of 2. Extension of
through the livestock corresponding Agri Business irrigated area
modernization and products through increase in the promotion and by DoI and
commercializat improving/ ratio of cash Marketing reliable supply
ion of facilitating the crops, fruits, Development of irrigation
agriculture. availability of vegetables, meat, 4. Reports/ water.
2. To help livestock of milk products and Publication 3. Prices of agri
increase the improved breeds, as fisheries. s of FNCCI commodity in
agricultural well as through 3. The volume of 5. Reports of Nepal national
productio reducing the import of Rastria international
n and costs of agricultural Bank the
productivi production of goods to be 6. Economic Survey comparative
ty of livestock reduced by ? % advantage of
agricultural products. from th base the
livestock 3. To enhance the year 2009/010 commercial
and fishery effectiveness of 4. Increase in foreign crops.
products quality tests, exchange earning 4. Weather
,and thereby monitoring and from the export of condition on
raise farm regulation of food agricultural an average
income and agricultural and commodities in will remain
livestock products. comparison to favorable
4. To emphasize the the base year
conservation, 2009/010
promotion and 5. Increase in capital
sustainable production and
utilization of consumption of
agricultural bio- agricultural
diversity through and livestock
development and products to
dissemination of be increased in
environmental comparison to
friendly technologies the base year
(to be suitable also 2009/010.
under the climatic 6. Increase in
changed and income of farm
conditions also householders
keeping in view the
impact of global
climatic change)
5. To encourage the
organic farming of
potential
agricultural
commodities for
export markets.
26
Indicators Risks and

Means Assumptions
Results
Strategies of
Verificatio
n
27
Appendix-2
Means of Risks and

Results Indicators Ba Ta
seli rg Verification Assumption
ne ets
1. Overall Increa • MoAC • Reliable
production se in statistical irrigation will be
of produc 776200 9633000 information on
tion available from
commercial mt mt Nepalese
of : development
and Agriculture
? ? and
subsistent Foo
• Annual reports of rehabilitation of
260000 377000
crops and d MoAC
mt DoI irrigation
livestock 705000
grain • Annual report of systems.
products 775000 DoA
2459000
s mt • Weather
increased. mt
Puls 2757000 condition will
3001000
mt remain
es mt
3601000 favorable
Fruit 276445
mt • Agriculture
mt
s 374695 sector will be
?
Pot mt accorded
1496000 priority through
ato
2. Per • • MoAC reports • Reliable

capita Increase irrigation will be
productio • CBS publication
in per available from
n and capita • Annual reports of development
consump consum DoA and DoLs and
tion of ption of: rehabilitation of
• Special
Survey DoI irrigation
food • Food grain
reports systems.
crops, crops
livestock • Weather
• Fruits condition will
and remain
• Vegetables
fishery favorable
products • Fishery
• Agriculture
increase • Livestock sector will be
d. Pr accorded
od priority through
uc enhanced level
ts of investment
Appendix-2
3. Self- Increase in • MoAC reports of • Adequate price

sufficiency in production concerned incentive will be
production of : 17658mt ? industries provided by the
of raw Jute 59mt 100mt • Progress reports of concerned
materials DoA industries.
Lint Cotton 2354412mt 3237773m
for agro-
Sugar • Special Study
industries ? ? • The industrial raw
reports
attained. Cane material will enjoy
comparative
Tobacco 23030mt ? advantage vis-a-
Cocoon ? 85000mt vis other alternative
Hybrid 190409 190409 cros.
maize Oil 267.5 ? • Weather condition

will remain
Seeds
favorable
Coffee
Self-
sufficiency
levels of
concerned
industries.
4. Production • Volume of • DADOs reports • Necessary budget

and production of will be available to
Supply of • Progress reports of
key production the public sector
key AICL and NSCL
inputs. agencies concerned
production • Field visits with supply of
inputs • Status of
• Media reports production inputs
related to availability use
crops- and of key • Private sector
livestock production concerned
and inputs. agencies will
fishery participate
assured to effectively
match
with the
farmers
needs.
Appendix-2
5. Improved • New • Progress reports of • Necessary

technologies technologies DFTQC co-
in quality developed operation
• Progress Reports of
standardizati of the
• Status of NARC.
on of agro- concerned
use of
industrial • Reports of agro-
improved
products of concerned industries
technologie
crops industries and
s in quality
livestock traders will
control • Market survey
developed be
and • Quality of Site visits of the agro available.
Promoted food in the –industries
• Consumers
food quality market
preference
in the market
• Consumers for quality
improved
Satisfaction products
will be
enhanced
6. Value addition • Extent of • Progress

in reduction of reports of
agricultural, post- harvest Directorate of P
livestock and losses Business ri
fishery promotion v
• Extent of
products and marketing a
value
increased t
addition to Development
through e
the primary
improvement • Progress
agriculture s
in reports of
and e
storage, DoA
livestock c
processing products. • Reports of t
and other Directorate o
• Increase in
post- harvest of post- r
storage
operations Harvest s
capacity
• Manageme p
nt a
Increas rt
• Special
e in Study ic
volume Report i
of s. p
proces a
sed ti
product o
s. n
Appendix-2
7. WTO standard • Status of • Reports • There will be legal

followed in import compliance with publications of bindings to follow the
and export of WTO standard FNCCI WTO standard
agro- products. • Reports of NRB
• Co-operation from
the entities involved
in export/ import
business will be
available
8. Foreign • Increase in value • Reports of NRB • The Nepalese

