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",.". C. ~".' ' a~~quate'.~,"~'~~:"credit.-support

'. to.'sanall.faraners:

a study

.. ,~ .

. ,. I

II

'. .' EfiID. .lrnaaID,' ' lillIDa:tr3~".,',., ',a1~~

lOpening of non-formaleducation centres will be givenhigh priority in the Sixth Plan

The new 20-point programme : Education

Point No. 16 : Spread nniversal elementary education for the age-group 6-14 wIth special emphasison girls, and simultaneously involve students and volnntary agencies in programmesfor the removal of adult illiteracy.

Article 45 of the ConstitfJtionpromises free and comprllsoryeducationfor all children in the age-group.6-14",earsby 1960. We hal'e not been able 10 fulfil this long standing objective 'despite concerledefforts. By 1990, all Ihe 16.3 crore children estimated in the age-group6-14 will have to beenrolled in elementary schools, either in the formal or non-formal system of edt/cation.

Education to our futurecitizens is the most valuable ~investment country can make. .

.,

t ,ilised"for "', ..agricultural -~pe~ati~~ns.~~ave~~n' .gi~'e~'in :ti~~~'whilCJ -. ~'... ,. - . ",77 'percenf.ilvailed' have ;'been",misusedbecailse 'tbey.wete not given.jn :time~:TIiis'alstnibing feahire bfour "cboperatiVes needs to be removed if they are 10prove really helpful to the farmers.

.T HE ECONOMIC DEVELOPMENT of . "it. developing, ,: country like India depends much au the deveJop-, meut of agriculture. As ir accounts for over 40 percelli of the national income and5S" per cent of the'country's total export earnings, even a small riseinagriculture production would undoubtedly generate' a 'favourable-impact on the economic, development ofthe country. Realising the importance of this core'sector, the, policy'makers have, initiated several prp"grammes 'for the development of agriculture. Thanksfa these~programmes, agric'JIture has beeo/me ~more"and more buoyant and, credit becomes indispensable for ,.farmers of almost all categories. With the steady',implementation of, progressive land reform measures, .the number of small holdings tends to be iucreasing .'year after year, Special programmes are'launched toassist 'small farmers., Hence there is need for defiriing,

','small farmer', For 'the purpose of this study; 'smalifar-mer'-js defined as"one whose net-farm income is not.,sufficient or just sufficient to meet the customary needsof the farm family',

Objectives of the study

ININDIA, it is generally agreed that the small farmershave not benefited in proportion either to their-.numbe"rs or' to .their needs: from the various program-.'mes of rural development. The basic problem facing'the small farmers is the insufficiency of their income. to. meet even 'normalhonsehold expendifure.' Hencecredit, plays a pivotal role in the life of ,the small far-mers, It is clear that the problem of Credit 'for sman. farmers is ,.; complicated, one and cannacbe solved by">:my~ro1ighand ready method. With 'the ' view' to"sttidying the problems' of small' farmers in their'entirety, this'stndy was under/aken. ' The major ab-"jective of this study was to assess the extent 1'0 which ,

J

,

, Credit support to .jsmall farmers.; a study',

O. R. KRISHNASWAMI and K.P. KANDASAMI

small farmers have ~ecured adequate and tirnely~iedit. from differcnt agencies, and to identify the factorswhich affect. securing and repayment of crcdit by smallfarmers. '.....

, This' study is an empirical one and the field survey,method was used' for collection of, the required data.The enquiry covered a ,sainple of 70 sniall farmerschosen at random after identifying the small farmers,spread over 2 revenue villages in Gobichettipalaya~,Block of 'Periyar District in Tamil Nadu.I., The inte?

'.- '. . . ,.\-'i-"vIew techmque' was employed to' collect:;'the relevantdata from tbe sample respondents. p*:

F' d' ~"\h' d- m lllgS ol,4t'e StllY. '. .:~;~~'.' .

N)lmber, of borrowers.-During the y,~~rof survey,(1981), 91.43 percent of sample fanjlHs, borrowed

. L..,

loans ffi1douly a small percentage (8.~79p) of them" did not borrow. The non-borrowers~~rted thatthcy had adequate surplus income from W~;'past yearsand could manage the agricultural opeailons withtheir own funds. '~:~~.., !

