Page 35 - Banking Finance July 2020

ARTICLE

AGRICULTURE

VALUE CHAIN

FINANCING

(A booster for priority sector lending)

B anks are not only dealing with money; they are from 2016-17 onwards, instead of annual basis as at present.

also catalytic agents in Accelerating the growth
Among all priority sector, Agriculture is the most important
and development of different sectors of the
sector. Agriculture is a source of livelihood for about half of
economy. In a developing economy which is
suffering from inadequacy of capital, certain Indian population.
sectors and sections of the society need special and priority The environment for agricultural finance is further
attention in the matter of funds availability. influenced by the growing concentration of control in the
agricultural sector. Driven by gains from economies of scale
The need of flow of credit to certain sectors of the economy and globalization of the food chain along with access to
known as priority sectors can be traced to the Reserve resources, multinational and other interconnected
bank's credit policy for the year 1967-1968. Several changes agribusinesses have a greater impact in a sector that is
are made (2015) in Priority sector lending norms by the RBI characterized by increasing vertical and horizontal
after the working group (2014) recommendations. The integration.
priority sector non-achievement will be assessed on
quarterly average basis at the end of the respective year Concept of value chain

A Value Chain in agriculture describes the range of activities
About the author and set of actors that bring agricultural product from
production in the field to final consumption, wherein at each
Pravindra Kumar stage value is added to the product. Value chains may
Senior Manager - Faculty include a wide range of activities.
Staff Training Centre
Union Bank of India Value Chain (VC) involves the sequential linkages through
Kolkata
which raw materials and resources are converted into

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