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Agricultural Finance and Cooperation

Agricultural Finance and Cooperation

Teacher

Dr. Saddam Hossen Majumder

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Core Courses

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Course Name: Agricultural Finance and Cooperation

Code and Credit: ASEC2102 (1-1-0)

Course Objectives

  • To impart knowledge and expertise in the field of agricultural finance.
  • To enables the student to understand the business planning and financial management of an agri-business.
  • To become aware of the international models for gauging agricultural debt and the role of the regulators in agricultural financing.

CO - PO Mapping

COs Course outcomes COs mapping with POs
CO1 Understand the principles and practices of agricultural credit and lending PO1
CO2 Analyze the financial needs and challenges of agricultural businesses PO3
CO3 Evaluate and explore the impact of agricultural finance and cooperation on rural development PO2, PO3, PO5, PO7,

Program Outcomes

PO1 : Knowledge Enhancement : Demonstrate knowledge and understanding of essential facts, concepts, principles and theories relating to Soil Science, Agronomy, Horticulture, Genetics and Plant Breeding, Plant Pathology, Entomology and other such areas of agriculture.

PO2 : Professional Enhancement : Understanding the value and processes of life-long learning and professional development.

PO3 : Entrepreneurship Skills : Understanding the processes of setting up and managing viable business ventures.

PO5 : Team Work : Play effective roles in multidisciplinary teams.

PO7 : Data Handling : Collect, analyze and interpret scientific data.

Course Syllabus

Theory

Agricultural finance- meaning, scope and significance, credit needs and its role in Indian agriculture. Agricultural credit: meaning, definition, need, classification. Credit appraisal: 3R’s, 5C’s and 7P’s of credits. Financial system in India- Sources of agricultural finance: institutional and non-institutional sources, commercial banks, social control and nationalization of commercial banks, Micro financing including KCC. Lead bank scheme, RRBs, Micro finance institutions (MFI), Scale of finance and unit cost. An introduction to higher financing institutions – RBI, NABARD, ADB, IMF, world bank, Insurance and Credit Guarantee Corporation of India. Cost of credit. Recent development in agricultural credit. Preparation and analysis of financial statements – balance sheet, income statement, cash flow statement and their financial ratios. Basic guidelines for preparation of project reports- bank norms – SWOT analysis. Choice of discount rate- net present value (NPV), internal rate of returns (IRR), benefit cost ratio (BCR); network analysis- PERT and CPM. Risk in agriculture, risk management strategies and coping mechanism; crop and livestock insurance programmes. Agricultural Cooperation – Meaning, brief history of cooperative development in India, objectives, principles of cooperation, significance of cooperatives in Indian agriculture. Agricultural Cooperation in India- credit, marketing, consumer and multi-purpose cooperatives, farmers’ service cooperative societies, processing cooperatives, farming cooperatives, cooperative warehousing; role and functions of ICA, NCUI, NCDC, NAFED.

Practical

Determination of most profitable level of capital use. Optimum allocation of limited amount of capital among different enterprise. Analysis of progress and performance of cooperatives using published data. Analysis of progress and performance of commercial banks and RRBs using published data. Visit to a commercial bank, cooperative bank and cooperative society to acquire firsthand knowledge of their management, schemes and procedures. Estimation of credit requirement of farm business – A case study.Preparation and analysis of balance sheet – A case study.Preparation and analysis of income statement – A case study.Appraisal of a loan proposal – A case study.Techno-economic parameters for preparation of projects. Preparation of Bankable projects for various agricultural products and its value added products. Seminar on selected topics.

 

References

  1. Johil, S.S. and C. V. More. 1970. Essentials of Farm Financial Management. Today and Tomorrow Printers and Publishers, New Delhi
  2. John, J. Hamptron.1983. Financial decision making: Concepts, Problems and Cases of India. New Delhi
  3. Mamoria, C. B. and R.D. Saksena. 1973. Co-Operatives in India. Kitab Mahal, Allahabad.
  4. Mukhi, H.R. 1983. Cooperation in India and Abroad. New Heights Publishers, New Delhi.
  5. Muniraj, R. 1987. Farm Finance for Development. Oxford &IBH Publishing Company Ltd., New Delhi.
  6. Subba Reddy, S. and P. Raghuram, P., Sastry, T. V. N. and Bhavani Devi, I. 2016. Agricultural Economics. Oxford &IBH Publishing Company Private Ltd., New Delhi
  7. Pandey, U. K. Agricultural Finance in India.
  8. Wiiliam, G. Murray and Nelson Aarson, G. Agricultural Finance. The Iowa State University Press, Ames, Iowa State University Press Ames, IOWA.
  9. www.rbi.org
  10. www.nabard.Org

Session Plan- Theory

Session 1

Agricultural Finance - meaning, scope and significance, credit needs and its role in Indian agriculture.

