Thursday, December 8, 2011

Micro-Irrigation scheme guidelines in India; Steps required for the subsidies program

Guidelines for the Micro Irrigation (MI) scheme as set up by the Central government of India:
  • Subsidy of 50% of the cost of the MI system to be provided to the beneficiary.
  • Subsidy will be split between the Central government – 40% and the State Government – at least 10% while the rest would be paid by the beneficiary.
  • The maximum area covered is 5 Hectares per family.
  • At least 25% of the planned allocation for a district has to be small and marginal farmers.
  • The Panchayati Raj institutions will be involved in the selection of the beneficiaries. They will be represented on the board of the State Micro irrigation committee which will be the arm of the state government in overseeing the scheme.
  • This scheme covers both Drip and Sprinkler irrigation systems. However, Sprinkler systems will be given due consideration only if drip irrigation systems are found to be uneconomical.
  • The implementing Agency (IA) will be appointed by the State government while the Central government will release the funds for the scheme as planned. IA will forward action plans through SMIC.
  • Payment to the farmer/ beneficiary will be in the form of a crossed cheque. The Supplier will be paid by the farmer/ beneficiary.
  • The Manufacturers will have to register with the State Micro irrigation committee to be allowed to supply equipment to the farmers. Further, the equipment must be BIS (Bureau of Indian Standards) certified.
  • The estimated cost of installing drip irrigation systems are as follows. The estimates are as of 2006 in Indian Rupees. This has to be taken as a guideline for installing systems.
Spacing (Metre)


Area, (hectares)



0.4
1
2
3
4
5
12x12
10600
16700
25200
32600
53700
71300
10x10
12100
18000
27700
36000
57900
76900
9x9
12400
22100
35500
55900
61400
81100
8x8
12900
19900
31300
41700
65500
86200
6x6
14400
30200
51200
70300
105800
137400
5x5
15100
32800
56600
83100
117100
150800
4x4
16900
39300
63100
100700
142200
179300
3x3
17900
35600
71400
96100
130800
158300
3x1.5
19700
40200
80500
109700
146100
180900
2.5x2.5
20000
39800
81400
111200
199500
239600
2x2
21300
49800
86400
122700
164900
223400
1.5x1.5
26100
55000
109500
165100
205900
281000
1x1
26500
57600
96500
146500
199900
249200
  •  These estimates are further split into 3 categories as per existing demand and network. This depends on level of awareness, proximity to manufacturing units, distance in transportation, and cost of drip irrigation systems. The costs would be estimated for the zones as follows.
Category
Estimates
States Covered
A
Cost as mentioned above
Andhra Pradesh, Gujarat, Karnataka, Kerala, Tamil Nadu & Maharashtra
B
15% higher than Category A
All others except A & the Himalayan belt states
C
25% higher than Category A
NE States, Sikkim, Himachal Pradesh, Jammu & Kashmir, Uttarakhand
  • Scheme covers crops like fruit, vegetables, potato, onion and other tuber crops, spices, medicinal and aromatic plants and all other plantation crops except tea, coffee, rubber and oil palm.
  • For small farm holdings, a group of farmers would be encouraged to avail the benefits of drip irrigation through a common water source up to a maximum of 5 Ha per grouping.
  • In case of Inter-cropping, the farmer decides on the crop and therefore the spacing to be used for cost calculations.
  • Power and Water source requirements as specified by the government have to be met for the subsidy to be sanctioned.
  • The manufacturers need to register with the state government by paying a fee of INR 50,000 per annum. This fee will be used for promoting micro irrigation schemes in the state.
Installation process guidelines will be as follows:
  1. IA will provide list of suppliers to farmers.
  2. Supplier will assess crop water requirement, prepare a cost estimate and submit that to the IA which will be approved by the IA as per requirements.
  3. Beneficiary will make the payment to the supplier as per the cost estimate decided.
  4. After satisfactory installation of system, the IA will release payment to the beneficiary through a crossed cheque or demand draft.
  5. IA ensures that subsidy is paid within a month from the date of installation of the system.
  6. BIS and other quality assurance officials to make frequent inspection of systems to ensure quality.

Reference: http://agricoop.nic.in

Microfinance Industry in India specific to Indian agricultural needs; an Industry Analysis

The MFI industry in India has shown strong growth in the past few years with an upward movement from $0.8 billion in outstanding loans in 2006 to $6.7 billion in 2010. This, along with the strong support of the Indian government for micro-finance, indicates that the industry will continue to see significant growth in the future. Currently, there are more than 3,000 MFIs in India and the 10 biggest organizations represent 75% of the market. This data, the potential growth opportunity, and the size of the untapped market (only 5% of people in Uttarakhand have access to microfinance) suggest that entering this market will be feasible and potentially rewarding (social and financial). In order to be successful within this industry, an organization needs to be well financed and needs to overcome barriers including trust and acceptance of customers.

The major MFI competitors in India include Bharatiya Samruddhi Finance Limited, Share Microfin Ltd, Sa-Dhan Ltd, SKS Microfinance Ltd., International Development Enterprises (IDE), Bandhan and Gram Utthan. While these pan India organizations provide financial assistance to rural areas, they are primarily focused on urban communities; further, their missions are broad and do not specifically cater to the needs of agricultural customers for capital intensive projects. The ticket sizes for loans by the existing MFI’s are considerably lower, have very short payback period and are hence not suitable for capital intensive projects like Micro irrigation. This is especially true for states in north India including Uttarakhand. Further, there is a problem with bank loans as they require collaterals like agricultural land for the loan to be provided.

Additional competitors include other financial service providers, including local Indian commercial and development banks as well as self help groups, cooperatives, and other community savings and loan programs. Some agricultural input suppliers are also beginning to offer financial services and credit for inputs to agriculture. However overall the niche of agricultural financing that we will focus on is very much in its infancy and has a huge untapped potential. 

Microfinance lenders hold the majority of the power due to the extreme needs of customers requiring financial assistance. With the maturation of the microfinance industry, borrowers have started getting the ability to obtain loans from multiple organizations, though even now with the tremendous demand and limited amount of money to lend; this ability is not significant in most parts of the country.  

There is also a problem of supplier network for Drip Irrigation systems in India which further increases the cost of supplying such systems. In fact, the Indian government has identified the areas where this is a problem in categorizing the country in 3 categories of A, B, C with higher levels of estimated cost of drip irrigation systems in B & C to the tune of 15% and 25% higher respectively. These higher increases are due to the problems of farmer awareness levels, proximity to the manufacturing units, distance in transportation, and cost of drip irrigation systems itself. 

Saturday, December 3, 2011

Human Capital Trends of the Future

Nice video in the 'Did you know' series about the Human Capital trends of the future and the challenges faced. It talks about the internet, social media, mobility etc and how little attention we really pay to our 'most' critical asset - Human Talent!

Friday, December 2, 2011

Kya Khayal Hai by Zeb, Haniya, Sawanand & Shantanu (Dewarists)

Came across this new group called Zeb & Haniya (2 cousins from Pakistan) with really soulful voices, singing the most beautiful original melodies I have heard in some time. Their collaboration with Sawanand Kirkire and Shantanu Moitra for the song 'Kya Khayal Hai' on 'Dewarists' was just superb!

Click to check out the episode here - LINK