Dr. MOHMAD MUSHTAQ KHAN
Agriculture is the backbone of Kashmir's economy. The UT is blessed with diverse agro-climatic conditions that support the cultivation of a wide variety of crops. Agriculture and allied activities, including horticulture, animal husbandry, and fisheries, contribute significantly to the state's economy, providing employment to a significant portion of its population. However, the sector faces a range of challenges, including a lack of modernization, inadequate infrastructure, insufficient research and development, and limited access to finance.
Access to finance is one of the biggest challenges faced by farmers in Kashmir. According to a report by the National Bank for Agriculture and Rural Development (NABARD), only 24% of farmers in the UT have access to institutional credit. The majority of farmers in the region rely on informal sources of credit, such as moneylenders, who charge exorbitant interest rates. The lack of access to formal credit is due to a number of factors, including poor infrastructure, low levels of financial literacy, and the perception of the high risk associated with lending to farmers. In addition, the high collateral requirements imposed by banks and other financial institutions make it difficult for small farmers to access credit.
To address these challenges, the government of Jammu and Kashmir has taken a number of steps to improve access to agricultural finance. The UT government has established a number of institutions, such as the Jammu and Kashmir State Cooperative Agriculture and Rural Development Bank (SCARDB) and the Jammu and Kashmir State Agriculture Marketing Board (JKSAMB), to provide credit and marketing support to farmers.
The SCARDB provides credit to farmers at a low-interest rate of 5% per annum. The bank also provides crop insurance and other support services to farmers. The JKSAMB, on the other hand, is responsible for the marketing of agricultural produce in the UT. The board provides support to farmers in terms of grading, packaging, and transportation of their produce.
In addition to these institutions, the government of Jammu and Kashmir has also launched a number of schemes to support agricultural finance. These include the National Agriculture Development Scheme (NADS), the National Mission on Sustainable Agriculture (NMSA), and the Rashtriya Krishi Vikas Yojana (RKVY). These schemes provide financial assistance to farmers for a variety of purposes, including the purchase of inputs, farm machinery, and infrastructure. Despite these efforts, access to formal credit is still limited in the region, and there is a need for further measures to improve access to agricultural finance.
Looking to the future, there are a number of opportunities for improving access to agricultural finance in Kashmir. One of the key opportunities is the use of technology to improve financial inclusion. The increasing use of mobile phones and other digital technologies presents an opportunity to reach farmers who are currently excluded from formal financial services. Mobile-based services, such as mobile banking and mobile money, can provide farmers with a range of financial services, including credit, savings, and insurance. These services can be delivered at a lower cost than traditional banking services, making them more accessible to small farmers.
Another opportunity for improving agricultural finance in Kashmir is the use of alternative forms of collateral. In many cases, farmers are unable to provide the collateral required by banks and other financial institutions. This is particularly true for small farmers, who may not have sufficient assets to meet the collateral requirements. One solution to this problem is the use of crop insurance as collateral. Crop insurance can provide farmers with a form of collateral that can be used to secure credit. This can help to increase access to formal credit and reduce reliance on informal sources of credit.
Finally, there is a need to improve financial literacy among farmers. Many farmers in Kashmir have limited knowledge of financial services and how they can be used to improve their livelihoods. By providing farmers with training and education on financial services, they can make better decisions on how to manage their finances and access the services they need. This can help to improve their financial resilience and reduce their vulnerability to economic shocks.
The future of agricultural finance in Kashmir looks promising, with the government and financial institutions working towards providing better access to credit and financial services to farmers in the region. With the advent of technology, digital platforms such as mobile apps and web portals are becoming more prevalent, providing farmers with easier access to financial services.
The government of Jammu and Kashmir is also planning to set up agricultural hubs in different parts of the region to promote the adoption of modern technology and provide training to farmers. These hubs will serve as a platform for farmers to learn about new agricultural practices, receive financial assistance, and market their produce.
Agricultural finance is a critical factor in the development of the agricultural sector in Kashmir. While the current scenario presents some challenges, there are also opportunities for improvement, particularly in the areas of technology, collateral, and financial literacy. By taking advantage of these opportunities, the government of Jammu and Kashmir, in collaboration with financial institutions and other stakeholders, can help to ensure that farmers in the region have the financial resources they need to succeed and contribute to the growth of the region's economy.
(Author is Associate Professor, FABS, Sagar Group of Institutions, Chevella Hyderabad)