;,('-'t ~

Credil.Agencies and amount borrowed/f:~m them-T."' _ Or\,.'\_

As many as 14.06 per cent of the bOI'{0}Vers havetaken loans only from the institutional a~epcies, 48.44per cent 'of them have borrowed from n6n+lnstituliol)~agencies. while 37.50 per cent of the bd'if"wers ha;;,,"borrowed' bOth from institutional and n6tttfusliflrlioii'alagencie,s. Many of the small farmers rek8Tted to bor-

',fmvings fr.om private credit ageJ!cies eit~er,because ~they are easily accessible and flexible regarding the,period of repayment, procedures for lending andsecurity requirements or because' institutional agenci~s'are:relucmnt to open their doors to the'small cultiva-.tors, ,'Majority of the' borrowers (86%) have hor-,rowed, from moneylenders, 47 per cent from .;oope- .

"- .....- :,'

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,~ :',' . 'ji', KURUKSHETRA November 16; 1982

ratlves, a very few (16% ) from commercial banks, and none has borrowed from government' sources.With regard to the amount of loans taken, 65 per centof the total borrowings were'taken from moneylenders,26 per cent from cooperatives and 9 per cent fromcommercial banks. The main reasons for this heavy

';"J~pendence on moneylenders are that their lendingpi"oceduresare relatively simple and credit assisl"nce ,timely. L, : ~: .,

Ninety-seven per cent of the borrowers have bor-rowed for seasonal agricultural operations, 30 per centfor family expenditure, 27 per cent for land improve- 'ment 'and 11 per' cent for purchase of cattle. Out of62 per cent loans taken for seasonill agricultural'.,flperations. 53 per cent of loans have been obtainedfrom, money-lenders; 37 per, cent from cooperativesand, 10 per cent from commercial banks. This ~howsthat'the small farmers are being neglected and by-passed by'the inctitutional agencies. ' -

Adeq~acy. "f credit.-Majori,ty (72.73%) of theborrowers heve .reported that the amount of creditsecured was inadequate. The extent of inadequacyworks out to 56.79 per cent of the totul requirements.

Timeliness of credit.-76.67 per cent of 'sampleboriowers from cooperatives could not get'credit ontime, ,vhereas in, the case of borrowers from commer-cial banks, the corresponding percentage was only 20.Therefore, of these two institutions, !h~ cooperative"'redit falls short of standards of timeliness, an'd delayedcredit is an open' invitation for misutilization. .-This isone of the reasons why many cooperative societiesare not able to ,recover the debts from the farmers and

. give them fresh lo-ans.

Delay.-The extent of delay was 30 to 90 days inthe case of majority (95.65%) of borrowings fromcooperatives and 20 percent inth'e case of 'commer-cial banks. Thus cooperatives have taken'longer time,10 disburse the loans. .' .

The reasons given for untimely credit include lackof funds: (8.70%), callousness of staff (26.90%),shortage of fertilizers (13.04%) in the case of coope-ratives and callousness of staff (100%) in' the caseof commercial baliks. 52.17 per cent of the borrowersfrom cooperatives who reported untimely credit could~.ot give any reason for the delay. - "

Sixty per cent 'of the horr~wers who got unti~eIycredit had to borrow from moneylenders to managethe situation and others (40%) had to delay the agri-cultural operations. ' .

These findingSlead to the 'inevitable conClusionthatin spite of significantprogress made by the cooperativesand other institutional agencies 'in extending credit tothe farmers, due to ,inadequate attention to the credit

XURUKSHETRA November 16, 1982

needs of .the small farmets, ~e benefits havll not Pllr-colated t~ them: Cooperative credit frequently fell-short of standards of timeliness, adequacy and depend- ,ability. The role of ins!itu!ional agenciCi;in fin~cing-small farmers is relatively small in respect of coverage'of both borrowing members and their credit needs.Generally, the small farmers are still unable to geladequate, support from insbtutional agencies.

, Repayment of loans

OUT OF THE 64 borrowers from insbtutional and, non-institutional agencies, one-third (33 %) of'them have become defaulters. The agency-wise break-up of the defaUlters is: Institutional ag~ncies (56%),Non-institubonal'agencies (13%)!ltid bo~ !ri~!itu-ti~nal ~-;'dNon-nlsbtubonal agencies 50 percent.

The amount of outstandings works out to 67.09 percent in the case of moneylenders, 41.67 pet cent 'inthe case of cooperative sOCieties,62.50 per cent in thecase of conimercial banks and 83.78 per cent in tliecase of larid de~el6pnwnt banks. The percentage. ofoverdues to outStandings~orks out to : Moneylenders.17.46 per cent; Cooper~bves 88.30 per cent lU!ldcom-mercial banks 100 per cent. The borrowers haveperhaps given high priority to the repayment, of high-interest-bearing private loans.

Th~ rcasons given by' the sample farmers for non-repayment of loans are: high cost ,of culbvatioll(91%); low price (24%); low yield (29%); highrent (14%); crop fa'ilure (24%); non-disposal ofproduce (14%); small marketable surplus (57%) andnon-receipt of demand -notice' (l % ) . Thus iilade-quacy of income~rising out of crop failure, highercost of cultivabon, ~!c., ll the m"in rll!l~ori~for non-repayment of loans.

