Indian Streams Research Journal

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1 Vol 4 Issue 12 Jan 2015 ISSN No : ORIGINAL ARTICLE International Multidisciplinary Research Journal Indian Streams Research Journal Executive Editor Ashok Yakkaldevi Editor-in-Chief H.N.Jagtap

2 Welcome to ISRJ RNI MAHMUL/2011/38595 ISSN No Indian Streams Research Journal is a multidisciplinary research journal, published monthly in English, Hindi & Marathi Language. All research papers submitted to the journal will be double - blind peer reviewed referred by members of the editorial board.readers will include investigator in universities, research institutes government and industry with research interest in the general subjects. International Advisory Board Flávio de São Pedro Filho Federal University of Rondonia, Brazil Kamani Perera Regional Center For Strategic Studies, Sri Lanka Janaki Sinnasamy Librarian, University of Malaya Romona Mihaila Spiru Haret University, Romania Delia Serbescu Spiru Haret University, Bucharest, Romania Anurag Misra DBS College, Kanpur Titus PopPhD, Partium Christian University, Oradea,Romania Mohammad Hailat Dept. of Mathematical Sciences, University of South Carolina Aiken Abdullah Sabbagh Engineering Studies, Sydney Ecaterina Patrascu Spiru Haret University, Bucharest Loredana Bosca Spiru Haret University, Romania Fabricio Moraes de Almeida Federal University of Rondonia, Brazil George - Calin SERITAN Faculty of Philosophy and Socio-Political Sciences Al. I. Cuza University, Iasi Editorial Board Hasan Baktir English Language and Literature Department, Kayseri Ghayoor Abbas Chotana Dept of Chemistry, Lahore University of Management Sciences[PK] Anna Maria Constantinovici AL. I. Cuza University, Romania Ilie Pintea, Spiru Haret University, Romania Xiaohua Yang PhD, USA...More Pratap Vyamktrao Naikwade Iresh Swami ASP College Devrukh,Ratnagiri,MS India Ex - VC. Solapur University, Solapur R. R. Patil Head Geology Department Solapur University,Solapur Rama Bhosale Prin. and Jt. Director Higher Education, Panvel Salve R. N. Department of Sociology, Shivaji University,Kolhapur N.S. Dhaygude Ex. Prin. Dayanand College, Solapur Narendra Kadu Jt. Director Higher Education, Pune K. M. Bhandarkar Praful Patel College of Education, Gondia Sonal Singh Vikram University, Ujjain Rajendra Shendge Director, B.C.U.D. Solapur University, Solapur R. R. Yalikar Director Managment Institute, Solapur Umesh Rajderkar Head Humanities & Social Science YCMOU,Nashik S. R. Pandya Head Education Dept. Mumbai University, Mumbai Govind P. Shinde Bharati Vidyapeeth School of Distance Education Center, Navi Mumbai Chakane Sanjay Dnyaneshwar Arts, Science & Commerce College, Indapur, Pune Awadhesh Kumar Shirotriya Secretary,Play India Play,Meerut(U.P.) G. P. Patankar Alka Darshan Shrivastava S. D. M. Degree College, Honavar, Karnataka Shaskiya Snatkottar Mahavidyalaya, Dhar Maj. S. Bakhtiar Choudhary Director,Hyderabad AP India. S.Parvathi Devi Ph.D.-University of Allahabad Sonal Singh, Vikram University, Ujjain Rahul Shriram Sudke Devi Ahilya Vishwavidyalaya, Indore S.KANNAN Annamalai University,TN Satish Kumar Kalhotra Maulana Azad National Urdu University Address:-Ashok Yakkaldevi 258/34, Raviwar Peth, Solapur Maharashtra, India Cell : , Ph No: ayisrj@yahoo.in Website:

3 Indian Streams Research Journal ISSN Impact Factor : (UIF) Volume-4 Issue-12 Jan-2015 Available online at PROBLEMS FOR FARMERS IN GETTING LOANS FROM THE NATIONALISED BANKS 1 2 Dyavappa Hambalappa and A.K. Kittur 1 Research Scholar Dept of Economics Gulbarga University Gulbarga Associate Professor Dept of Economics N.V Arts science and Dr Pandurangarao Patki commerce College. Gulbarga Abstract: In Indian economy, the agriculture sector growth is lagging behind (3.0%)in comparison to industry sector (7.1%) service sector (10%). Development of agriculture sector is vital for economic growth and development. Adequate finance is a panacea for this. Presently under priority sector, Govt. and RBI are guiding to commercial banks channelizing more and more funds to farmers at easy terms. In institutional finance to agriculture, commercial banks including RRBs now are emerging in top ranking. Most importantly the role of money lenders is decreasing and reaching near bottom level. There is a sigh of relief for the rural poor from the dreaded clutches of money lenders. NABARD as apex institution of indirect financing to agriculture is providing patronage as philosopher, guide and friend. The progress achieved by NABARD in refinancing is praiseworthy. Recent data reveals that 66% households in rural area are still away from getting banking services and facilities at cheaper cost. Financial inclusion is the need of hour. Commercial banks are extending financial inclusion in rural areas directly hitting poverty alleviation in India. Though financing of agriculture by ommercial banks has proved its value in changing the economy of farmers by increasing their income yet the system is not free from some problems. This empirical study (paper) is an attempt to find the problems faced by farmers and suggest some framework changes regarding problems and sound financing system for the near future. Developing countries like India still have dominance of agriculture in their economy in terms of revenue generation as well as manpower employment. About 60% population engage in agriculture in India contributes 18% of GDP whereas the developed countries get only 2% of their GDP from agriculture. About 10% of the national exports originate in this sector it shows clearly that economic growth and development of India is closely tied to the development of agriculture. The agriculture sector, as such has been growing at a relatively low rate in comparison to other sector of the economy. Keywords: Farmers In Getting Loans, Nationalised Banks 1.INTRODUCTION Disguised unemployment and low productivity is the negative feature of this sector. Credit plays a vital role for the development of agriculture.as this sector generates low income or surplus due to increasing cost of inputs and implements. It results, Indian agriculture a way of sustenance not a surplus yielding work. Use of technology and high yielding varieties of seeds is still cry for mars for marginal and small farmers. Credit needs is beneficiary for all types of farmers. However it is inevitable for small and marginal farmers which constitute 78% of the total farmers. Small farmers having holding less than 2 hectares and marginal farmers having holding less than1 hectares.1 Economy of Indian farmer is dualistic where existence of two different segments. One segment of the economy is developed, makes use of modern technique of production and is usually market oriented and have a few problems regarding bank finance. The other segment is subsistence type of economy that makes use of primitive methods of production and has lot of problems in financing agriculture credit. 1 2 Dyavappa Hambalappa and A.K. Kittur, PROBLEMS FOR FARMERS IN GETTING LOANS FROM THE NATIONALISED BANKS Indian Streams Research Journal Volume 4 Issue 12 Jan 2015 Online & Print 1