Exchange of export • Economic Survey products will enjoy
earning/saving Reports comparative
• Reduction in
increased(throu • CBS (National advantage in
value of import
g h increased Account Sastics) • domestic and export
export and • MoAC statistical markets
reduced import information • WTO standard will
• Special Study be enforced
Reports. • The entity involved in
export business will
enjoy conducive
environment for
export.
• No. of Special • Progress reports of • Co-operation from

varieties conserved. DoA and CDD NAARC will be
9. Agricultural bio-
• Status of utilization available.
diversities • Field observation
of the conserved
conserved and site visits
species/ varieties
AgriCapital Corporation was founded in 1983 as a specialized firm to meet the acute
and increasingly specialized investment banking demands of a rapidly changing
agribusiness industry.
Since our founding, we have undertaken over 470 assignments on behalf of almost
300 clients across the spectrum of agribusiness in the United States and around the
world.
Agribusiness is a unique and complex segment of the world economy. By

specializing in this one segment, AgriCapital has developed a strategic
understanding of agribusiness and its nuances that enables it to evaluate its clients'
more accurately needs. Its staff keeps abreast of changes in the industry and
maintains personal contact with an extensive network of industry participants.
Agribusiness has traditionally been short of capital, and this shortage is being
aggravated by the acute challenges the industry is now facing. Many companies
need to access fresh capital to implement their plans for growth, while others need to
reduce leverage by restructuring their balance sheets.
AgriCapital is a leading M & A firm for agribusiness companies. We are experts at

evaluating the potential paths a company might take, at finding appropriate partners,
and at structuring fair and viable deals. In any transaction, we protect our client's
interest by rigidly adhering to a code of ethics where we represent the interest of only
one side.
INDIAN BANKS INVOLVED IN AGRICULTURAL BANKING BUSINESS

National Bank of Agriculture and Rural Development (NABARD)

was set up on July 12, 1982 under Act of parliament as a central or apex institutions
for financing agricultural and rural sectors.
National Bank for Agriculture and Rural Development (NABARD) is an apex

development bank in India. It has been accredited with “matters concerning policy,
planning and operations in the field of credit for agriculture and other economic
activities in rural areas in India”.
NABARD was established by an act of Parliament on 12 July 1982 to implement the

National Bank for Agriculture and Rural Development Act 1981. It replaced the
Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of
Reserve Bank of India and Agricultural Refinance and Development Corporation
(ARDC). It is one of the premiere agencies to provide credit in rural areas.
NABARD is set up as an apex Development Bank with a mandate for facilitating

credit flow for promotion and development of agriculture, small-scale industries,
cottage and village industries, handicrafts and other rural crafts. It also has the
mandate to support all other allied economic activities in rural areas, promote
integrated and sustainable rural development and secure prosperity of rural areas. It
provides short term finance assistance for period of 18 months to state co-operative
banks, commercial banks, RRBs, and so on for wide range of activities in the areas
of production, trading, marketing and storage. It also gives loans up to 20 years of
maturity to the state government to enable them to subscribe to the share capital of
co-operative credit societies.
NABARD’s refinance is available to State Co-operative Agriculture and Rural

Development Banks (SCARDBs), State Co-operative Banks (SCBs), Regional Rural
Banks (RRBs), Commercial Banks (CBs) and other financial institutions approved by
RBI. While the ultimate beneficiaries of investment credit can be individuals,
partnership concerns, companies, State-owned corporations or co-operative
societies, production credit is generally given to individuals.
NABARD provides:
1. Long term finance for minor irrigation facilities, plantations, horticulture, land
development, farm mechanizations, animal husbandry, fisheries etc.
2. Short term loan assistance fir financing of seasonal agricultural operations,
marketing of crops, purchase/procurement/distribution of agricultural inputs
etc.
3. Medium loan facilities for approved agricultural purposes;
4. Working capital refinance for handloom weavers
5. Refinance for financing government- sponsored programmes such as IRDP,
Rozgar Yogna etc.
Besides this pivotal role, NABARD also:
1. Acts as a coordinator in the operations of rural credit institutions

2. Extends assistance to the government, the Reserve Bank of India and other
organizations in matters relating to rural development
3. Offers training and research facilities for banks, cooperatives and
organizations working in the field of rural development
4. Helps the state governments in reaching their targets of providing assistance
to eligible institutions in agriculture and rural development
Acts as regulator for cooperative banks and RRBs
General aspects of NABARD:
1. NABARD should not resort to passive funding. NABARD has to make things
happen by organizing people and providing knowledge.
2. The strength of NABARD is its good networking capabilities. It can act as a
coordinating agency for all the developmental works taking place at the grass
roots level.
3. The greatest comparative advantage of NABARD is its ability to
decontaminate the effects of subsidy and making public spending more
efficient.
4. It is a folly for NABARD to become a Commercial Bank. It is the only
institution which can handle public finance better than the government.
LATEST NEWS:
NABARD signs MoU with cooperative banks of Punjab for CBS
National Bank for Agriculture and Rural Development

today signed a MoU with all cooperative banks in Punjab
to launch core banking solution (CBS).
Under this unique pan-India project, National Bank for

Agriculture and Rural Development (NABARD) had
sought the willingness of State Cooperative Bank (SCB)
at the state level and District Central Cooperative Banks
(DCCBs) at the district level under the Short Term
Cooperative Credit Structure (STCCS) to join the project
by executing a Memorandum of Understanding (MoU)
with NABARD.
The project covers application software, maintenance of data centre, disaster

recovery centre, related network connection and regular maintenance and support of
hardware and software.
This arrangement made under the project will go a long way to bring the functioning
of Cooperative Banks at par with Commercial Banks and Regional Rural Banks in
Punjab, a press release issued here said.
On behalf of NABARD, SC Kaushik, Chief General Manager signed the

memorandum. GS Mangat, Managing Director, Punjab State Cooperative Bank and
respective CEOs of District Central Cooperative Banks (DCCBs) were signatories on
behalf of the Cooperative Banks of Punjab.
Important Initiatives by NABARD:
1. Preparing Institution Specific Development Action Plans (DAPs) and entering

into MoUs with Cooperative Banks and RRBs ;
2. Facilitating State-specific reform packages for Cooperative Banks;
3. Introduction and popularisation of Kisan Credit Card Scheme ;
4. Support for women entrepreneurs and addressing gender issues in credit
Assistance for environmental awareness/protection
Support for Agri business, Agri-clinic and extension activities. ..
Standard Bank has provided financial services to the agricultural

sector for over 140 years. We are committed to the development of agriculture and
to adding value to your farming business. We have a range of specialised products
and services, including the support of our agricultural advisors and business
managers.
We believe that you should expect more than just banking products from your bank.
This is why we have a team of agricultural specialists to advise you on a range of
areas related to your agricultural business. Although most of the products are
available to all clients, our business will mostly focus on Agricultural clients who visit
the site. These include savings and investment products, as well as short, medium
and long term loans
Benefits
1. Create expansion capacity for the farmer; he does not have to use his
own funds.
2. The agricultural business manager or a specialized banker with a
sound knowledge of agriculture, manages the relationship between the
bank and the client.
3. Agricultural advisers give advice on Business banking, compilation of
comprehensive agricultural reports, and also advice on strategic
planning and expansion programs..
YES BANK aims to be a dominant player in the Food and