Mode and source of repayment.-Majority (72%1of the borrowers ~ v~ repaid their loans in one lumpsum, and' only 28 per cent of them have repaid ininstalments. Ou! of the, borrowers 'who are proniptiil repaying their lo"ns, only 28 per cent rep'!id'IO!\IlSout of their income, 37 per cent repaid out of freshborrowing only, and 35 per cent of them rep~d loansout of both income and new loans raised. This indi-cates that the fresh borrowing rather ihan the incomeconstitutes the" important 'source for repayment of'loans, confirming the inadequacy of income -of the'small farmers. ' '

The findings kad to the conclusion that recoveriesby institutional agencies arc very poor, when comparedwith non-institutional agencies. The increasing over-dues have not only affected the ability of the coop~ra-tives to extend further credit but have also put indoubt thc creditworthincss. Another disq'uieting fca~ture is the borrowing from private inoneylender~whichconstitutes tlieimportant',source of repayment, o(loans.

5'

Factors affecting availability

EXCEPT LAND DEVELOPMENT 'BANK, which covers. a wider area, other agcncieshave a compact areaand hence distance is not a problem for 'most of' thesample farmers.

'Awareness of credit agencies.-All the sample far-mers .were aware of the Illoneylend~rs,cooperativecredit societiesand land de\'elopment bank and only 4per cent of them were not aware of the commercialbanks.' A va~t majority (79%) of the sample farmerswere not aware of lending by Government. Thesample farmers who wer~ not aware of the commer-cial banks were low caste, illiterate farmers.

Attitude towards credit sources.-Almost all the'sample farmers prefer to secure credit from money_lenders. TiJ.e reported reasons for such preferenceare : personal attention, promptness, adaptability to re- .quirements,. repayment adjustability, simple procedure,suitability .of security requirements, etc. Only a fewsample farmers prefer commercial 'banks on accountof their reasonable rate of interest, and easy accessi-bility, and all the sample farmers felt that the interestcharged by the moneylenders was very high.

.Purpose.--Qf the 62 sample farmers who havetaken loans for meeting seasonal agricultural opera-tions, 53 per cent of them have borrowed from money"lenders, 37 per cent from .cooperatives and 10 percent from commercial banks.' In the case of loans formeeting domestic expenses, the share of cooperativesand commercial banks is nil. .

Seale of finance and security.~Majority (72.73%)of borrowers from institutional agencies have reportedthat the scale of finance fixed was inadequate. Securityis not a problem in obtaining credit from cooperatives.Btit out of 10 borr.ower'swho have secured credit fromcommercial banks, 40% of them have offered jewelsand 60% of them 'have mortgaged th,eir lands forsecuring credit. Majority (82%) of the borrowersfrom moneylenders couid secure loan on pers.onal secu-rity. Of tlie28 borrOwers 'from cooperative creditsocieties about 43 per cent of them did not like' thesystem 'of kind competent...Rate of interesl.-AU' the.'sample farmers feel that

rates charged.'by moneylenders are exorbitant and a.few of them (24.24%) expressed resentment over therates charged by instituti.onal agencies.

Period and mode of repayment.-':Fiftyfive percentof the borrowers from cooperative credit societies !ex-pressed that the prescribed mode of repayment wasinconvenient, whereas none expressed" inconv.enienceon the mode. of repayment of..Ioans from commercialbanks. Thirty' percent of the institutional borrower'sreported to have experienced procedural difficulties,mainly with regard to submitti,!g the required. docu-ments.

6

Sodo-economic faetors.~ The social factors suchas .~aste ~nd~uc~tional levei ~~re not associatedwith' s~curing of cr~dit fr~m ~stitutional aglencles;'bJtwhereas the economic factors such as tenurial status,size of. holdings, value of property and the overallsocio-economic st'\t;us were found to be significan\]yassociated with illstitutional borrowing. . . \~

- .' - ,:

Factors affecting repaymentUtilisation of credif.- Two-fifth of the amount bor-. . - .

rowed was diverted for purposes other than agricul- , :ture. The reported reasons for such diversion wererepayment of old debt (14%), urgency of oth~r needs' .\(21%), consumption needs (50%), etc. The percen-tage of defaulters is higher (57%.) among. the bor-rowers who diverted their loans. The relationship't"between the utilisation of credit and repaying capa-city was ascertained by applying the chi-square tcstand it .was fonnd ,of institutional credit' system in financing the smallfarmers and their econQmic conditions.

