NABARD : 25 YEARS OF DEDICATION TO RURAL PROSPERITY

NABARD completed 25 years of its eventful and trailblazing existence on 12 July 2007. Established in 1982, by an Act of Parliament, NABARD's mandate was to provide focused and undivided attention to the development of rural India by facilitating credit flow for promotion of agriculture and rural non farm sector. Emphasizing this in no uncertain terms, its mission statement underscores NABARD's goal to "promote sustainable and equitable agriculture and rural prosperity through effective credit support, related services, institution development and other innovative initiatives". NABARD's functions can be classified into 4 major categories viz. Credit Planning, Financial Services, Promotion and Development, and Supervision. Under Credit Planning NABARD prepares Potential Linked Credit Plan (PLP) annually for each district of the country by assessing potential available in agriculture and rural sector. This serves as a guide for banks and Government agencies to prepare their own investment and credit plans in the district and state. Under its Financial services, it refinances commercial, co-operative and regional rural banks for lending to on farm and non-farm activities. This includes farm activities like minor irrigation, animal husbandry, farm mechanization, forestry, fisheries, land development, horticulture, plantation and medicinal crops and non-farm like rural industries, artisans, handicrafts, handlooms, rural housing, rural tourism and agro processing. Refinance is provided by NABARD for both long term investment credit as well as short term production credit for crop loans and working capital for non-farm activities. A nationwide network of 28 regional offices at the state capitals, a sub-office at Port Blair and 391 district development offices are at hand to cater to this awesome task. Clearly NABARD's benevolent hand has been silently at work in supporting rural resurgence in various ways and its stakes are quite enormous. A glance at the figures will give a fair idea. It has channelised a whopping Rs. 1,21,000 crore under its investment credit programme and RIDF since inception, which includes Rs. 8795 crore disbursed during 2006-07. Under production credit the Bank sanctioned limits of Rs. 12570 crore during 2006-07. NABARD has effectively brought in a number of innovations in the rural credit domains. To quote a few: Formation and Linkage of Self Help Groups, Farmers Clubs, Rural Infrastructure Development Fund, Watershed Development, Kisan Credit Card, District Rural Industries Project, Cluster Development Programme and Rural Innovation Fund.

Self Help Groups (SHGs) Farmers Clubs Rural Infrastructure Development Fund (RIDF) Watershed Development Tribal Development and WADI approach Women and Development District Rural Industries Project (DRIP) Rural Entrepreneurship Development Programme (REDP) Rural Marketing Revival of Short-Term Rural Co-operative Structure (STCCS) Rural Innovation Fund NABARD Consultancy Services (NABCONS) Co-Financing

Self Help Groups (SHGs): One of the major success stories of NABARD, the SHG Bank linkage programme started as a pilot project in 1992 with 500 SHGs. SHGs comprise homogeneous groups of poor people who have voluntarily come together mainly with the idea of overcoming their common problems of low social and economic status. SHGs enable the poor, especially the women from the poor households, to collectively identify, prioritize and tackle the problems they face in their socio economic environment. By pooling their meager resources and using them for lending among themselves, they develop the habit of thrift and the skill of credit appraisal, before getting mature enough to access a loan from banks, which is called credit linkage. Starting with small loans for consumption they soon graduate to bigger loans for setting up of income generating micro-enterprises. Today, NABARD's SHG Bank Linkage Programme boasts of over 26 lakh SHGs and 3.9 crore households influencing the lives of over 16 crore poor population. During the year 2006-07 alone, as many as 458591 groups were credit linked.

Farmers Clubs A popular intervention among both farmers and Bankers, the farmers Club concept was envisaged as an experiment in social engineering, a forum to bring the rural banker and the borrower closer and to propagate the principles of development through credit. Farmers Club is an informal group of 15-20 farmers, one per village, which acts as a medium for accessing and disseminating awareness of modern methods of farming and technological advancements in agriculture in its area. Financial support is provided by NABARD for opening and maintenance of Clubs as well as for organizing training programmes in the respective villages. With corporates and food chains looking for supply chain linkages of farm produce, Farmers Clubs may have an important role to play in joint production and marketing of farm produce. As on 31 March 2007 , there were Farmers Clubs in 534 districts covering 48763 villages.

Rural Infrastructure Development Fund (RIDF): Deficient Rural infrastructure hinders both social and economic development. Economists have explicitly emphasized on the direct correlation between the index of infrastructure development and rural development. NABARD's support to State Governments through RIDF since 1995-96 has brought about a sea change in the shape of upgraded infrastructure in rural areas. Rural roads and bridges under RIDF have improved market access to farmers; check dams and irrigation structures have augmented their water resources. Even drinking water projects and health centres have been supported under the Fund. NABARD so far has sanctioned Rs. 61539 crore for 2,44,025 projects under the Fund. A cumulative position of sector-wise sanctions as on 31 st March 2007 : Irrigation: Rs. 20637 crore, Rural connectivity: Rs. 26935 crore for rural road network and bridges, Power: Rs. 1434 crore Social Sector: Rs. 6988 crore Others: Rs. 5547 crore. A separate window has been created for rural connectivity with villages of population less than 500, with a corpus of Rs. 4,000 crore to support the Bharat Nirman project.