Agribusiness (F&A) sector by providing professional, end-to-end financial solutions
to stakeholders across the entire agricultural value chain. A specialized "Food and
Agribusiness Advisory and Research" (FASAR) division has been domiciled within
the Development and Knowledge Banking Group at YES BANK. The division houses
industry practitioners with relevant experience and expertise in key sectors of the
Agri-value-chain. They provide sectoral knowledge on industry trends and enhance
growth prospects in the Agribusiness sector.
YES BANK has committed to the cause of bridging the infrastructure and
Knowledge gaps, that still exist in the agribusiness sector. This has been actualised
through orchestrating some path-breaking initiatives such as the development of the
first“Integrated Agri Food Park” in the state of Andhra Pradesh and other
locations in South India, in association with Indu Projects Ltd.
YES BANK has successfully completed a prestigious assignment for Union

Ministry of Agriculture, Govt. of India to establish “Modern Terminal Market
Complexes”for agricultural perishables. A Model Concession Agreement has
been prepared which is the first focussed project finance documet for enabling PPP
in the agriculture sector. The project will be implemented in several states by
respective state governments.
We have a strategic partnership with NABARD Consultancy

(NABCONS) for joint strategic advisory assignments in the areas of Food &
Agribusiness, Agri-Infrastructure etc. FASAR has also been providing strategic
advisory to various companies in the Food & Agribusiness sector along with
assisting them in their international forays. Through these efforts, we have achieved
a key knowledge and thought leadership position amongst stakeholders in this highly
important sector of the Indian economy.
LATEST INFORMATION:
Yes Bank to launch India's First Food, Agribusiness Fund
Yes Bank is set to launch first of its kind private equity fund in India for the rapidly
growing Food and Agribusiness.
"The USD 75 to USD 100 million Food and Agribusiness (Private Equity) Fund will
invest in the companies operating in the Food/ Agri related sectors with an aim to
capitalize on their growth potential," a Yes Bank official told PTI.
The new fund will be looking to invest in companies engaged in farm imports to
food retailing and these firms could be in business of organic food, ready to eat food
as well as other food categories.
"Investors in the fund could be a prudent combination of financial institutions, Indian

public sector banks, multilateral institutions, developmental agencies and corporates
with interest in food and agri business," the Yes Bank official added.
As a first step the bank has appointed Sonal Shah as Senior Director- Agribusiness
Funds Management, a release from Yes Bank Said. Prior to joining Yes Bank, Sonal
was with DSP Merrill Lynch India as Senior Vice President and Head of Equities
Research- Mid Caps.
"Sonal Shah will be responsible for setting up and managing the Food and
Agribusiness Fund. Sonal will be involved in all activities of the fund including, raising
funds, identifying and investing in suitable companies amongst others, it said.
Shah will be based in the Northern Region Headquarters at New Delhi.
Food and Agribusiness - Key Knowledge Initiatives undertaken by FASAR
To actualize its focus and commitment for the holistic development of the Food and
Agribusiness sector, a specialized "Food and Agribusiness Advisory and Research"
(FASAR) division has been domiciled within the Development and Knowledge
Banking department at YES BANK. The division houses industry practitioners with
relevant experience and expertise in key sectors of the Agri-value-chain and has
been involved in the conceptualization and implementation of some path breaking
projects and knowledge initiatives for both Government as well as Corporate
clientele in the Agribusiness sector. A gist of the same has been summarized below
1. Key Government assignments in the Food & Agri sector
1. Government of Maharashtra
YES BANK has been appointed as the Consultant by the Govt. of Maharashtra for
selection of private enterprises for setting up of Modern Terminal Market Complex for
perishables at Mumbai (Thane).
1. Government of Union Territory of Chandigarh
YES BANK has been appointed as the Consultant by the Govt. of Union Territory of
Chandigarh for selection of private enterprises for setting up of Modern Terminal
Market Complex for perishables at Chandigarh.
1. Government of Orissa
YES BANK has been appointed as the Consultant by the Govt. of Orissa for
selection of private enterprises for setting up of Modern Terminal Market Complex for
perishables at Sambalpur .
1. Ministry of Agriculture
YES BANK has been appointed as National Consultant by the Central Committee
set up by the Union Ministry of Agriculture for developing the framework for selection
of private enterprises for setting up of Modern Terminal Market Complexes for
perishables at important urban centers across the country Prior to this, YES BANK
was mandated by the National Institute of Agricultural Marketing (NIAM) to structure
the “Optimal Operational and Ownership model of the Modern Terminal Markets”
project being spearheaded by the Ministry of Agriculture .
1. Ministry of Commerce, Agricultural and Processed Food Products

Export Development Authority (APEDA)
 YES BANK was awarded a prestigious assignment on “Rationalization and

streamlining of existing procedures and documentation in export of agricultural
produce” by APEDA The report was highly appreciated by the inter-ministerial group
setup by the PMO and YES BANK was subsequently awarded another assignment
on “Restructuring of APEDA” in order to confirm to the proposed APEDA
Amendment Bill 2007
1. The assignment involves global benchmarking so as to migrate

successful examples of export restructuring and related infrastructure
planning and human resource development to the Indian context
YES BANK has been recently awarded a prestigious assignment on “Fast track
development of Agricultural Export Zones (AEZ’s) through PPP in the country” by
APEDA
1. Government of Rajasthan
1. Modern Terminal Market at Jaipur.
1. Government of Punjab
YES BANK has been appointed as consultant for selection of private enterprises
for setting up of Modern Terminal Market Complexes in Punjab.
1. Government of Orissa
YES BANK has been appointed as consultant for preparation of Detailed Project
Reports for setting up of Modern Terminal Markets at Cuttak & Berhampur.
1. Government of Haryana
YES BANK has been mandated by The Haryana State Co-operative Supply &
Marketing Federation Limited (HAFED) for preparation of Long Term Vision and
Comprehensive Business Plan.
2. International & National Partnerships
 YES BANK has secured a strategic alliance with Alterra, a leading international
knowledge institution and part of Wageningen University Research Centre,
Netherlands.
The key objective behind this partnership is to achieve successful implementation of
the unique Integrated Agri Food Park concept in India wherein high-tech Agri
production, processing and logistics would be integrated in a manner that ensures
the creation of an efficient, effective and environment friendly business models
 MoU with NABARD Consultancy (NABCONS) for carrying out jointly strategic
advisory assignments in the areas of Food & Agribusiness, Agri-Infrastructure etc.
MoU with National Institute of Agricultural Marketing (Ministry of Agriculture,
Government of India) for undertaking strategic advisory and consultancy
 MoU with National Institute of Agricultural Marketing (Ministry of Agriculture,