\.;Ii"KURUKSHETRA November 16, 1982'

The basic problem facing most of the small farmersis the 'insufficiency -of their income to meet even "nor-mal household expenditure. 'Thus the crux of theirproblem is non-viability of their household economy.The remedy lies in over-all development of the rural

.;.jeconomy ~through integrated rural developmen; pro-..'grammes. By establishing' agro-industries and small-scale de-centralised consumer' goods indusfries .,and_by developing various off-farm activities like poultry,dairies, sheep-rearing etc., the small farmers should.be enabled to earn additional income and thus to be-come economically viable. Then only credit agenciescan be able to finance them effectively. O,herwise,credit giv

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I

FSS the, promise and 1the prospect ~(

, ,',"-, G .s. KAMA]'

VaikuDth Mehta National. Institute of Cooperative l\fanagement, PURe

THE STUDY TEAM ON AGRICULTURAL CREDIT.constituted by the National Commission on Agri-culture (1971) stressed the need for formulation andimplementation of policies -and' programmes particu-larly for small farmers and weaker sections' in orderto make them partners in agricultural growth and ruraldevelopment. They recommended the establishmentof Farmers Service Societies in the country espedal1yfor these categories of people. It. was their observa-tion that the existing primary cooperati;es had failed'to take care of them, for a variety of socia-economic '.reasons. . An integrated agricnltural credit serviceapproach in their qse was reqnired. The commercialbanks operating in the rural sect~r were found ~nableto undertake_large scale creditworthy schemes foriildividual slTIall farmers and weaker sections. Theylacked necessary experience for operating credit prog':'ranimes in rural a_f~_as in an effective manner. Fur-ther, whatever credit was extended to the fariners'thr~ugh c~ope.rativ~and commercial banks was notintegrated with easy availability of inputs, extensionand other services, supporting prodnction and market-'ing efforts. This was considered necessary as itres~Ited, in increasing and: improving credit businessthrough institutional agencies, satisfying the .require-ments .of safety, productivity and recovery. The mnlti-. plicity of agenc.ie's in rural areas, providing vadousservices to the same far'pl..ers in isola'tion; aJso generatedconfusion and difficulty in controlling the end-use of,credit. It was agairist this background that the NCArecommended the organisation 'of the' FSSfor eachtehs,l/blockor any other viable unit of convenient.~ize'.with as many br'anches as 'might, be required inthe. area. The.LeadBank of the district would assumeleadership in organising the FSS, provide themtechni-cal and financial support, evolve norms and standards,

8

rules and procedures, in respect of ' financing as alsooverall guidance 'and supervision fulfilling the require-ments of ari -integrated service.

Need for FSSTHE ASSUMPTIONS -underlying the recbrnmenda-.lions of the NCA relating to the FSS were broadlyas follows :- 1-

(i) That small and marginal farmers in particularrequired a specialised agency, which could simul,

,, taneow,ly provide all'the services required by themalong with proper guidar!ce for using the serviceseffectively.(iiY Any effort to reform the existing primarysOCietieswas Iiot going to. solve the problems ofsmall and marginal farmers and weaker sections.. (iii) The FSS with its cooperative form would help" in:mobilising local initiative and local control keep,-ing in view the priorities for, the use of credit andother services.. (iv) The FSS would not bea modifie.d creditsociety~ borrowing loans from commercial Or co-

. ,operative banks but would develop into a powerfullocal nucleuS integrating its credit function with in, ~puts supply and other services under the guidance' "of compete-nt professional management.

. TIle Sixth Plan document observes that the FSS isthe main integrated unit for rural development as itprovides for production and 'investment credit to allunder one roof. The FSS is also expected to createpersonal accord between the society officials and thefarmer-members. It is expected to overcome the defi-ciencies of the existing sinall primary village agrieul- '

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KURUKSHETRA November 16, 1982

II.

tural societies, which had in fact become more pro-nounced in, the case of small and marginal farmersand weaker sections and who were as a consequencecompelled to continue to depend on the, traditionalrural moneylenders. As reported 'by the Committees

..) of Experts on the subject of finallcing rural develop- ment,through co-opera(ives, the major beneficiaries of

co-operative finance have been the big and mediumclass fil,mers, The coverage of small and marginalfarmers has remained at ~n extremely low level, whileth~y constitute bulk of the rural population.. At thesame time, number of primary credit co-operativeshave ~emaincd economically non-viable and' conse-quently very weak. They suffedrom lack of manage~ment skills, discipline which are so fundamental to the

"" successful operation, growth and development of theco-operative concerned _and its member community atlarge.l ; l ;. ';1

The study group appointed by the .Government ofindia in July, .1974 thus developed the concept ofFSS to take care of all needs of small and marginal,farmers and we~ the farmers, generating local savings, employmentopportunities and increased income / levels for betterquality of life.

