Essentials of Farm Financial Management

AUTHOR: S.S. Johl and C.V. Moore
PUBLISHER: Today & Tomorrow’s Printers and Publishers
ISBN: 9788170191315
YEAR: 2009 (Reprint)
PAGES: 164
SIZE: 14.2 X 22.2 X 1 cms.
BINDING: Hard
LANGUAGE: English

ABOUT THE BOOK: For many years, students of agricultural credit in India have by necessity had to rely on text books written in other countries. These foreign text books being oriented to the institutions and conditions prevailing in those countries do not fully meet the requirements of the students here. The primary objective of this book is to bring together under one cover a brief review of the Indian credit institutions and the presentation of the principles of farm financial management using Indian examples and illustrations.
A great deal has been published in the professional journals throughout the world and in India concerning agricultural credit. However, most of the published literature fails to provide the students a comprehensive review of the subjects contained in this book. Published empirical research on Indian Agricultural Economics which could have been used in this text to broaden its application to farm enterprises and conditions that prevail throughout this wide and varied country are not yet available. The authors apologize for using almost in an entirety, examples based on conditions found in Punjab. Since they were both stationed at Punjab Agricultural University at the time the manuscript was written, they could use only the examples and data which were available to them there.
This book is divided into two parts. Part one is a brief description of the structure and operations of the major sources of agricultural credit in India. We feel, it is important to the student of farm credit to have" an understanding of the role and functioning of the major agencies which are the sources of loanable funds to the cultivator. With this knowledge he will be better able to initiate research in this field and probe into the causes of malfunctions in the system. Agricultural Extension worker will be better able to advise their farmer clients as to which source most nearly fits the needs and conditions for the different types of financing in their farm business.
The second part of this book emphasizes the principles of farm financial management. Once capital is borrowed the farmer would need to be guided in its most profitable use and management. Although the examples used here are from Punjab, the basic principles will be applicable to any farm situation regardless of its geographical location.
Extension workers should find the techniques and methods used in this section very helpful in their daily consultations with farmers and lending agencies to provide them with guidance in size of loans to be made, who should borrow as well as who should not borrow, credit and repayment plans and the wisest use of the limited capital-resources available.
Although this text is not a lengthy one the authors feel it can be well used as the basic text for a course in agricultural credit for fourth year undergraduate and first year postgraduate students.

CONTENTS:
I. INTRODUCTION
    The Role of Credit in Agriculture
    Types of Credit
    Sources of Loanable Funds
    Use of Credit

II. VILLAGE LEVEL CREDIT SOCIETIES
    History and Development
    Functions and Objectives
    Membership
    Management and Administration
    Sources of Funds
    Types of Loans
    Limits on Loans
    Interest Rates
    In Case of Default

III. CENTRAL AND STATE COOPERATIVE BANKS
    Central Cooperative Banks (Distt. Level)
    Membership
    Sources of Funds
    Types of Loans
    Conditions for Loans
    Interest Rates
    State Cooperative Banks
    Membership
    Sources of Funds
    Control and Administration
    Conditions for Loans
    Interest Rates

IV. LAND MORTGAGE BANK SYSTEM
    Structure
    Primary Cooperative Land Mortgage Banks
    Membership
    Sources of Funds
    Conditions for a Loan
    Types of Loans
    Interest Rates
    State Cooperative Land Mortgage Banks
    Membership
    Sources of Funds
    Control and Administration,
    Loans : Interest Rate

V. TACCAVI LOANS

VI. PRIVATE LENDING AGENCIES
    Money-lenders
    Traders and Commission Agents
    Commercial Banks
    Agricultural Finance Corporation

VII. ROLE OF THE RESERVE BANK OF INDIA AND THE AGRICULTURAL REFINANCE CORPORATION
    Reserve Bank of India
    Long Term Credit
    Education
    Inspection and Research
    Conclusions
    Agricultural Refinance Corporation
    Sources of Funds
    Length and Size of Loans
    Security for a Loan

VIII. STUDY OF AGRICULTURAL FINANCE
    Importance to the Farmer-borrower
    Importance to Lending Agencies
    Importance to Farm Credit Advisory Service

IX. THE ROLE OF CREDIT

X. BASIC PRINCIPLES OF CREDIT—MANAGEMENT
    Returns—First test of soundness of credit

XI. REPAYING CAPACITY—SECOND TEST OF SOUNDNESS OF CREDIT
    Conventional Approach
    How to fix MCL
    How to Strengthen Repaying Capacity
    Equity
    Resource Imbalance
    Period of Loan
    Type of Loan
    Resource Use Planning
    Improved Technology
    Marketing of the Produce
    Managerial Factor

XII. RISK BEARING ABILITY—THIRD TEST OF SOUNDNESS OF CREDIT
    Maximum Credit Limit
    Other Factors
    How to increase risk bearing ability
    Repayment Plan

XIII. CAPITAL REQUIREMENTS

XIV. OPPORTUNITIES FOR INVESTMENT IN THE FARM—PERMANENT FARM INVESTMENTS
    Investment in Land
    Technology and Investment in Land
    Other Permanent Farm Investments

XV. A CAUTION IN CREDIT
    Medium Term Credit
    Short Term Credit
    Financial Calculations

XVI. USE OF BALANCE-SHEET, INCOME STATEMENT AND PRODUCTIVITY COEFFICIENT IN FARM CREDIT
    Balance-sheet
    Income Statement
    Productivity Coefficients

XVII. LINKING OF CREDIT WITH MARKETING

    APPENDICES
    REFERENCES AND SUGGESTED ADDITIONAL READINGS
    INDEX