Government of India) for undertaking strategic advisory and consultancy.
3. Knowledge Reports
We have released various knowledge reports during the important occasions and the
same have been appreciated by various stake holders, a gist of the same is captured
below:
1. Indian Tea Industry – The Next Frontier, November 2007 – This report was
released in association with Indian Tea Association at India International Tea
Convention held at Guwahati.
2. Rural Retail-The Next Phase in Retailing, September, 2007- This report
was released at the CII-“Conference on Rural Retail-The Next Phase in

Retailing” held at New Delhi.
3. Agribusiness in Gujarat: Unleashing the potential, November, 2006 – This
report focussing on the Agribusiness opportunities in Gujarat, with emphasis
on Food Processing was released during the Agri Fare 2006 by the
Honourable Minister for Science & Technology Dr.Jiang Hesheng, Guangxi
Autonomous Province, Republic of China
4. Indian Agriculture: Winds of Change, October, 2006 – This report was
launched by the Honourable Prime Minister, Dr. Manmohan Singh during
the Agri Summit 2006.
5. Bio-Diesel: An Insight into Green Gold, June, 2006 – This report was
released at the CII - “International Conference on Biofuels” held at
Hyderabad.
6. Indo-Israel Partnership: The Agribusiness Opportunity, April, 2006 – This
report was launched by the Honourable Minister for Agriculture,
Mr.Sharad Pawar in Israel during the Agri-Tech 2006.
India's Yes Bank boosts agribusiness
Agribusiness in India will get a boost from the partnership. India’s Yes Bank is
expanding its agribusiness by partnering with the country’s National Collateral
Management Services (NCMS).
The partnership will see Yes Bank use NCMS for collateral management and
warehousing services.
Specifically, the services will target the financing market for traders’ and farmers’
supply chains from pre-harvest to the marketing and export stages.
Furthermore, working capital financing in commodities, especially agribusiness, will

be given more of a focus.
“Food and agribusiness and agri-infrastructure have been key focus areas
and I truly believe that this partnership with NCMS will further deliver value to all our
stakeholders and is in accordance with the bank’s development banking philosophy,”
says Rana Kapoor, managing director and chief executive officer of Yes Bank.
“Given the excellent and demonstrated track record of NCMS, this partnership
will enable us to mitigate credit risk for our commodity finance product offerings,”
Kapoor continues.Yes Bank’s partnership with NCMS sees the bank holding a stake
in the collateral management firm, as well as fully underwriting long-term funding
requirements of NCMS to add warehousing capacity across India.
Sanjay Kaul, managing director and chief executive officer of NCMS, notes:
“We are confident that this arrangement will result in substantial new business
across India. This new arrangement with Yes Bank will provide an opportunity to field
functionaries to extend finance against warehouse receipts.”
HDFC Bank, as a leading Indian private sector bank, is fully committed to ensure
that the benefits of world-class banking reach all sectors of the country, particularly
in the rural areas and in the agriculture sector.
The bank provides need-based agricultural loans of varying tenors to all credit
worthy clients engaged in farming of staple as well as cash crops, horticulture,
plantations, poultry, animal husbandry, dairying, seeds, warehousing, etc. The bank
also finances the supplies of a wide range of agri inputs like seeds, fertilisers,
pesticides and micro irrigation tools. The bank has identified transportation, storage
and processing of food and other agri commodities as a thrust area and is offering
working capital and term loans of varying tenors to eligible processors, based on not
only their financials but also on the strengths of underlying commodities. In this
manner, the bank facilitates the food chain from the "farm gate to the food plate".
The bank is expanding its rural presence rapidly in order to deliver these products
effectively at the doorsteps of their valued customers, at affordable prices.
With the main

objective of providing institutional credit for enhancing the production and

productivity of the agricultural sector in the country, the Agricultural Development
Bank, Nepal was established in 1968 under the ADBN Act 1967, as successor to the
cooperative Bank. The Land Reform Savings Corporation was merged with ADBN in
1973.
According to the plans mentioned in the budget document, the

funding support would be for enhancement of coastal protection and management,
women empowerment, poverty alleviation, improvement in water supply and
distribution and projects involving irrigation and farm land development among
others.
According to the plans mentioned in the budget document, the funding support would
be used to implement various important development projects. These include plans
for enhancement of coastal protection and management, women empowerment,
poverty alleviation, improvement in water supply and distribution and projects
involving irrigation and farm land development among others.
The Asian Development Bank (ADB) will provide loans for the ambitious coastal
protection and management plan (CPMP) and another one for improving basic
facilities for farming business. The CPMP project will focus devising long term
solutions for protecting coastal environments in the state from global warming
impacts. It will also involve measures to upgrade quality of life for coastal
communities. The entire project is worth Rs72 crore. For 2011-12, the government
has budgeted an expenditure of Rs 46 crore towards the project. Of this, Rs 32 crore
will be raised through the ADB loan, Rs 14 crore will be contributed from the state
treasury
The agriculture sector is the core of India’s Tenth five year plan(2002-2007).the
plan notes the achievements of the food security perspective that guided agriculture
sector policies and programs for three decades, but suggests that the true potential
of Indian agriculture will be realized only with diversification of agricultural products.
Agricultural production and linked processing, distribution, trade, financial, and
commercial activities have a large potential for sustaining the demand for labor,
improving the quality of employment, and meeting the consumption needs of a
growing population. The Government's economic objectives place emphasis on
generating gainful employment in agriculture. Food processing is seen as an

important employment-generating activity. However, its success is linked to close
integration of the value chain, including production, manufacturing, distribution, and
wholesale and retail sales of agricultural commodities. It is clear that more efficient
outcomes can generally be achieved if the private sector is involved in developing
market-driven opportunities. Ongoing reforms recognize the need for participation of
the private and cooperative sectors in agricultural marketing. At the same time,
complementary public investments are needed to correct market failures and
efficiently provide core-public goods.
-----------------------------------------------
Export-Import Bank of India- Agri Business Group