4 . Problems For Farmers In Getting Loans From The Nationalised Banks Short term needs varies between 3 months to 15 months it is seasonal and for purchasing of seeds, fertilizers, pesticides and payment of wages and operational expenses. This type of need is mostly required by all farmers. Medium term needs varies between 15 months to 5 years for the purchase of cattle, small agricultural implements, repairs and constructional wells etc. Long term needs are required for the permanent improvement on lands, digging tube wells, purchase of larger agricultural implements and machinery like tractor, harvesters etc and repayment of old debts. The period of such credit extends beyond 5 years. Commercial banks provide two types of loan i.e. crop loan and investment loan. Crop loan is a short term loan, stands due for repayment immediately after the harvesting of the crop whereas investment loan is a long term loan required for the purposes of capital formation on land. REVIEW OF LITARATURE Stuart W. Shulman (1999) "The Origin of the Federal Farm Loan Act: Agenda-Setting in the Progressive Era Print Press", University of Oregon, Department of Political Science, Dissertation,The Act established the Federal Farm Loan Board to oversee and supervise federal land banks and national farm loan associations. It was also responsible for setting benchmark rates of interest for mortgages and bonds. Finally, it could intervene when it thought specific banks were making irresponsible loans. The twelve Federal Land Banks were required to hold at least $750,000 in capital. Stock ownership of the banks were held by national farm loan associations and other interested investors, including any individual, corporation or fund. In the case of insufficient capital, the U.S. Treasury (through the Federal Farm Loan Board) made up the difference. When additional subscriptions were made from other sources, federal ownership in the banks was retired. National Farm Loan Associations were established groups of 10 or more mortgage-holding farmers who together owned 5% or more of a federal land bank. Once formed, they were subject to a charter review process by the Federal Farm Loan Board. This structure aimed to align the incentives of individual farmers with the banks, as farmers held two rules: borrowers and lenders. Mohan (2006) examined the overall growth of agriculture and the role of institutional credit. Agreeing that the overall supply of credit to agriculture as a percentage of total disbursal of credit is going down, he argued that this should not be a cause for worry as the share of formal credit as a part of the agricultural GDP is growing. This establishes that while credit is increasing, it has not really made an impact on value of output figures which points out the limitations of credit. In another study. Golait (2007) attempted to analyse the issues in agricultural credit in India. The analysis revealed that the credit delivery to the agriculture sector continues to be inadequate. It appeared that the banking system is still hesitant on various grounds to purvey credit to small and marginal farmers. It was suggested that concerted efforts were required to augment the flow of credit to agriculture, alongside exploring new innovations in product design and methods of delivery, through better use of technology and related processes. Facilitating credit through processors, input dealers, NGOs, etc., that were vertically integrated with the farmers, including through contract farming, for providing them critical inputs or processing their produce, could increase the credit flow to agriculture significantly. Sources of agricultural credits The various sources of agricultural credit can be classified in two groups. 1) Non Institutional Agencies 2) Institutional Agencies Non institutional agencies include the local village money lender and their agents andlandlords. Institutional agencies includes cooperatives societies, commercial banks regional rural banks and NABARD Government and RBI views in respect of agricultural credit policy, can be divided into two phases 1. Period before 1970: Before 1970 the government was committed to the exclusive development of cooperatives as major source of institutional credit in rural areas. This period is called cooperative period. 2. Period since 1970: Two major developments occurred; the first was the green revolution in the wake of adoption of the new agricultural technology. The second was the nationalization of 14 major commercial banks in July 1969(six more commercial banks was nationalize in April 1980).Multi agency Approach (MAA) was started regarding agricultural and rural credit. Commercial banks begin to participate with full heart in agriculture finance. Two new institutions known as regional rural banks and the farmers service societies were also establish during this period. The following table shows the share of commercial banks and cooperatives in India. Indian Streams Research Journal Volume 4 Issue 12 Jan

5 . Problems For Farmers In Getting Loans From The Nationalised Banks METHODOLOGY Primary data are collected through Questionnaire from Sample area. Purposive discussion with farmers conducted regarding problems what are the problems. Secondary data from various committees reports RBI bulletin are collected from our research point of view. A sample unit of 25 farmers from the shahapur taluka, the primary data is collected through personal interview method to collect the primary information. The primary data which gathered from the farmers will be classified and tabulated and result is presented in tabular form. Tible -1-Sample size Sample size Area Time taken to interview 5 Gogi One day 5 Chamanal One day 5 Darshanapur One day 5 Kadamageri One day 5 Chandapur One day Total 25 Five villages Five days The above table clearly states that the sample size and area of the respondents and the time taken to interview the farmers, the researcher had the personal interview method to collect the primary source. The five days of the personal interviewed to the farmers to get the information from the different villages of the Shahapur taluk. Problems faced by farmers in their transaction with banks There are show many problems which were hurdle for the farmers to take a agricultural loan due to the lack of awarness among the farmers to get loans from the nationalised institutions, that was due to the lack of education is the most inportant factore to get the agricultural loans. To which to identify the what are the problems of the farmers to get the loans from the nationalised institution. 25 farmers have been interviewed about what are the problems you are facing to get the agriculturals loans from rhe nationalised institutions. Government of india has introduced the low percentyage of interest on the agriculture why you are getting loans fom the money lenders. Table- 2-Lack of awerness Lack of Frequency % Percentage awerness Yes No O5 16 Total The farmers were asked about the agriculture loan from the nationalised institution which the govenment of India has brought to provide a stimulous to the development of indian agriculture which is esential for the national development. Without the agriculture the national development cant be possible know that the govenment introduced the loans for the small scall formes as well as the big jagirdars to develop the agricultural products, which will enhance the development of the nation. To know wheather the farmers know about the system to which the govenment has brought for them, to which they have told that they dont know the policy and programmes brought by the govenment in for to enhance their status which will be backbone for the national development. 84 % of the farmers said that they dont awar of the all these developments made by the government, only 16% of the farmers said that they know about he policy and programmes introduced by the government of india for to enhance the status of the farmers to enhance the national development. Table -3-Lack of education Particulars Frequency % percentage Yes No Toatal Indian Streams Research Journal Volume 4 Issue 12 Jan

