BANKING TRADE AND COMMERCE

CROP FINANCE

The system of crop or seasonal finance was instituted by the Government when it was noticed that the financial assistance rendered through various agencies was not enough to meet the credit requirements of people in rural areas. The system was thus primarily intended to fill the vacuum in the credit facilities caused mainly by legislation relating to debt-relief, money-lending and land tenure passed during recent past.

The advances made by way of crop or seasonal finance are secured by the crops grown by the borrowers. These advances ,are essentially short-term in nature. Their main object is to finance agricultural operations intended for raising crops. Interest rates charged on these advances are very moderate.

The principal agencies which were recognised for advancing crop or seasonal finance were the following:―

(1) Co-operative Societies.

(2) Tagai loans (by Revenue Department).

(3) Grain Depots.

(4) Persons authorised under section 54 of the Bombay Agricultural Debtors' Relief Act, 1947.

In the areas to which the Act was applied from time to time, arrangements for provision of crop finance through different agencies were worked out by the Assistant Registrars of Co-operative Societies and finalised in consultation with the collectors of the districts concerned. Usually such advances are made through co-operative societies to persons who are parties to the proceedings or awards under the Bombay Agricultural Debtors' Relief Act of 1947. In the Kolaba district, however, the work has been allotted to the Revenue Department owing to the paucity of cooperative organisations in that district.

The accompanying statement shows the arrangement for provision of crop or seasonal finance made in the Kolaba district.

STATEMENT SHOWING THE ARRANGEMENT FOR PROVISION OF CROP OR SEASONAL FINANCE MADE IN THE KOLABA DISTRICT.

Table No. 1 indicates advances on account of crop or seasonal finance through co-operative societies from 1946-47 onwards. It would be seen that during the initial period there was little response to the system of crop or seasonal finance. The number of applicants in 1946-47 was only 38. During the next two years, however, the demand for crop finance considerably went up and the number of applicants increased to 712 and 4,762 in 1947-48 and 1948-49, respectively. Throughout this period the Government favoured the applications for crop finance and squarely met the requirements of the agriculturists. In 1948-49, for example, the total amount applied for was Rs. 3,62,301 and the amount advanced by the Government was Rs. 3,60,051. During the following year, however, there was a fall both in the number of applications and the amount of advances.

The table further reveals that the recoveries were comparatively small. This might be due to the scarcity and famine conditions prevailing in the district. The unauthorised arrears especially were increased partly due to inadequate and untimely rains, failure of crops, and partly due to reduction in prices of agricultural produce. After 1950-51, Government completely stopped making any further advances.

TABLE No. 1

STATEMENT SHOWING ADVANCES OF CROP OR SEASONAL FINANCE THROUGH CO-OPERATIVE SOCIETIES, FROM 1946-47 TO 1949-50.

Financial assistance was also made through Grain Depots and by way of Tagai loans. Table No. 2 shows these advances.

TABLE No. 2

STATEMENT SHOWING THE AMOUNT OF ADVANCES FOR CROP OR SEASONAL FINANCE THROUGH GRAIN DEPOTS AND TAGAI FOR THE PERIOD 1946-47-1953-54.

continued..

TOP