The EXIM bank of India was estd. by Govt. of India to provide financial assistance to
exporters and importers,and for functioning as the principal financial institution for
coordinating the working of institutions engaged in financing export and import of
goods and services with a view to promoting the country’s international trade.
It is further classified into Operating Groups namely :-

1.Corporate Banking Group, which handles a variety of financing programmes for

Export Oriented Units (EOUs), Importers, and overseas investment by Indian
companies.
2.Project Finance / Trade Finance Group handles the entire range of export credit
services such as supplier's credit, pre-shipment credit, buyer's credit, finance for
export of projects & consultancy services, guarantees, forfeiting etc.
3.Lines of Credit Group Lines of Credit (LOC) is a financing mechanism that

provides a safe mode of non-recourse financing option to Indian exporters,
especially to SMEs, and serves as an effective market entry tool.
4.Agri Business Group, to spearhead the initiative to promote and support Agri-
exports. The Group handles projects and export transactions in the agricultural
sector for financing.
5.Small and Medium Enterprises Group to the specific financing requirements of

export oriented SMEs. The group handles credit proposals from SMEs under various
lending programmes of the Bank.
6.Export Services Group offers variety of advisory and value-added information

services aimed at investment promotion
7.Fee based Export Marketing Services Bank offers assistance to Indian

companies, to enable them establish their products in overseas markets.
8.Support Services groups, which include: Research & Planning, Corporate

Finance, Loan Recovery, Internal Audit, Management Information Services,
Information Technology, Legal, Human Resources Management and Corporate
Affairs.
Some of the Agri Business related Schemes run by EXIM Bank:

The Indian agri sector can avail of a comprehensive range of products and services
that Exim Bank offers. Broadly, these can be classified into three categories:
1. Export Credit
Exim Bank provides pre shipment and post shipment credit in Indian rupees and
foreign currency. Finance is extended for short term i.e. upto 6 months as also for
medium/long term i.e. beyond 6 months for eligible products and projects.
Medium/long term export credit is extended by way of supplier's credits i.e. through
the Indian exporter with recourse to the exporter or buyer's credits i.e. directly to the
overseas buyer with no recourse to the Indian exporter. Certain RBI guidelines apply
for such medium/long term export credit. Exim Bank has been recently permitted by
RBI to cover inter alia agricultural commodities and processed foods under the Lines
of Credit. Export contracts under Lines of Credits are financed without recourse to
the exporter i.e. off balance sheet finance whilst the importer gets credit. Exim Bank
extends loans for executing deemed export contracts. Exim Bank also issues
guarantees overseas on behalf of Indian exporters.
2. Finance for Export Oriented Companies

Exim Bank also offers loans for financing Export Oriented Companies which may be
categorized as under:
i. Project Finance
􀂃Finance for new projects, expansion, and modernization projects.

􀂃Finance for purchase of equipment both imported as well as indigenous.
􀂃Working Capital both short term as well as medium term.
ii. Overseas Investment Finance
Overseas investment by Indian companies may be in the form of Joint Ventures

(JVs) or Wholly Owned Subsidiaries (WOS). Exim Bank extends term loans against
equity contribution/loan extended by Indian companies to their JVs/WOS. Term
finance is provided directly to the JVs/WOS with corporate guarantee of the Indian
promoter companies. Exim Bank can also participate in the equity of the overseas
JV/WOS of the Indian company selectively subject to certain conditions.
iii. Special Programmes
o Export Marketing Finance (Finance for developing strategic forward linkages):

Term loans are extended to important strategic marketing plan covering inter alia,
overseas market research, participating in international trade fairs, promotion of
product, brand positioning, international quality certification, mirror product
adaptation, pre-operative expenses for overseas offices, prospective buyers visits to
India, etc.
o Export Product Development: Term Loan for product adaptation, pilot plants,
product/process development, etc.
o Backward Linkage/ Vendor Development Programme: The Export Vendor
Development Programme aims to support development of backward linkages by
exporters. Rupee term finance is available on competitive terms to exporters for
implementing strategic vendor development plans i.e. backward linkage for
production of goods for exports in order to increase exports. Export/Trading Houses
or manufacturer-exporters with satisfactory track record and strategic plan for
development of backward linkages for exports are eligible to seek finance under this
programme. Exim Bank may provide farm finance to exporters entering into
backward linkages through contract farming with farmers on partnership basis for
exports.
o Finance for Research & Development: Exim Bank also provides lending for
Research & Development activities for facilitating exports.
3. Advisory Services
Exim Bank offers advisory services to Indian exporters for facilitating forward linkage
for agri exports. Exim Bank's international network comprising overseas office, co-
operation partners, correspondent banks and financial institutions is leveraged to
provide export information on:
o Overseas markets/market segments.

o Direct marketing of product.
o Overseas business opportunities.
o Information on export/import regulations, finance, etc
E-Choupal is an initiative of ITC Limited, a large multi

business conglomerate in India, to link directly with rural farmers via the Internet for
procurement of agricultural and aquaculture products like soybeans, wheat, coffee,
and prawns. e-Choupal was conceived to tackle the challenges posed by the unique
features of Indian agriculture, characterized by fragmented farms, weak
infrastructure and the involvement of numerous intermediaries. The programme
involves the installation of computers with Internet access in rural areas of India to
offer farmers up-to-date marketing and agricultural information.
Problems addressed
Traditionally, commodities were procured in mandis (major agricultural marketing

centres in rural areas of India), where the middleman used to make most of the
profit. These middlemen used unscientific and sometimes outright unfair means to
judge the quality of the product to set the price. The difference in price between good
quality and inferior quality was little, and therefore there was no incentive for the
farmers to invest and produce good quality output. With e-Choupal, the farmers have
a choice and the exploitative power of the middleman is neutralised.
Statement of a farmer who is a member of E-choupal: "Before ITC introduced us to