6 . Problems For Farmers In Getting Loans From The Nationalised Banks The foemers were asked about the lack of education is also one of the reasion why they have not able to get the loans from the nationalised banks or from the nationalised institution. That to the low rate of interest has been made on the loan amout. To know why they are lagging behand the awarness of the programmes and policies of the government for the farmers theire direct answer is that we dont have litary knowlege all the facts will be recorded in the foem of the acts and in the written forms and which we could not able to understand and we canot able to read it and could not able to understand. The major problem we are facing to get the loan from the nationalised institution is of the lack of education in our area. To which 76% of the farmers said that due to the lack of education we are not able to get the loans from the nationalised institution and we are not getting the beniffits from the governmrnt, only 24 % of the farmers said it may not be the reasion. CONCLUSION Agricultural loans are available for a multitude of farming purposes. Farmers may apply for loans to buy inputs for the cultivation of food grain crops as well as for horticulture, aquaculture, animal husbandry, floriculture and sericulture businesses. There are also special loans to finance the purchase of agricultural machinery such as tractors, harvesters and trucks. Construction of biogas plants and irrigation systems as well as the purchase of agricultural land may also be financed through special types of agricultural finance. Here is some information about the kind of agricultural credit and loans provided by public sector banks in India. The farmers from the hyderbad karnataka region lagging behand getting the agri loans from the nationilised institution. We have hear from the persons who have taken loans from the banks has said that the low rate of intrest loans were getting from the banks. But they wont suggest us to whom we have to approach and how it has to gett it from the banks. If the govenment has made any awerness about the policies which they have brougth to the farmers, that has not taking place due to lack of that we could not able to gett the loans from the banks. Onther reasion if we are educated means we would have underestood the programmes and policies of the government by seeing in papers or else from the other mediam, but we are uneducated we cant able to read it and we canot able to understand it. So it neccessary of the govenment that they have to make a awarness programmes for the farmers about the policies and programmes introduced by them for the farmers benifts and at the same time govenment should bring educational progrmmes for the farmers. That will enhance the farmers status and will make them to come on the maion srteam of development and to suffort for the national development. REFERENCE 1.Farm Credit Administration: History of FCA and FCS 2.Palmer, Walter B, The Federal Farm Loan Act, in Publications of the American Statistical Association, Vol. 15, No. 115 (Sep. 1916), pp Stuart W. Shulman (1999) "The Origin of the Federal Farm Loan Act: Agenda-Setting in the Progressive Era Print Press", University of Oregon, Department of Political Science, Dissertation, 4.Mohan, Rakesh (2006): Agricultural Credit in India Status, Issues and Future Agenda, Economic and Political Weekly, 41: Golait, R. (2007): Current Issues in Agriculture Credit in India: An Assessment, RBI Occasional Papers, 28: Thompson, C.W., The Federal Farm Loan Act, in The American Economic Review, Vol. 7, No. 1, Supplement, Papers and Proceedings of the Twenty-ninth Annual Meeting of the American Economic Association (Mar, 1917), pp Putnam, George F., The Federal Farm Loan Act, in The American Economic Review, Vol. 6, No. 4 (Dec., 1916), pp Augustine J. Kposowa and Aikaterini Glyniadaki (2012), Mental Health and Suicide: An Ecological Hierarchical Analysis of U.S. Counties and States, 9. Misra & puri, Indian Economy, Himalaya Publishing House Mumbai 2010, pp Bhole L M, Financial Institutions and Markets, 2010 pp. 295 Tata McGraw hill publications. 11.Sharma, R. D., Farm financing by commercial banks a regional study, Bharat book depot, Bhagalpur 12.Reserve bank of India, trend and progress of banking in India Mohan Rakesh, Agricultural credit in India, Economic & political weekly, March, Reserve Bank of India (2004): Report of the Advisory Committee on Flow of Credit to Agriculture and Related Activities From the Banking System. URL 7. Statistical Tables Relating to Banks in India (Various Issues), Reserve Bank of India, Indian Streams Research Journal Volume 4 Issue 12 Jan

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