The model that was suggested for the FSS after due,examination and research was to be promoted throughinitiative of the commercial bank with' the support ofthe State ,government concerned and the Reserve Bankof Iridia." The promoting bank is eXPected to providemanagerial services and guidance, at least in the initialstage till the ~eneficiaries acqnired requisite knowledgeand competence to run the society on their own.,

What FSS hve achieved

IT WOULD BE INTERESTINGto evaluate 'the per-formance of the FSS-The Pawana KrishakSeva Sehakari Sanstha Ltd. against the above back-

S.' ground. 'Tl;is FSS was set up in 1975 at Kale colony,a village about 16 kms. away from Kamshet, a rail-way station on, the Bombay-Poona route. The areaof operation of the' society extends to 36 villag~slocated within 'a radius Of 24 k:ms of the village. Thevillage is located in a hilly region. The roads are in-adequate mid under-developed. Only 14 villages arecovered by the State Road transport while the remain-ing villages are accessible only on foot. The rainfall'is' heavy-between 50"-100" but the water flowsaway, carrying with it the valuable ingredients ,'of the

':'"'KURUKSHBTRA' November 16, 1982

soil. As a result, the fertility, has been going down.The main crop is paddy which is entirelydepelldent onthe monsoons. Other crops out of season;; are notfea~ible because of lack of irrigation facilities. :

ITIS reported that i~ the tot,al population of "'!J0ut20,000 In the 36 vlllages, the small farmers'-(1) families (holding land between 2.5 ana 7.5acres) numbered 13,000; (2) marginal farmers (hold-ing land between 1 and 2.5 acres) uumbered 800;(3) agricultural labourers (holding land below oneacre and 'the landl""s families) 650; and (4) others(artisans a'Ld farmers holding, land ,more than 7.5acres) numbered 1075. Thus; 70 per cent of thepopulation belouged to the small .and weaker sectionsof the society. The area also has been classified, USquite backward in the district (Pune). Til! 197'mploy-ment. Irrigation, however, is only one of the importantinput f'actors. f'v~n its effective use de,pended on, ade-quate and timely supply of other inputs like technicalguidance, finance, marketing etc.

H wa.';, therefore, thought that the FSS would, bethe most appropriate agency to provide necessarym~chanism for integrated development with popularparticipatiou. As. required' under the project scheme,the Bank of MahaIashtra sponsored the Society-anddeputed one experienced official to t1!anagethe Societyin its initial stages. The FSS has incorporated allthe recollIl1lendedcomprehensive objectives in its ,bye-laws with a special focus ou development of small andmarginal far!!!ers, landless labourers; village artisans'etc. The Society gas been expected to provide con-cessional credit in adequate measure for creditworthypurpose and also to sUQP1yagricultural inputs, andessentialt; of daily consumptIon: : Dairy, 'Poultry andFisheries are also expected 10 be encouraged. Appro-priate training arraIlgements' have also to be m.ade by(he FSS. A~ it..grows and develop's, it can considersetting up of processing units, provision of.anim~1feed,stoJage, demonstrations etc, It is also' expected. '10organise marketing services to secure better priceSfOf

, the members and recovery ot loans given [or produc-tion operations through linking. Public, works' in', collaboration with the local administration are also,expected to be taken up for generating employment0pQ9rtunities at the local level. ':

How far this FSShas gone forward to achieve thesecomprehensive 'objectives? What were the factorsresponsible for deficiencies and shortfalls, if any, arid, why?

9

rhe coverage of the _FSS in terms of memhersh,p-by March, 1981 was reported .to be 1093 composedo( small (armel's (331) marginal farmers (305) agri-cultural labourers (217) and others (240)_ The smalland margin~ farmers are grouped as 'A,' categorymembers 'and the. remaining big farmers, artisan"sandthe landless labouren; as 'B' category members. --

The Board o( Direc~ors consists of 11 melnbers, 7of whom are elected by. the members _(5 by category.'N members and 2 by category 'B' members). Theremaining four are (a) Divisional Manager of theBank of M;harashtra (b) the Assistant Registrar ofCooper'!tive Societies (c) the Executive engineer ofCADA and (d) the Managing Director o( the Soeiety(presently.appointed by the Bank of Maharashtra).