e-Choupal, we were restricted to selling our produce in the local mandi. We had to
go through middlemen and prices were low. ITC trained me to manage the Internet
kiosk and I became the e-Choupal Sanchalak in my village. Today we are a
community of e-farmers with access to daily prices of a variety of crops in India and
abroad – this helps us to get the best price. We can also find out about many other
important things – weather forecasts, the latest farming techniques, crop insurance,
etc. e-Choupal has not only changed the quality of our lives, but our entire outlook.
Effects of e-Choupal
ITC Limited has now provided computers and Internet access in rural areas across
several agricultural regions of the country, where the farmers can directly negotiate
the sale of their produce with ITC Limited. This online access enables farmers to
obtain information on mandi prices, and good farming practices, and to place orders
for agricultural inputs like seeds and fertilizers. This helps farmers improve the
quality of their products, and helps in obtaining a better price. Each ITC Limited kiosk
having Internet access is run by a sanchalak — a trained farmer. The computer is
housed in the sanchalak's house and is linked to the Internet via phone lines or by a
VSAT connection. Each installation serves an average of 600 farmers in the

surrounding ten villages within about a 5 km radius. The sanchalak bears some
operating cost but in return earns a service fee for the e-transactions done through
his e-Choupal. The warehouse hub is managed by the same traditional middle-men,
now called samyojaks, but with no exploitative power due to the reorganisation.
Indeed these middlemen make up for the lack of infrastructure and fulfill critical jobs
like cash disbursement, quantity aggregation and transportantion.
Since the introduction of e-Choupal services, farmers have seen a rise in their
income levels because of a rise in yields, improvement in quality of output, and a fall
in transaction costs. Even small farmers have gained from the initiative. Customized
and relevant knowledge is offered to the farmers despite heterogeneous cultures,
climates and scales of production. Farmers can get real-time information despite
their physical distance from the mandis. The system saves procurement costs for
ITC Limited. The farmers do not pay for the information and knowledge they get from
e-Choupals; the principle is to inform, empower and compete. At the same time ITC
Limited has obtained benefits from the programme:
1. elimination of non value added activities

2. differentiated product through identity preserved supply chains
3. value added products traceable to farm practices
4. e-market place for spot transactions and support services to futures exchange
There are presently 6,500 e-Choupals in operation. ITC Limited plans to scale up to
20,000 e-Choupals by 2012 covering 100,000 villages in 15 states, servicing 15
million farmers.
LATEST NEWS:
 Low local production pushes food prices up 10 Apr 2011 - 07:53
 Growing expense: Weather and fuel costs are driving up food prices 10 Apr
2011 - 06:32
 Pocono restaurants eat costs of rising food prices 10 Apr 2011 - 04:30
 Pocono restaurants eat costs of rising food prices 09 Apr 2011 - 17:29
 Survey Shows Food Prices Up 5 Percent In 2011 09 Apr 2011 - 15:10
 Red Plum Poll Reveals Rising Food and Gas Prices Lead to $20-50
Increased Weekly Spend 09 Apr 2011 - 14:28
 £13.7 billion price tag for uneaten food 09 Apr 2011 - 07:32
 Relief for consumers as food prices drop 09 Apr 2011 - 06:52
 Frodsham house prices already affected by wind farm proposals - claim
council 09 Apr 2011 - 05:31
 £13.7bn price tag for uneaten food 09 Apr 2011 - 03:32
 World food prices dipped in March 09 Apr 2011 - 02:53
 Global Food Prices Finally Drop 08 Apr 2011 - 23:40
 FAO: Food Prices Fall In March But Seen Rising Further 08 Apr 2011 - 23:39
 Survey: Retail food prices rose 5.2 percent in last three months 08 Apr 2011 -
22:56
 Prices go up for food items, survey says 08 Apr 2011 - 20:37
 Our rush to biofuels prices food staples out of reach in Africa 08 Apr 2011 -
19:01
 Summary Box: Corn reserves projected to hit 15 - year low, threatening higher
food prices 08 Apr 2011 - 19:00
 Summary Box: Corn reserves projected to hit 15-year low, threatening higher
food prices 08 Apr 2011 - 18:59
 Patients On Arvs Hard Hit By Drought, High Food Prices 08 Apr 2011 - 17:16
 Survey shows Wisconsin food prices up 5 percent in 2011 08 Apr 2011 -
16:30
India's Union Budget 2011 focuses on Food, Agriculture
Breaking News! Union Finance Minister Pranab Mukherjee presented the Union
Budget 2011 in Lok Sabha today. Pranab focused on Agriculture and
Production, while he also announced sops for the farmers.
1. The taxpayers did not get much benefit, as the Finance Minister increased the
tax exemption limit from Rs 1.6 lakh to Rs 1.8 lakh - a hike of just Rs 20,000.
There will be no new tax exemption limit for women. However, he announced
enhanced tax exemption for the senior citizens.
2. The senior citizens have been divided into two categories - 60 and above (it
was 65 earlier), 80 and above. While the exemption limit for the senior
citizens of 60 years and above will be Rs 2.5 lakh, the very senior citizens of
80 years and above will be given a tax exemption of Rs 5 lakh.
3. The ICDS (Integrated Child Development Scheme) workers and helpers have
reason to celebrate. The monthly salary of ICDS Workers has been increased
from Rs 1,500 to Rs 3,000 per month. The helpers will get Rs 1,500 per
month instead of Rs 750 per month.
4. Special attention was given to Agriculture, Food, Infrastructure, Education and

Health. The government tried to come up with measures to boost the
agriculture production in the country and give bigger benefits to the farmers.

