The National Bank for Agriculture and Rural Development (Nabard) is promoting entrepreneurship among farmers with value addition, marketing and direct selling of their produce, says R Anand, its chief general manager and officer-in-charge of Chennai regional office, in an interview to TOI. He also estimates there will be a notable increase in rural MSME credit offtake this fiscal. Excerpts:
What is Nabard doing to help farmers get better prices?
Nabard is working with farmer producer organisations (FPOs) to cut out a few layers in the value chain. There are 8-10 middle layers in each commodity such as retailers, distributors and sub-distributors, resulting in farm gate prices being nowhere near what consumers pay. A bit of value addition such as sorting, processing, grading will make a huge difference. So we’re aggregating at the farm gate and helping with marketing and direct selling through online portals. We have onboarded 100 FPOs to open network digital commerce (ONDC), providing grants for cataloguing and technical support.
Despite big promises, aren’t most FPOs in the state inefficient?
Some FPOs are doing well with increase in exports and sizable increase in balance-sheets. And, 56% of promoted FPOs are in the Grade A category, which means they perform better on various parameters such as output, sales, governance. Yet, overall performance is not up to the desired extent. The problem is that producers have to do this dual role of producers and entrepreneurs. They put in hard labour for months. But we’re trying to build entrepreneurial spirit among them with grants, mentorship. It will take time.
What are your efforts to revive dysfunctional FPOs?
Chennai regional office is making a first-of-its-kind effort to create a system of merger and acquisition of FPOs. We are studying the possibility of merging a few low-performing ones, making them a little compact.
Why do FPOs struggle to brand and market their produce?
The problem is each organisation has its own brand. So, there are 15 different brands for ‘murukku’. Now in Nabard Chennai region, we are advocating federated branding with a standardised product. With our Madurai Agribusiness Incubation Forum (MABIF), 10-15 FPOs joined hands for a federated brand and they have been supported for product and brand building.
What’s Nabard’s projection for direct financing to state govt/govt agencies?
The bank supported the state govt in an array of infrastructure building activities including construction of colleges, schools, primary health centres, veterinary hospitals, veterinary centres, and roads. Our business involving direct financing to the state govt and state-owned corporations was around `12,000 crore last year. This year there will be a substantial hike. We are aiming to touch `25,000 crore for financing infrastructure projects in animal husbandry, fisheries. We are talking with the govt to identify projects.
What will be the credit demand for MSMEs in Tamil Nadu in FY25?
This year, we are expecting a huge increase in MSME financing. Last year, because of the after-effects of Covid, it had not picked up that much. This year there will be a quantum jump in rural MSME lending.