Till; OVERALL ASSESSMENT of the performance ofthe FSS is attempted below: .The coverage of fan~lies" into membership o( th-e

Society. was reported to be 29 per cent of tl.e familiesin iis area of operation. The proportion of marginalfarmers and agrienltural labourers was 38 per cent and33 per-ccnt respectively .. For want of detailed statisti-cal data it was d-ifficu!t to ascertain the share of variousclasses -in the loans disbursed over the years. - Thismust be.-'stated as' a 'managerial deficiency in relationto syst~matised r~corCiirig and reporting. Hm,YCVCf, 'itwas reported that nearly 56 per cent o( the loans dis-

. bursed in 1978 were received by the. small and margi-_nal farmers. Their share in the short-term credit was5-3 p~r cent und in thc medium-term credit 65 pcr cent. .The l"edi~m,term loan is advanced for purchase ofbullocks, buffaloes, land improvement etc. The dispen-s~lti~n of tot;tl ]oa_n~ov~r ~ht:f years has been recordinga graduaJ.jncrcase. and these were Rs. 8.21 lakhs in1979,80.. Intcrestingly, enough the proportion ofshort-term. loans showcd a decline from about 80 perc-eni to ji pcr cent while that of medium-term loanswent up to 63 per cent. The loans for purchase ofbullocks (7%) and buffaloes (55%) are particularlyre~ordi~g a big rise.

Encourageplcnt to dairy activity in the r7cent timeshas rewIled in demand for purchase of buffaloes. Ithas been found that dairy farming h~s great potentialin prqvidi.ng ~uppl~Inentary incqrne to farmers. How-ever, (hc"Jarmers in this region have restricted ~heiractivity to purchasing of a .pregnant buffalo which he'maintained for a period of nine -months and sold itafter '-he delivery of the calf. ' In this process he madea profit of about_ Rs. 2000 being difference betweenthe sale price (Rs. 3000) and purchas'e. price(Rs. 1000). Thc maintenance cost was low, duringthe period of owner-ship as grazing lands are available_in plenty in the region. Beyond this.dairy activity wasnot conducted. The reason reported was lack of mar-keting lacilities. Mostly the farmcrs were maintaining

10

one bullock each. and it was bought" out of creditprovided by the FSS. For agricnltural opcrations, thefarmers were lending their bullocks to one another toconstitute a pair. The demand for consumption loanwas particularly high during the monsoon perio4. 'nli~,had helped the fariners to -;educe th~ir depeudence on \~.the loeal money lenders to some extent. ' .

The Society had endeavoured to improve arrange ...me-nts Jor prdviding tcchnical guidance il1 respect ofuse of modern inputs and improved agricultural prac-tices .. Thc Society reported that every year it selectedlew_ plqts .IQr defllonstrqtion purposes. As a 'resultpaddy wliich has been the traditional crop in the: jregion :flUS recorded two-fold increase in the yield per r. acre. This is essentially due to dispersal of n-"w teehe, -+ i.nology.. I.n recent year,s wheat and onion crops arealso". being grown by large number of farmers, _Dis-cu~:sjons. with SO_l1?C farr.!crs revealed that "they were.giving credit for this change ill cropping-pattern an~proquctivity to the FSS.

~Constraints

WHILE THE PROGRESS and 'achievem.ents of the_. FSS would. appear to be encouraging, though ata lill1ifed pace allp scal~, these- were not without con-straints and limitations. The FSS is yet to reach effec"tively and efficiently all the 36 villages in its area of.operation - It was reported that of the total loans ofRs. 8.22 lakhs disbursed, four villages borrowed 72 ...p,r cent 01 the amount (Rs. 5,8 lakhs). All these vil-lages are ill the vicinity of tbe h-eadquarters of theSociety (within 3 kms.). Another 5 villages borrowedloans between Rs. 1 lakb to Rs. 50,000 .. The rem"in-iog .m~ljority of the villages were remotely located aridwete di,flicult to reach regularly.

The FSS was not witho~t problems of overdues. It Iwa_s reported that. the percentage of recovery was 47in 1979-80. The rcasons reported were (a) small .1holdings in majority cases and (b) insufficient mar--ketabil:. surplus. A part 01 the increase in produetion.went :in for rise in domestic consumption. The effrts.were made by the farmers to meet the dues of theSociety through income from buffalo-rearing and. rabicrops--oniol1~ wheat, vegctables. The marketing faci-lities were- very poor ane) the linking of credit to mar-keting Jar automatic recoveries of loans was praeti-~rvcally abSe:nL This 5ituatiol1 demands diversiflcation inloans business, especially for suell purposes as, com~.mercial crop's. ~iry' farming, processing,.' .;lora,ge and-transport.