Agriculture/Food Production:
1. Rs 300 crore for improving Dal production
2. Stress on vegetable production in urban areas

3. 3% interest subsidy to farmers in FY2012
4. 15 mega food parks to be set up
5. Increase in credit flow for the farmers
6. Rs 5,000 crore to be provided to SIDBI for refinancing incremental lending by

banks
7. Rs 3,000 crore to be provided to NABARD to provide support to handloom

weaver co-operative societies
8. Banks to be asked to increase lending to the farmers
9. Rs 4.75 lakh crore package for the farmers
10. Private investment in agro processing industries to be increased
11. 40 lakh tonnes storage capacity by FY 2012
12. 24 new cold storage projects sanctioned
13. Infrastructure status to cold storage chains
14. National Food Security Bill to be introduced in Parliament this year
15. Rs 6,000 cr will be given to public sector banks to maintain capital-to-risk assets
ratio norms
16. To provide Rs 201.5 billion capital infusion in state-run banks in 2011-12 and
Rs 3 billion for 60,000 hectares under palm oil plantation.
Major focus on:

* Removal of supply bottlenecks in the food sector will be in focus in 2011-12
* Agriculture growth key to development: Green Revolution waiting to happen in
eastern region.
* To raise target of credit flow to agriculture sector to 4.75 trillion rupees
* Gives 3 percent interest subsidy to farmers in 2011-12
* Cold storage chains to be given infrastructure status
* Capitalisation of National Bank for Agriculture and Rural Development (NABARD)
of 30 billion rupees in a phased manner
* To provide 3 billion rupees for 60,000 hectares under palm oil plantation
* Actively considering new fertiliser policy for urea
* Food storage capacity to be augmented - 15 more mega food parks to be set up in
2011-12; of 30 sanctioned in previous fiscal, 15 set up.
Karnataka budget 2011 favours agriculture
Karnataka Chief Minister BS Yeddyurappa tabled Agriculture Budget 2011 in state

Assembly on Thursday, Feb 24. He proposed to provide crop loans at a 1 per cent
interest rate and earmarked Rs 17,857 crore for agriculture, allied and irrigation
sector development.
He said the rate of interest on crop loans of up to Rs 3 lakh from cooperative

institutions would be reduced from 3 per cent to 1 per cent.
In addition, an amount of Rs 1,000 crore would be provided for development of 10

lakh farmer's families under the ''Suvarna Bhoomi Yojana'' scheme, Rs 200 crore for
organic farming and Rs 125crore for promotion of bio-fuels, he said.
Agriculture sector set to post higher growth

India's agricultural sector, often branded as a laggard, has come to the economy`s
rescue.
The government's statistical office is expected to peg gross domestic product at

8.5% for the current financial year in the advance estimates that are due to be
released on Monday. This reflects a mild slowdown from the 8.9% growth registered
during the first half of 2010-11. During the last financial year, the economy had
grown by 8%.
The growth will be powered by the farm sector. Helped by abundant rains this
monsoon, the agriculture sector that now accounts for less than one-fifth of the
economy, is expected to expand by 6-6.5% according to the first official estimates.
According to sources, per capita income is likely to grow at around 6.5-7% during
2010-11.
Manufacturing sector, seen as the main job creator, is also going to be the biggest
worry for policymakers with the sector showing signs of slowdown as inflation, and
the subsequent increase in interest rates, is affecting capacity addition in the sector.
The first estimates of GDP would be revised in May and again next January.
The advance estimates of GDP are near the levels announced by finance minister
Pranab Mukherjee but lower than what has been projected by several agencies
including the Reserve Bank of India . In its latest monetary policy review, RBI had
retained its earlier projection of 8.5% with the possibility of an upward bias.
The Prime Minister's Economic Advisory Council headed by C Rangarajan and the
Asian Development Bank had estimated that the Indian economy would expand by
8.5% this year.
Microfinance in India
Microfinance is the provision of financial services to low-income clients or solidarity
lending groups including consumers and the self-employed, who traditionally lack
access to banking and related services.
LATEST INFORMATION:
The Reserve Bank has constituted an Advisory Committee on flow of credit to

agriculture and related activities from the banking system under the chairmanship of
noted economist, Prof. V.S. Vyas. The Committee is required to submit its report by
April 2004. The Terms of Reference of the Committee are as under :
1.To assess the progress made in implementation of the recommendations of the

Expert Committee on Rural Credit (Vyas Committee) appointed by NABARD in
August 2000.
2.To suggest measures to reduce the rate of interest on agriculture credit given by
Commercial, Cooperative and Regional Rural Banks;
3.To examine the role of NABARD as the apex institution for providing and regulating
credit for the promotion and development of agriculture and the role of Regional
Rural Banks (RRBs) in purveying agricultural credit and suggest measures for
improving the same without sacrificing overall viability considerations;
4.To study the role and effectiveness of the RIDF mechanism and suggest ways to
improve the same, or to suggest alternatives, with a view to increase direct
agriculture lending;
5.To identify the impediments in the flow of credit to the disadvantaged sections such
as small and marginal farmers, tenant farmers, oral lessees and landless labourers
and suggest measures to be taken by banks for providing financial assistance to
them;
6.To suggest short-term and medium-term measures to improve the flow of credit to
agriculture, with particular emphasis on direct financing of farmers based on linkages
for supply of inputs and sale of outputs and institutional and procedural
arrangements required therefor;
7.scope for involving innovative location-specific catalytic agents to bridge the gap
between the demand and supply of timely credit in rural areas;
8.the problems faced by banks in extending their outreach;
9.the need to modify the Service Area Approach; and
10.feasibility for harnessing new technological developments in smoothening the

process of credit delivery to the rural and agricultural sector.
11.To study the role of micro finance in poverty alleviation and adoption of the Self
Help Group (SHG) approach in extending banks' outreach to the disadvantaged
sectors.
12.To examine the need to regulate micro finance institutions and to suggest
appropriate regulatory model.
13.To examine the norms relating to NPAs in cases of crop failure where seasonality
and uncertainty are not captured.
Glossary of Acronyms and Abbreviations used in the Agriculture Industry,

