Functions Of The National Bank For Agriculture And Rural Development

Functions Of The National Bank For Agriculture And Rural Development

The main functions of NABARD are as follows:

1. It works as an apex body to look after the credit requirements of the rural sector.
2. It has the authority to oversee the functioning of the cooperative sector through its Agricultural Credit Department.
3. It provides short-term credit (up to 18 months) to State Co-operative Banks for seasonal agricultural operations (crop loans), marketing of crops, purchase and distribution of fertilizers and working capital requirements of co-operative sugar factories.
4. It provides medium-term credit (18 months to 7 years) to State Co-operative Banks and RRBs for approved agricultural purposes, purchase of shares of processing societies and conversion of short-term crop loans into medium-term loans in areas affected by natural calamities.
5. It provides medium and long-term credit (not exceeding 25 years) for investments in agriculture under schematic lending to State Co-operative Banks, land development banks, I RRBs and commercial banks.
6. It provides long-term assistance in the form of loans to State governments (not exceeding 20 years) for contribution to share capital of cooperative credit institutions.
7. It has been entrusted with the responsibility of inspecting District and State cooperative banks and RRBs. The inspection of State land development banks and other Federations operatives is undertaken voluntarily.
8. It maintains a research and development fund to be used to promote research in agriculture Co and rural development so that projects and programmes can be formulated and designed to Jo suit the requirements of the different areas.

Agricultural Marketing In India

For a long period of time, Indian agriculture was mostly in the nature of ‘subsistence farming’. The farmer sold only a small part of his produce to pay off rents, debts and meet his other requirements. Such sale was usually done immediately after harvesting crops since there were no storing facilities.

A considerable part of the total produce was sold by the farmers to the village traders and moneylenders often at prices considerably lower than the market prices. The farmers who took their produce to the man dies (wholesale markets) also faced a number of problems as they were confronted with powerful and organised traders.

In semantics, business was carried out with the help of brokers, who were the agents of merchants. In fact, there was a large chain of middlemen in the agricultural marketing system like village traders, kutcha Kshatriyas, pucca arhatiyas, brokers, wholesale, retailers, moneylenders, etc. As a result, the share of farmers in the price of agricultural produce was reduced substantially. In addition to the above defects in the agricultural marketing system in India – there were a number of other problems as well. For instance, there was the absence of proper warehousing facilities in the villages.

Transportation facilities were also highly inadequate and only a small number of villages were joined by railways and pucca roads to mandies. Most of the roads were kutcha roads not fit for motor vehicles and the produce was carried on slow moving transport vehicles like bullock carts. Obviously, such means of transport could not be used to carry produce to far-flung places and the farmer had to dump his produce in the nearby market.