PAPER PRESENTATION ON “The Role of Primary Co-operative Agriculture and Rural Development Bank- Inclusive Growth” -‘A special study of Sagar Taluk in Shivamogga District in Karnataka, India.’

Paper Presented by……….. Dr. D.M.Basavaraja, M.com,Ph.D Director, National Institute of Post Graduate Studies, JNNCE Campus, Shivamogga. Karnataka State, INDIA. Dr. B. Ganesh, M.Com, Ph.D., Director, College Development Council, Kuvempu University, Jnana Sahyadri, Shankaraghatta, Karnataka State, INDIA.

Presentation at Galore >  Introduction  Conceptual Analysis of Rural Development  Need for Long Term Finance  Profile of PACARD Bank  Objective of the Study  Research Design  Major Findings  Suggestions  Conclusions

INTRODUCTION  India is a country of exotic, Scio-economic villages.  Country of 5,76,000 villages.  Every four persons out of five are villagers.  Every five out of six persons depend on agriculture and allied activities.  Agriculture contributes only 21% of India’s GDP.  Agriculture plays an significant role in India’s economic, social and political sectors.

“Conceptual Analysis of Rural Development”  Development- Qualitative change & increase in potential of people for a betterment of living conditions in future.  A good number of people live a dependency life due to poverty, social stagnation, inferiority complex, non- participation in socio-economic, cultural & Political life.  Need to bring out people out of apathy & skepticism.

Contd……  Need to motivate them to think freely about progressive ideas.  Rural Development a strategy designed to liberate the rural poor people out of age-old bondage of degraded life.  Need to awaken & activate the rural population, in the process of achieving & sharing of higher levels of production.

Contd-  Rural Development- Overall development of rural areas to improve the quality of life of rural people.  Development- In agricultural & allied activities, cottage, small-scale & traditional craft industries, socio-economic infrastructure, community services.  Rural development- Product of interaction between various factors,(socio-economic, cultural, physical, technological, environmental etc,).

“NEED FOR LONG TERM FINANCE”  Long term finance is of paramount importance for capital investment in agriculture.  In India, more land should come under cultivation for increasing agricultural production.  Scientific methods of cultivation is to be adopted to push up the production potential.  Majority of Indian farmers have little or no savings for capital intensive investment.

Contd…….  Introduction of co-operative movement in India, exclusively to cater the long term credit needs of famers.  Land Mortgage Bank came into existence to minimise difficulties associated with the long term credits.  Later, Land Mortgage Bank was renamed as, Primary Cooperative Agriculture and Rural Development Bank (PACARD Bank).

Contd- o Commercial and regional rural banks are disbursing long term loans better than PACARD Banks. o Inspite of the quantitative achievement, commercial banks have failed to reach the majority of rural masses. o Sivaraman Committee report estimated- Only 6% of the 59 million farmers own 2 hectors or below had availed credit from commercial banks. o PACARD Banks with wide network of branches at grass root level and vast experience in rural credit can help small farmers and artisans to avail modern technology at a minimum cost.

“Conceptual Analysis of PACARD Bank” World Bank- “Rural development is a strategy designed to improve the economic & social life of a specific group of people that is the rural poor.” Rural Development Bank classification- At National level NABARD, at State level, at District level, and at Taluk level. Taluk level Bank is PACARD Bank. Land Improvement Act of loans are advanced by the state for productive purposes, which is inadequate.

Significance of ‘PCARD’ Bank Agriculture Credits Types :-  Short Term Loans- Repayable period 15 months, for seasonal agricultural operations.  Medium Term Loans- Repayable period 15 months to 5 years, for live stock or agricultural machinery or land improvement or minor irrigation projects.  Long Term Loans- Repayable period 5 to 25 years, for heavy agricultural machinery, private minor irrigation projects, plantation, permanent land improvement, purchase of agricultural land and redemption of old debts.

New Approach “ Inclusive Growth”:- PACARD bank overall development areas :- 1.Agriculture 2.Village Industries 3.Technical Training to Artisan 4.Marketing of Agriculture Products 5.Services like Health and Family Welfare etc 6.Mechanization Sheep Breeding 7.Piggery Diary Development

OBJECTIVE OF THE STUDY o To assess the role of two PCARD Banks in agricultural financing and rural development. o To study the problems faced by rural agriculturist in getting the credit by PACARD Banks. o To see whether the borrowers utilizing the credit for the purpose with which they are lent. o To assess the quantum of long term credit required by the borrowers and examine between two PACARD Banks succeeded in meeting this requirement.