While infrastructure' for. inigation and electricity. did exist in the' area of the FSS management of these

_ . services by. the oflidals of the respective agencies ,wasrepnrt"d t.o be far from satisfactory. Power- failureand Icilkage o( ,vater- througb poorly constructed

vKURUKSHETRA November 16, 1982

channels have. been affecting adversely power, andwater supply for agricultural operations, At the fieldlevel also maintenance efforts were lacking on thepart of farmers., It is possible t,o arrange a eollecti"Je

, action through the FSS.~i -

As stated, earlier, the iniiiative and enterprise inregard to marketing aetivi.tieson the part of the FSSwas far from satisfactory. An effort made earlier toestablish a link with an urban consumer co~operativeat Pune could not be sustained for selling rice due toits high price: The experience in regard to the priceof onions in 1977 was also frustrating to the fannerswho had to suffer substantial.losses. It w,as reportedthat, the officials of the sponsoring bank also were

'~ exh,biting a 'hesistant. attitude towards this businessof the soc-iety. Perhaps, co~trolover storage trans-port and initial processing facility would improve thecontrol of the. SoCietyover the marketing forces to'the advantage of its members.

,T HE PERFORMANCE 'of the FSS vis-a-vis the artisans, and the landless labourers was almost a non-

starter., The Society could not take the risk of finane-i ' jng artisans for want of marketing organisation at the

taluka or district level. The FSS also exhibited help.-lessness towards the landless labourers.' About 10persons were accommodated for purchase of bUffalOes:Yet a large majority still remained out of the scopeofthe FSS. It can explore possibilities of securing for'

~ the landless a shar~ in the public works, around theregion during off-season pe-rio4.

The FSS cannot be said,to be financiallyadequatelyself-reliant. Its paid up share capital is composed ofcontributionS from its members at Rs.' 1.71akhs aridfro~ the Goveriunent atRs. 40,000. The sponsOringBank advances .Ioans to the FSS for Onwarddispe~sa-'tion'to"the members of the SocietY. The adininistra-tive expenses of the society were Rs. 51,000 (1979-80) which' included the salaries of the staff (thesalary of the 'MD, was b9rne ,by the Bank), travellingexpenses, rent and other administrati~e cost. Therevenue receipts of the Societyfor the year amounted

to Rs. 38,000, thus recording a loss of Rs. 13,000.'The FSS is already burdened with the accumulatedloss of Rs. 30,157. If the cost of MD is passed onto the FSS the size of loss would 'further increase byabout 10,000 per year.'

Suggestions for improvement.

UNDER THESE 'CONDITIONS the FSS should consideririnnediately the, need for improving efforts inregard to recovery of loans, ,and bringing down thelevel Of overdues. This would make additional reosource of Rs. 42,000 for further business per year.It should try to establish link with the District MilkProducers' Co-op~rative Union for supply of mill(produced by the members of the FSS under its en-couragement and support. Tod"J'\ as seen 'earlier,, this activity has remained. restricted to rearing ofbuffaloes 'ouly. 'Similarly, greater initiative and enter-prise are required for marketing of members agricul-tural produce-rice, wheat, oniOn,vegetables etc. Thiswould add to the incOme of the S,?"iety and 'would

, make Its financial base jJroad and balanced.

. This woul.d depend to a very great extent on themanagerial skills and' capacities. It is well known thatrural ,institution.s,are. hy and large under-managed.They lack professional management and there is alsolack of appreciation of it on the pa,n. of the electedleaders of such institutions. The State Co-Operati"eUnion and its district,co-operative boand may have todevote more attention to, the require~ents of the rural. institutions like the FSS in these maiters., There islot of confusion and misundertanding noticed ,aboutthe .role and importance of tge executive managementas a basic input to achieve the goals and objectivesof a relatively larger'co-operative organisation' likelot of confusion and misunderstanding noticed, aboutlocal social workers and train~d executives ~ork, handin hand for the larger good of the beneficiariesnamely,the small and marginal farmers' and the -wi:akersections in its ,irea of operation. 'The FSS has a hugepotential yet the task is stupendous and difficult.

S",'--------~-----~...;....~----....;.....;.-....;.---~--.

A SMALL FAMILY IS A HAPPY FAMILY

..., .

''"Y'KURUKSHETRA November. 16, 1982

11.