Watershed Development: In a comprehensive effort to enhance productivity of dryland through conserving soil, rainwater and irrigation, NABARD embarked on perfecting its experiments in creating a sustainable cost effective solution to the water harvesting techniques in rural areas. Building on its experience with the KFW funded watershed development programme in Maharashtra , NABARD established a Watershed Development Fund with an initial corpus of Rs. 200 crore in 1999-2000 which now stands at Rs. 602.76 crore. The programme is now being replicated in 124 districts of 14 States.

Tribal Development and WADI approach : With over 8% of the population comprising tribals largely dependent on forests, livestock and agriculture, NABARD found a holistic approach by addressing production, processing and marketing of the produce with WADI as the core of the programme. WADI (small orchard) was found to be an effective tool for arresting migration of tribals from their native habitat. The WADI model evolved out of concerted efforts made in association with Bhartiya Agro Industries Foundation (BAIF). The project also envisages other development interventions like environment, gender and health. Having completed 10 years in Gujarat and 5 years in Maharashtra , the programme has touched 275111 families in 410 villages.

Women and Development Women constitute one third of the labour force. In order to give focus to women in various development activities and increase their access to Bank credit, schemes like Assistance to Rural women in Non-farm Development (ARWIND), Assistance for Marketing of Non- Farm Products of Rural Women (MAHIMA), Development of Women through Area Programme (DEWTA) have been designed to provide exclusive support to women in rural areas.

District Rural Industries Project (DRIP): NABARD launched DRIP, an integrated area-based credit intensification programme, in collaboration with Government, banks and other development agencies with district specific focus. It was introduced in 1993-94 with the objective of creating sustainable employment opportunities in 106 districts all over the country.

Rural Entrepreneurship Development Programme (REDP): In order to generate employment in rural areas, it was felt necessary to develop the entrepreneurial skills of the rural youth. REDP is a promotional programme supported by NABARD to motivate and train educated unemployed rural youth, to set up their own enterprises. So far, 2.32 lakh persons have been trained under the programme under 7792 REDPs.

Rural Marketing: A number of marketing interventions have been made for marketing of rural non-farm products since marketing is a key factor in the sustainability of any such endeavour. With the financial support of NABARD under its promotional programmes like Rural Haats, Rural Marts, participation in fairs, exhibitions and marketing melas, rural artisans and entrepreneurs can get a larger market for their produce and showcase their talent to urban and upcountry markets.

Revival of Short-Term Rural Co-operative Structure (STCCS) NABARD is the implementing agency for the Revival package for the STCCS which mean the State Coop. Banks, District Coop. Banks and the Primary Agricultural Coop. Societies. (PACS). The revival package has been approved by the Govt. of India based on the recommendations of the Vaidyanathan Committee. NABARD has had dialogues with State Govts. and so far 10 states have executed MOU with GoI and NABARD. Apart from being on the national, state and district level implementing committees, NABARD has designed guidelines and training manuals for the special audit of PACS under the Package.

Rural Innovation Fund: In association with Swiss Agency for Development and Cooperation (SDC), NABARD has constituted the “NABARD SDC Rural Innovation Fund (RIF)” to support innovative projects in Farm, Non-Farm and Micro-Finance Sectors leading to creation of livelihood opportunities for the poor. Government and Non-Government Institutions, corporate bodies, financial institutions and individuals can avail funding support for activities involved in development of new products, processes, prototypes, technology etc. which have the poor in their focus.

NABARD Consultancy Services (NABCONS) NABCONS is a wholly owned subsidiary of NABARD, which has established itself as a dependable and professional consultancy services provider in agriculture and allied activities. As on 31 March 2007 , it has cumulatively contracted 487 national and international assignments involving consultancy fee of Rs.25.49 crores.

Co-Financing It has been the experience that Banks are wary of taking credit risk of financing high tech/large scale/ export oriented agricultural projects or those involving sunrise technologies. To instill confidence in banks and ensure credit flow to such projects, NABARD has entered into agreements for co-financing with 14 commercial banks. During 2006-07, seven projects were sanctioned with bank loan of Rs. 145.03 crore and NABARD's share of Rs. 72.42 crore. Floriculture, organic farming, milk processing, ethanol production and agro processing are among the projects sanctioned so far.