Agricultural Finance and Cooperation Mid Term Exam

Timely and adequate finance is important for the farm sector as it enables farmers to invest in seeds, fertilizers, equipment, and other inputs necessary for agricultural production.

Indian farmers often have poor repayment capacity due to factors like crop failure, market price fluctuations, and lack of financial literacy. It can be improved by offering crop insurance, financial literacy programs, and flexible repayment options.

The RBI plays a regulatory role in rural credit by setting policies, norms, and guidelines for banks and financial institutions involved in rural credit. It also monitors and supervises the functioning of rural credit institutions.

<p>The various principles of farm finance include prudence (wise financial management), profitability (ensuring financial gains), liquidity (availability of cash for immediate needs), and stability (maintaining financial security and sustainability).</p> Signup and view all the answers

<p>Loans can be classified based on liquidity (ability to convert assets into cash), security (collateral provided), and purpose (intended use). For example, a crop loan is based on the purpose of farming, while a gold loan is based on the security of gold.</p> Signup and view all the answers

<p>The salient features of the crop loan system include short-term nature, specific purpose of crop production, collateral-free in some cases, and usually tied to the cropping cycle.</p> Signup and view all the answers

<p>CBR</p> Signup and view all the answers