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 CROP FINANCE
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01. INTRODUCTION:
Crop production is the most important agricultural activity. All minor or major economic activities in rural areas are directly or indirectly related to this activity.
02. FACTORS AFFECTING CROP PRODUCTION:
a) The factors affecting crop production can be grouped into two categories:
i) Natural factors
ii) Economic and social factors
b) Soil, water and climatic conditions constitute natural factors while availability of capital to meet input requirements like seeds, fertilisers, plant protection materials, etc. and needs of the community are economic and social factors.
03. CROP SEASONS:
a) There are three distinct crop seasons in our country –
i) Kharif : (June / July to September / October)
Crops sown / planted during South-West
monsoon are called ‘Kharif’ crops.
ii) Rabi : (October / November to January / February)
Crops sown / planted during North-East
monsoon are known as ‘Rabi’ crops.
iii) Zaid or Summer : (February / March to May / June)
Crops grown / raised between Rabi and
Kharif are called ‘Zaid or Summer’ crops.
b) The sowing / planting time, however, varies from region to region depending on the availability of source of irrigation – rain, canal, well, etc.
c) Certain crops mature within one season, i.e., 3 to 4 months, some take two to three seasons whereas certain crops take a number of years to yield on commercial basis.
d) Most of the food grains, pulses, oilseeds, vegetables, fodder crops, flower plants, etc. are of one season duration crops.
e) Cotton, arhar, tobacco, jute, etc. take two seasons.
f) Sugarcane is a three season crop maturing in 12 months, although in certain areas it is grown upto 15 to 16 months for better yield. First and second ratoons of sugarcane are also common.
g) Fruit crops, plantations, certain spices, medicinal plants, etc. take a number of years before they start yielding produce of commercial value.
04. SCOPE OF FINANCING:
a) In order to improve the income levels of millions of farmers as also to feed the growing population, it is essential to raise agricultural production in the country.
b) Because of the natural limitations on increasing the cultivable area and the area under irrigation, the total agricultural production can mainly be increased by maximising the per unit production with the help of intensive methods of cultivation along with a judicious use of available irrigation facilities.
c) Such intensive methods include the use of hybrid / high yielding varieties of seeds, chemical fertilisers, insecticides, pesticides and improved cultural practices. Owing to these intensive methods, the cost of cultivation of crops has gone considerably high.
d) The requisite capital for purchasing these improved inputs and services is not available with most of the farmers. There is, thus, a very good scope for financing these needy farmers to enable them to increase their farm production and productivity level.
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