QA Series No 47 - Agriculture Credit – Part 3

 

The Banking Tutor

Question Answer Series 2025

S No 47                                                                  26-08-2025

Agriculture Credit – Part 3 

62.  What is Agricultural Value Chain Finance (AVCF)? 

The term “value chain finance” refers to the flows of funds to and among the various links within a value chain. 

An integrated value chain not only connects producers to others in the chain – input suppliers, intermediaries, processors, retailers and service providers, including financial service providers – but integrates many of these through ownership and/or formal contractual relationships. 

63. What is Internal Value Chain ? 

Internal value chain finance is financing that takes place within the value chain, such as when a supplier provides credit to a farmer or when a lead firm advances funds to a market intermediary. 

64. What is External Value Chain? 

External value chain finance is financing from outside the chain made possible by value chain relationships and mechanisms; for example, when a bank issues a loan to a farmer based on a contract with a trusted buyer or a warehouse receipt from a recognized storage facility. 

65. What is full form of PM PRANAM and what is it ? 

PM PRANAM stands for Promotion of Alternate Nutrients for Agriculture Management Yojana.    

The basic objective of the PM PRANAM  scheme is to incentivise the farmers to reduce the overall consumption of fertilisers by incentivising the states through the creation of a proper environment. 

66.  What is full form of  iFMS and what it is? 

iFMS stands for Integrated Fertilisers Management System. 

It is an Integrated Fertilizer Management System (iFMS), which captures end to end details of Fertilizer in terms of Production, Movement, availability, requirement, Sale, Subsidy Bill Generation to Subsidy payment to fertilizer companies. 

Under Aadhaar enabled Fertilizers Distribution System (AeFDS), it is mandatory for the retailers to sell subsidized fertilizers through PoS devices. 

67. What is e-Urvarak ? 

e-Urvarak is an integrated Fertilizer Management System developed by NIC for the Ministry of Chemicals and Fertilizers. 

68. Who had recommended Lead Bank Scheme? 

The  Study Group headed by Prof. D. R. Gadgil (Gadgil Study Group).  recommended the adoption of an 'Area Approach' to evolve  plans and programmes for the development of an adequate banking and credit  structure in the rural areas. (October 1969)

69. Which Committee had endorsed the idea of Area Approach ? 

A Committee of Bankers on Branch Expansion Programme of Public Sector Banks (PSBs) appointed by the RBI under the Chairmanship of Shri F. K. F. Nariman (Nariman Committee) endorsed the idea of an ‘Area Approach’ in its report  (November 1969), recommending that in order to enable the PSBs to discharge their  social responsibilities, each bank should concentrate on certain districts where it  should act as a 'Lead Bank'. 

Pursuant to the above recommendations, the LBS was introduced by the Reserve Bank of India (RBI) in December 1969. 

70. What is the aim of Lead Bank Scheme? 

The Lead Bank Scheme aims at coordinating the activities  of banks and other developmental agencies through various fora to achieve the objective of enhancing the flow of bank finance to the priority sector and other sectors and to promote banks' role in the overall development of the rural sector. 

71. Which Committee recommended continuation of Lead Bank Scheme? 

In view of the several changes that had taken place in the financial sector, the LBS was reviewed by the High Level Committee headed by Smt. Usha Thorat, former Deputy Governor of the Reserve Bank of India in 2009. There was overwhelming consensus that LBS needs to continue. 

72. From Which direction Planning starts under Lead Bank Scheme? 

Under LBS, planning starts with identifying block-wise/ activity-wise potential estimated for various  sectors. 

73. Who will convene public meeting of Lead Bank and at what intervals? 

The LDM should convene a quarterly public meeting at various locations in the district. 

74. When the SLBC constituted? 

The State Level Bankers’ Committee (SLBC) was constituted in April 1977, as an apex interinstitutional forum to create adequate coordination machinery in all States, on a uniform basis for development of the State. 

75. Who will chair SLBC Meetings ? 

SLBC is chaired by the Chairman/ Managing Director/ Executive Director of the Convenor Bank. SLBC meetings are required to be held regularly at quarterly intervals. 

75. When the Service Area Approach (SAA) introduced ?  

SAA introduced in April 1989 for planned and orderly development of rural and semi-urban areas was applicable to all SCBs including RRBs. 

76. To which areas SAA is applicable and what is the role of Banks in the Area? 

Under SAA, each bank branch in a rural or semi-urban area was designated to serve an area of 15 to 25 villages and the branch was responsible for meeting the needs of bank credit of its service area. 

77. What is primary objective of SAA? 

The primary objective of SAA was to increase productive lending and forge effective linkages between bank credit, production, productivity and increase in income levels. 

78. Whether SAA Scheme is in vogue now ? 

The SAA scheme was reviewed in December 2004 and it was decided to dispense with the restrictive provisions of the scheme, while retaining the positive features of the SAA, such as, credit planning and monitoring of the credit purveyance. Accordingly, under SAA, the allocation of villages among the rural and semi-urban branches of banks were made not applicable for lending except under Government Sponsored Schemes. 

79. What is e-Agriculture? 

e-Agriculture is a global Community of Practice, where people from all over the world exchange information, ideas, and resources related to the use of information and communication technologies (ICT) for sustainable agriculture and rural development. 

