Financing Small and Marginal Farmers:Bankers Issues

Abstract

Agriculture in India has been exposed to specific types of risks which adversely affect income of the Small&Marginal farmers, livelihood and financial sustainability of small-scale farming. The frequency and severity of these risks have increased over the past several years. Risk management is and will be a key driver of policy in agriculture. Catastrophic risks affecting agriculture will continue to require government action to ensure quick recovery. This is particularly the case for risks and risk management strategies involving externalities like pest and disease risks. The challenge ahead is separating this legitimate policy objective of assistance to disasters from the management of "normal risks" and the provision of general income support to agriculture. Governments must recognize the interconnectedness of agricultural risks and focus on a holistic approach to risk management in agriculture.