2. Measures to Improve access to Institutional Credit
to bring the excluded agricultural households into the fold of
institutional credit in a structured and sustainable manner, there is
a need
• to build an enabling ecosystem with respect to policy
interventions, institutional innovations and digital technologies.
The enabling ecosystem would include
• digitisation of land records,
• reforming of land leasing framework,
• creating a national level agency to build consensus among states
and the Centre with regard to
•
agriculture-related policy reforms and
innovative digital solutions to bridge the information gap between
the banks and farmers.
3. Measures
(1) Digitisation of Land Records
Computerization/ Digitisation of land records has the potential
to address various issues relating to agricultural credit.
(2) Land Leasing Framework
Most states ban or restrict leasing of agricultural land leading to
informal or concealed tenancy.
As tenant farmers lack documentary evidence as well as suffer
from fear of eviction, they do not have the incentive to invest in
agricultural land, leading to low productivity.
There is a need to reform the land leasing framework by state
governments by adopting policies like
Model Land Leasing Act proposed by NITI Aayog
Andhra Pradesh Land Licensed Cultivators Act, 2011.
4. Measures
(3) Federal Institution in Agriculture
In order to consult states and build consensus among them over
reforms related to agriculture there is need for a federal
institution, established on the principle of cooperative
federalism, having representation from both Central
Government as well as state governments.
(4) Digital Innovations in Agriculture Sector
The emergence of farm technologies integrated with robust
ICT framework and other farm-related innovations hold
tremendous potential to positively impact the growth in the
agriculture sector.
The technological innovations leverage tools like Internet
of Things, Cloud, Big Data, etc.
5. Some of the major developments are discussed
below:
a. e-NAM - a technology-driven unified national level market
platform that integrates the physically dispersed markets
enabling better price discovery for the farm produce
b. Corporates through mobile-based apps are providing farm
machinery to farmers on rental basis which saves farmers from
long-term investments.
c. Weather forecasting companies giving real time weather updates
d. Movable warehouses and cold storages that help farmers to store
their produce in a cost-effective manner
e. State-of-the-art solar powered products for irrigation which will
make farmers less dependent on electricity
f. A few banks have launched mobile-based applications to cater to
the specific needs of farmers and create an ecosystem for them
through which they can purchase products, get weather updates
and soil information and apply for loans.
6. Suggestions
e. Aggressive efforts are needed to improve institutional credit
delivery through technology driven solutions to reduce the extent
of financial exclusion of agricultural households.
f. IBA should come out with a technology driven portal for the
banks to facilitate ease of credit to the farmers for agriculture and
allied activities on the lines of PSBLoans In59 minutes to MSMEs.
g. Innovations like movable warehouses/cold storages and mobile
based apps providing farm machineries on rental basis have been
successfully operating but on a small scale. Hence, the GoI should
identify the successful models in these areas which can be scaled
up across the country.
h. Further, banks should be encouraged to provide credit to such
innovative solutions which support the agriculture sector.
7. Suggestions
a. GoI should push state governments to complete the digitisation
process and updation of land records in a time bound manner.
b. State governments should give access to banks to digitised land
records in order to verify land title and create charge online. In
such states banks should not insist on submission of land title
documents.
c. State governments having a highly restrictive legal framework
should be encouraged to reform their legal framework on the
basis of Model Land Leasing Act proposed by NITI Aayog/ Land
Licensed Cultivators’ Act, 2011 of the state of Andhra Pradesh so
that formal lending to tenant farmers can improve.
d. GoI should set up a federal institution, on the lines of GST
Council, having participation from both the Centre as well as the
states to suggest and implement reforms in the field of
agriculture.
9. Governments can support agriculture insurance through a
variety of interventions
Data
Collect
Audit
Manage
Outreach
Link to social safety nets
Link to credit
Premium subsidies
Awareness building
Risk Financing
Public sector reinsurance
Promote coinsurance
pool
Support product design
and development
Product development
and pricing (short run)
Technical support for
insurers (long run)
Enabling environment
Institutional
framework
Legal framework
Consumer protection
Financial support
Notas do Editor
Data: Senegal investments in AWS
Outreach: India mandatory bundle of credit and insurance
Risk financing: Mongolia, Government pays for the catastrophic risk layer
Product design: Senegal
Enabling environment: CIMA