worldwide.
AGDP - Gross Domestic Product From Agriculture

Ant. - Anticipated
APL - Above Poverty Line
BE - Budget Estimates
BPL - Below Poverty Line
C.A.C.P. - Commission For Agricultural Cost and Prices.
CBB - Commercial Bank Branch
CCE - Crop Cutting Experiments
CCI - Cotton Corporation of India
CDSBO - Crude Degumed Soyabean Oil
CES - Crop Estimation Surveys
CIF - Cost, Insurance & Freight
CIP - Central Issue Price
CWWG - Crop Weather Watch Group
DAP - Di Ammonium Phosphate
DES - Directorate of Economics and Statistics
E - Estimated
F.A.O. - Food and Agriculture Organisation
F.A.Q. - Fair Average Quality
F2 - Black Soil
F-414/ H-777/ J34/H4 - Cotton Varieties
FCI - Food Corporation of India
FDI - Foreign Direct Investment
FRL - Full Reservoir Level
FYM - Farm Yard Manure
GCA - Gross Cropped Area
GCES - General Crop Estimation Survey
GCF - Gross Capital Formation
GDP - Gross Domestic Product
GNP - Gross National Product
GSDP - Gross State Domestic Product
Ha - Hectares
HYV - High Yielding Varieties
I - Irrigated
ICOR - Incremental Capital Output Ratio K - Potash
KMPH - Kilometers Per Hour
KWH - Kilo Watt Hour
L2 - Light Soil
LPCPD - Litres per Capita Per Day
MSCCGMF - Maharashtra State Co-operative Cotton Growers Marketing Federation
MIS - Market Intervention Scheme
MSP - Minimum Support Prices
MSR - Marketed Surplus Ratio
SUGGESTION AND CONCLUSION
The above existing and new models are only indicative. The need of the hour
is to leverage the existing resources and make banks more participative through
policy implementation and create a conducive environment so that the agriculture
sector can be cared for like any other sector. Even the existing and conducive
policies are enough if they are properly implemented. Both private and public sectors
are contributing to agriculture in a big way. However, there are many things that
have to be implemented, especially financing aspects.
In India there are healthy signs of transformation in agriculture and allied

activities. Visible improvement has come about through adoption of management
practices through on-farm and off-farm operations in this sector. Agri-business has
evolved out of the new input-output matrix. Agriprenuers have come to realise the
importance of quality changes and value addition in agriculture. Risk and uncertainty
being inevitable parameters of modern business, serving farmers and saving farming
has become the need of the hour. This paper examines how under liberalisation and
globalisation, agri-business has opened new vistas for growth and development of
the rural economy in general and of the agrarian economy in particular. The
challenges of the rural economy can be balanced provided there is better
management in the economy. We suggest that the right type of managerial skills and
entrepreneurial expertise peppered with timely measures by the government would
help fulfil the growing needs of agri-business.
Among critics of large-scale, industrialized, vertically integrated food production,

the term agribusiness is used negatively, synonymous with corporate farming. As
such, it is often contrasted with smaller family-owned farms. Negative connotations
are also derived from the negative associations of "business" and "corporations" by
critics of capitalism or corporate excess. As concern over global warming intensifies,
biofuels derived from food crops quickly emerged as a practical answer to the energy
crisis. Adding corn ethanol to gasoline or using palm oil for biodiesel makes the fuel
burn more cleanly, stretches oil supplies, and perhaps most attractive to some
politicians, provides a nice boost to big agribusiness. In Europe and in the US,
increasing biofuels was mandated by law. Rising fuel costs are increasingly adding
financial burdens on the day-to-day running of agricultural companies.
BIBLIOGRAPHY
1.websites:
 www.google.co.in
 www.indypendent.org
 www.nabard.org
 www.businesstoday.indiatoday.in
 www.wikipedia.org
 www.naukri.com
 www.indiatoday.intoday.in
 www.breakingnewsonline.net
 www.itcportal.com
 www.news.oneindia.in
 www.adfca.ae
 www.corporateandinvestment.standardbank.co.za
 www.articles.economictimes.indiatimes.com
2.Newspapers:
 Economic times
 Indian Express
 Times of India
3.Business Magazines:
 India Today
 Business Today
4.Textbooks Referred:
 Agribusiness Finance
 Banking Regulation Act,1949

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AGRI-BUSINESS BANKING

Cover Page of Report

SEMINAR REPORT ON CONTEMPORARY

Name of Student: ___ NikeetaAgarwal_____________________________________

BIYANI INSTITUTE OF SCIENCE & MANAGEMENT (BISMA) 1

I am highly grateful and Indebted to Shri / Ms. _Rachna Khandelwal_____________________________

I would not have completed this report.

Date _______________ Name of the Student and her signature

It is certified that. Ms _____ Nikeeta Agarwal,______________________________________________

Name & Signature of Faculty Guide

Date:- ____________ Name & Signature of Student

SL.No CHAPTERS PAGE

5. Overview on Agriculture Industry in India 9-12

6. Role of Banking sector in Indian Agriculture 13-15

7. Indian banks involved in Agribusiness Banking 30-44

8. Recent News as regards the Union Budget 2010-11 48-50

9. Microfinance in India 51-53

10. Acronyms and Abbreviations used in the Agriculture 54

Suggestion and Conclusion

The food and fiber system is increasingly being referred to as “agribusiness” .

Important requisites for a successful Modern agri-business are:

2. Planning : In simple words, planning is a pre-determined line of action. The accomplishment of

Forms of Business in which Banking Companies may Engage:

(a)- The borrowing, raising, or taking up of money;

- The buying, selling and dealing in bullion and specie;

- The negotiating of loans and advances;

- The collecting and transmitting of money and securities;

(g) Undertaking and executing trusts;

(h) Undertaking the administration of estates as executor- trustee or otherwise;

Another day, another bill to pay

Bakery & Confectionery Products:

Cattle Feed Supplements

Dry Fruits & Nuts

Dyes & Color Additives

Edible Oil & Allied Products

Flowers, Floriculture & Dried Flowers

Food Processing Plants, Machinery & Equipment

Fresh, Dried, Preserved & Dehydrated Fruits and Vegetables

Liquors, Mineral Water & Beverages

Milk & Dairy Products

Other Miscellaneous Agro Products

Value (Rupees in crores)

April 08 - March April 2009- April 2010-Oct.

Overview on Agricultural Industry in India

Roles of the Banking Sector in Indian Agriculture 19

Kisan Credit Card Scheme

New Models in Banking

Table 1: No. of Kisan Credit Cards Issued and Amount Sanctioned

Agency Cumulative progress upto September 2009

Card Issued Share (%) Amount Sanctioned

Commercial 27.52 18521.13

TOTAL 271.81 100.0 64065.57

First National Spot Exchange for Farm Produce

Facilities provided by banks towards agriculture

Farm succession planning

Price risk management solutions

Indicators Risks and

Indicators Risks and

Means of Risks and

Name of Student: _ NikeetaAgarwal___________________________________

It is certified that. Ms _ Nikeeta Agarwal,__________________________________________