Introduction to Agri-Finance and Cooperatives

https://www.youtube.com/watch?v=qgLRIAEyeKA

Session 2

Agricultural credit: meaning, definition, need, classification. Credit analysis- 3 R’s, 5 C’s and 7 P’

Session 3

Sources of agricultural finance: institutional and non-institutional sources

Sources of Agrifinance

https://www.youtube.com/watch?v=QNOJs2YQ-Xk

Session 4

Commercial banks, social control and nationalization of commercial banks

NationalizationofCommercialBanksinIndia

Session 5

Micro financing including KCC, Lead bank schemes: RRBs, Scale of finance and unit cost.

Lead Bank Scheme:

https://www.youtube.com/watch?v=mGES5Dmp4cA

RRB:

https://www.youtube.com/watch?v=JwbUPMNIFCs

KCC & Scale of finance, unit costs

https://www.youtube.com/watch?v=kMNwC8IT3A0

Session 6

An introduction to higher financing institutions – RBI, NABARD, ADB, IMF, World Bank, DICGC

Higher Financing Instutions

https://www.youtube.com/watch?v=fcJdekUszeE

Session 7

Cost of credit: Recent development in agricultural credit. Preparation and analysis of financial statements – Balance Sheet and Income Statement

Cost of Credit &Financial Statements

https://www.youtube.com/results?search_query=preparation+of+financial+statements+animated+video+

Session 8

Crop Insurance: its scope , significance and limitations and the potential of newly launched ‘ Pradhanmantri fasal bima yojna’(Prime Minister’s Crop Insurance Scheme

Session 9

Agricultural Cooperation –Meaning, brief history of cooperative development in India ,Objectives, principles of cooperation, significance of cooperatives in Indian agriculture

Session 10

Basic guidelines for preparation of project reports-Bank norms –SWOT analysis.

Preparation of a Project

https://www.youtube.com/watch?v=51XkoK3_FFU

Session 11

Role of Cooperatives in the emerging economic scenario

Session 12

Agricultural Cooperation in India- credit, marketing, consumer and multi-purpose cooperatives, farmers’ service cooperative societies, processing cooperatives, cooperative warehousing

http://eagri.org/eagri50/AECO241/lec11.html

Session 13

Role of National and International Cooperative organizations: ICA, NCUI, NCDC, NAFED

Session 14

Network analysis

https://www.youtube.com/watch?v=eNPwcIzu5NY

Session 16

Risk in agriculture

https://www.youtube.com/watch?v=_Oip7yrCzd8

Session Plan- Practice

Session I

Determination of the most profitable level of capital use

Session II

Optimum allocation of the limited amount of capital among the different enterprises.

Session III

Analysis of progress and performance of cooperatives using published data.

Session IV

Analysis of progress and performance of commercial banks and RRBs using published data

Session V

Visit to a commercial bank, cooperative bank, and cooperative societies to acquire first-hand knowledge of their management, schemes, and procedures

Session VI

Visit to a commercial bank, cooperative bank, and cooperative societies to acquire first-hand knowledge of their management, schemes, and procedures

Session VII

Estimation of credit requirement of farm business – A case study.

Session VIII

Preparation and analysis of balance sheet – A case study.

Session IX

Preparation and analysis of income statement – A case study

Session X

Appraisal of a loan proposal – A case study.

Session XI

Preparation of Bankable projects for various agricultural products and their value-added products.

Session XII

Presentation on selected topics

Reference Books

Our Main Teachers

Prof J Anil Kumar

Associate Dean & MBA (ABM) Coordinator
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  Assistant Professor, Department of Agricultural Economics, M S Swaminathan School of Agriculture