80. What is Kisan Rath ? 

Kisan Rath mobile app facilitates farmers, FPOs and traders across India to search and contact the transport service providers for transporting the Agriculture & Horticulture produce. The app interfaces with major transport aggregators and also allows individual transporters to register their vehicles and provide services to farmers and traders. 

81. What is a Custom Hiring Centre? 

Custom Hiring Centre (CHC) are basically a unit comprising a set of farm machinery, implements and equipment meant for custom hiring by farmers. The main objective of CHC is to supply of farm implements to small, marginal and poor farmers at subsidized rates on hire. 

82. What is meant by Animal Husbandry ? 

Animal husbandry refers to livestock raising and selective breading. When the knowledge of animal husbandry is incorporated with standard business practices, it is called Livestock Management. 

83. Which is known as Green Gold or Poor Man’s Timber? 

"Bamboo" is called as Green Gold.  Bamboo is commonly called as the Poor Man's Timber. 

84. How the Negotiable Warehouse Receipt (NWR) system is useful to farmers? 

Negotiable Warehouse Receipt (NWR) system enables farmers to store their produce for safe and scientific storage and preservation in warehouses near their farms and to seek pledge loan from banks against the NWRs issued against deposit of their stock. 

85. What is PM-AASHA ? 

Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) is an umbrella scheme aimed at ensuring remunerative prices to the farmers for their produce. 

86. When the National Commission on Farmers (NCF) was constituted and who was the First Chairman of NCF? 

The National Commission on Farmers (NCF) was constituted on November 18, 2004 under the chairmanship of Professor M.S. Swaminathan. 

87. When World Food Day is celebrated and what is it’s importance ? 

World Food Day is an international day celebrated every year worldwide on October 16 to commemorate the date of the founding of the United Nations Food and Agriculture Organization in 1945. 

88. When World Food Safety Day is celebrated ? 

World Food Safety Day is June 7. The Food and Agriculture Organization of the United Nations which sponsors World Food Safety Day 

89. What is a Buffer Stock? 

A Buffer Stock is a system or scheme which buys and stores stocks at times of good harvests to prevent prices falling below a target range (or price level), and releases stocks during bad harvests to prevent prices rising above a target range (or price level). 

90. What is the Yield Gap? 

The Yield Gap is the difference between actual farm yield and the yield potential with good management that minimizes yield losses from biotic and abiotic stresses, is a key biophysical indicator of the available room for crop production increase with current land and water resources. 

91. What is ATMA ? 

Agricultural Technology Management Agency (ATMA) scheme is benefitting the majority of farmers in overcoming the technological gaps in the industry. The scheme aims at centralising the management of agricultural technology transfer by making organisational arrangements and deploying innovative technologies. 

92. What is a Nature Positive Economy ? 

A Nature-Positive Economy is one in which businesses, governments and others take action at scale to minimise and remove the drivers and pressures fuelling the degradation of nature, to actively improve the state of nature itself and to boost nature's contribution to society. 

93. What is a Cold Chain ? 

Cold Chain is the series of actions and equipment applied to maintain a product within a specified low-temperature range from harvest/production to consumption. In other words, the term denotes a low temperature-controlled supply chain network used to ensure and extend the shelf life of products, e.g. fresh agricultural produce, seafood, frozen food, photographic film, chemicals, and pharmaceutical products. 

94. What is Regenerative Agriculture ? 

Regenerative agriculture is a holistic farming approach focused on enhancing soil health, biodiversity, and ecosystem resilience. It aims to restore degraded agricultural lands and mitigate climate change by promoting practices that improve soil organic matter, increase carbon sequestration, and reduce reliance on synthetic inputs. 

95. What is  AgriStack ? 

AgriStack  is a collection of technologies and digital databases that focuses on farmers and the agricultural sector.  AgriStack will create a unified platform for farmers to provide them end to end services across the agriculture food value chain. 

96. Who are Semi Medium Farmers? 

Farmers with  landholdings between 2-4 hectares are Medium Farmers.. 

97. Who are Medium Farmers ? 

Farmers with  landholdings between 4-10 hectares are Medium Farmers. They may have some access to modern farming techniques and equipment, but may still face challenges in terms of market access and credit. 

98. Who are Large Farmers ? 

Farmers with large landholdings, typically more than 10 hectares are Large Farmers. They often have access to modern farming techniques, equipment, and markets, and may be able to produce crops on a commercial scale. 

99. Who are Tenant Farmers? 

Tenant Farmers are farmers rent land from others and cultivate it. They may face challenges in terms of land security and access to credit. 

100.Who are Sharecroppers ?

Sharecroppers are farmers cultivate land owned by others and share the produce with the landowner. They often face challenges in terms of land security and access to credit.

101. Whether Ministers/Chief Minister are to be involved in SLBC Meetings? 

The Chief Minister/Finance Minister and senior level officers of the State/RBI (of the rank of Deputy Governor / Executive Director) may be invited to attend the SLBC meetings. Further, the State Chief Ministers are encouraged to attend at least one SLBC meeting in a year. 

Sekhar Pariti

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