Contd- o To examine the extent of utilization of credit by the borrowers and to find out the reasons for misutilisation, if any. o To examine the impact of rural development scheme on rural development. o To assess the contribution of PCARD banks for the cause of rural development in the study area. o To offer suggestions for improving the role of PCARD banks in achieving rural development.

“RESEARCH DESIGN”  Area and Scope of the Study –  Evaluating the performance of PCARD Banks of Sagar Taluk, Shimoga, District, Karnataka, INDIA.  Sources of Data– 20 borrowers (Kasaba & Avinalli) o Primary Data:- (Questionnaire & Interview)  Agricultural income, procedural aspects of loan sanctioning, credit utilization and recovery, delay experienced, opinion of the sample beneficiaries, overall rating of the bank etc.

Cont d- o Secondary Data:- Publications of NABARD & RBI, annual reports of KASCARD Bank Bangalore, Annual reports, various registers & ledgers of PCARD Banks of Sagar and Bheemanakone, various books, journals and websites/web search.  Sample Design/Size:- Study conducted in two PCARD Banks of Sagar Taluk, Shimoga District, Karnataka State, INDIA.

‘Profile of Sagar Taluk’  One of the fertile & important maland taluks of Shimoga district.  Geographical area: sq km.  Population (2001):- 2,00,995 ( female 1,00,018 ).  Occupation & Crop:- Agriculture & Arecanut.  Literacy Rate (2001):- Male 86% & Female 60%.  Agriculture mainly depends on monsoon.  The average rainfall is 80 inches.  There are 27 Credit cooperative societies, 30 Milk Producing cooperative societies & 37 other societies.

Contd-  There are 18 branches of Commercial Banks, 4 Regional rural banks, 2 Urban cooperative banks, and 2 PACARD Bank in Sagar Taluk.  Purpose of Study:- Membership size of PACARD Banks are considered to decide sample size.  Primary Data:- Questionnaires to 1200 members (15% of total members and 20% of borrowers in the year 2010),.  Stratified Random Sampling: members and 5259 borrowers ( survey of April 2010).  Total Respondents 800:- Include 520 small farmers, 160 medium farmers and 120 other farmers.

“Major Findings of the Study”  Bank Contribution:- Development of agriculture, infrastructure development in rural areas, rural industrialization and acquiring fixed assets.  Relationship:- Bank’s emotional bondage with farmers and farmers inclination towards development.  Borrowings:- 74.2% small farmers, 18.1% medium farmers and 17.1% large farmers.  Inadequate Lending: % own investment, 5 from commercial banks & 292 partial development.

Contd-  Utilization of Loan:- 57.5% borrowers partly and 42.5% borrowers fully utilized the loans.  Loan Lending Difficulties:- Bank Insufficient funds and improper records submitted by farmers.  Purpose of Lending:- Lent loan for Agricultural Development purposes rather than overall Rural Development purposes.  Bank Directors Views:- No lending schemes for overall development but, for agricultural development.  Lending Procedure:- Lending of credit based only on agricultural land. High rate of interest for other lending's.

“Suggestions for the Bank” Follow the scientific method of granting loan. Discourage the borrowers taking loan for unproductive purpose. Bank should mobilize their own internal resources for granting loans. Bank should be strengthened financially by mobilizing the deposits from the public. Understand the psychology & attitude of the farmers and act accordingly.

Contd- Pre-lending appraisal and post lending supervision should be strengthened. The bank should speedup the procedure in sanctioning the loan. Bank should coordinate with other agencies like PACS for fast disposal of loan applications. The bank should take up training programme for improving the efficiency of the entire staff.

“Suggestions for the Policy Makers” o Bank should gear up to meet the demands of the farmers and take leadership in rural development. o Government should pump in sufficient funds to PACARD banks for overall development of farmers o Government policy of waiving loans is to be strictly reviewed in the interest of the rural development general and farmers in particular. o PACARD banks to be assigned more responsibility and government should provide sufficient staff, infrastructure and necessary funds.

‘CONCLUSION’ The present study was undertaken with the objective of studying the role of PACARD banks in promoting rural development with special reference to Sagar Taluk. Lack of commitment and the government policy is not encouraging in achieving overall rural development. There is a need for revising, revitalizing and reviving the organizational and financial frame of the PACARD bank.