A Maharashtra reportI

paving way fOI'

a better life:,1A.K. NARAYANAN *

Deputy Sec;retary, Union Ministry of Rural Developme[lt~

IRDP

ISHOT A ROUTINE question, "How has the IntegratedRural Development Programme (IRDP) helpedyou?" The man with a cheshire cat grin edging hisblack moustache held up his hand, adorned with awrist watch. On the other hand he was holding atransistor of a local make. "I have got a cycle too,"he said proudly. These 'were the' assets of Shri SanduSubhara Pa!,a small farmer of the Nihao1d village,about 15,kms. from Dhule district headquarters acquir-ed through a pair of milch animals supplied in 1979by the District Rural Development Agency under theIRD Programme. He had got two male calves whichhe has sold. :He has got another Pair of male calveswhich' he is keeping for his own 'use. His presentincome is in the range of Rs. 5,000 to Rs. 6,000 perannum.. The same, is the tale of ShWaji Batu Malik,another small farmer has to tell. He was assistoldwith apumpset. Earlier he was having only theKharif crop from his 3 acre land. He.is now gettingthree crops in . year-Bajra, vegetables and pulses.His tota! income is now about Rs. 5,200. He is alsogiving water on hire to his neighbours.

IRDP : the trendsetter

T HERE ARE 86 such beneficiaries under IRDP inNihalcd village who have the same story to tell'how' an active team of DRDA officials led by a dyna-mic Project Director Shri Rathore have transformedtheir lives. 'The small hamlet with its marshy alleys andmud-welled huts, oncll notorious for pilferage, burgleryand the crimes is now pulsating with activity. A glowof prosperity has dispelled the gloom of fnistrationwhich was once expressing ilself in many despiualeacts.

What was it that has imparted its magic lauch inthis far-flung sequestered haml,t of Dhule. apart fromthe dedicated efforts of a team of government officials?It is a primary cooperative society with a talented andtireless 'leader at its head. This multi-purposc co-

operative society is galvanizing and rechannelisi!t1gtheentire encrgies of the population: , The society has nowdraWl] up a lift irrigation project costing Rs. 4 lakhsand wailts the DRDA assis!;!nce to put it through,This miracle would have been a trifle difficult to b""lieve but for the wonders I have personally seen'in this'land of' Shivaji at Kolhapur and Satara which havebeen accomplished under local leadership. The sugarfactories, the local politicians and banks are all one"when it comes to development. Gigantic lift irriga-,,tion schemes 'have been commis;sJoncili'tnmsporlingwater from the only river source available over 10-12kms. I can mention tJte instance of Top Vadgaon "iLift Irrigation Society and Yuvraj Chhatrapati inKolhapur in this context. There are others likeKrishna Sugar Fadory and PanchgangaSugar Factorywho have' also taken a, lead in l1l.ral development.These' sugar factories which are also centres of loc3lleadership headed by eminent politi~ians take initiative'in developmental work, advance the amount required.and guarantee the loan to the banks,

Batu Malik of Nihalod village, Dhule, showing his purnpsetat work which has opened the'doors of prosperity for him.

12 KURUKSHE'tRA November 16, 1982

Spear-heading these activities and giving the officialweight at the appropriate moment is the rural deve-lopment agency under SOORathore. A lean serious-looking beSpectacledman around 40, drawn from theMaharashtra Civil Service, SOO Rathore radiateSI ~~'"energy. He narrated to' me some of the episodes

I' where he had to intervene]on behalf of the terget.group courting indignities and displeasures galore.Orice he had butred into the cosy ollice parlour of abank manager who told him curtly that he shouldhave taken prior appointment. SOORathore wouldnot be cowed down. He told,the exasperated managerthat he could not believe that, though the' Britishershad been onsted from fudia' they have left some

"" shadows behind to. carry on their inhuman traditions.He told me of the countless instances where thelocal banks' have refused to advance loans to theassetiess, class. like agricultural labourers or ruralartisans in spne of the instructions by the ReserveBank of India exemptirig security for loans uptoRs. 5,000. These are the forces which a governmentollicial has to contend with, As one MLA BabuSahah Patil of Shirpur put it, Shri Rathore en-'gaging thesetemptstuous forces and fearlesslyenforc-ing the IRD guidelines has also kept ready an' appli-cation for transfer. -

Trysem programme

THERE IS another institution which is contributing'lie.' to the phenomenal success of the programme in, Dhule, It is Anand.Sadan, literally the Home of Hap-piness. This is run by a Catholic Mission and is headedby'Sister Monica. This institution has been involved inconducting courses in tailoring under TRYSEM. Thefirst batch of 14 persons ~ere trained by this mis-

. sionary institution in the latter half 'of 1981. All the ".trainees were Amvasi ,,:omen, They have trained a

BuHock supplied under the IRD Programme in NihalodvilJage. Dhul-e district

second batch of 24 women in tailoring. The six monthcoursewas rounded off with a ceremony for distribul-

"'I ., KURUKSHETRA Novcm'ber'16, 1982

ing the machines to the trainees. These machineshave been financed by- the. bank of. Baroda. Themanager of the bank was also present in the function.This batch also' includes a number of tribal women.

, it speaks volumes of' the dedication and the inde-