Introduction to NABARD schemes for fish farming
Fish farming business is a form of aquaculture in which fish are raised in enclosures to be sold as food and it is the fastest-growing area of animal food production. Today, half the fish consumed globally are raised in these artificial environments. Commonly farmed fish species include salmon, tuna, cod, trout, and halibut. Natural fish food organisms were generated by adding organic and inorganic manure to water and the multi-species use this food based on the tropic system in the pond. The consumption rate and demand for fish are increasing by current population growth. Sea and rivers are the major sources of fish. But the amount of fish from those natural resources is decreasing due to the high volume of fish collection. As a result, setting up a fish farming business is a must to meet up the nutritional demand of Indian people. Increased demand for fisheries growth in the country attracts people from all sectors rather than traditional fishermen and people from the coastal belt. Adopting new technologies such as aquaponics, backyard fish ponds, or tanks are allowed us to set up fisheries activities even in restricted little spaces. Banks are providing fisheries finance in which activities included marine fisheries, inland fisheries, and brackish water scheme.
A step by step guide to NABARD schemes for fish farming in India
NABARD (National Bank for Agriculture and Rural Development) is a development financial institution in India that manages credit-related concerns such as planning, policy, and operations for agriculture and rural undertakings. NABARD is a provider of funding for agriculture-related activities and also for rural development. The institution’s prime focus area is the development of rural areas nationwide. It works around three main areas include finance, development, and supervision of the agriculture sector.
What is NABARD?
National Bank for Agriculture and Rural Development (NABARD) is a financial institution that was set up by the Indian government to promote sustainable agriculture and rural development in India. The functions of NABARD include the propagation of technological innovations, financial solutions, and non-financial solutions, and institutional development.
Who are eligible for the NABARD scheme?
The eligible candidates for loan assistance from NABARD under the special fund are State Governments, entities promoted by the Government of India, Joint ventures, Cooperatives and Federations of Cooperatives, Farmers’ Producer Organizations, corporate, companies, and entrepreneurs, etc
Key achievements of NABARD schemes for fish farming
Some of the activities undertaken by NABARD for rural development contain;
- Provision of refinancing support
- Improving rural infrastructure
- Preparation of credit plans at a district level and encouraging banks to achieve targets
- Supervision of RRBs (Regional Rural Banks) and Cooperative Banks
- Development of sound banking practices within the economically backward sections in India
- Training artisans to develop handicraft activities and also offering them help in marketing their produce
- The SHG Bank Linkage Project that was developed by NABARD has become one of the most noteworthy microfinance projects at a global level
- NABARD has designed the Kisan Credit Card that has benefitted crores of farmers in the country
- It takes credit for having financed one-fifth of the rural infrastructure of India
- The institution pioneered watershed improvement for climate-proofing
Types of fisheries in India
Fish is easily digestible and a cheap animal protein is drawn from natural sources of water. Though, due to pollution and overexploitation, the availability of fishes in natural waters has considerably declined. This has forced scientists to adopt methods that might help increase production.
India ranks second in the production of inland fishes. Some states like Andhra Pradesh and West Bengal rank among the biggest producers of inland fishes. The farmers in Andhra Pradesh have produced co-operatives to take up farming as an occupation.
In India, types of fisheries include;
Inland Fisheries – This refers to fish cultivation in freshwaters such as ponds, lakes, rivers, canals, and tanks
Marine Fisheries – It deals with the production of fishes from brackish water and the sea.
Features of NABARD schemes for fish farming
- Providing support by refinancing or funding
- Building infrastructure in rural areas
- Preparing credit plans at the district level
- Guiding the banking sector in achieving their credit targets
- Supervising Regional Rural Banks (RRBs) and Cooperative Banks
- Designing new projects for rural development
- Implementing the Government’s development schemes
- Training handicraft artisans
Functions of NABARD schemes in fish farming
- Providing financing services for the improvement and development of rural India
- Organizing and managing funding programs for agriculture and farming activities
- Policymaking for rural financial institutions
- NABARD provides funding services for the development of food parks and food processing units in designated food parks
- NABARD offers lending services to warehouse and cold chain and cold storage infrastructure
- It provides short-term and long-term refinance services to its customers providing direct refinance services to cooperative banks
- It offered credit facilities to marketing federations
- Specializes in providing long-term irrigation and rural infrastructure development funds
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Eligible activities for the provision of bank credit for fish farming
As per existing guidelines on project formulation and financing under-investment credit, the operational cost or recurring cost for the first operational cycle is included in the capital cost and is capitalized. Further, the surplus generated during the first year must be generally sufficient for meeting subsequent recurring expenditures. On the other hand, borrowers who have availed of investment credit from banks can be requiring credit for subsequent increased working capital operations. Further, the fishermen not availing investment credit from banks also need working capital assistance. Because of this, while extending working capital finance, the banks ensure that credit requirements are realistically assessed and only genuine credit requirements are financed by them as per scales of finance recommended by the District Level Technical Committee (DLTC).
The following activities can be eligible for financing by banks;
(i) Inland fisheries aquaculture such as fish culture, fish seed hatchery, reservoir fisheries, integrated fish farming, freshwater prawn farming, freshwater prawn hatchery, ornamental fish breeding, and farming.
(ii) Brackish water aquacultures such as brackish water shrimp farming, brackish water shrimp hatchery, brackish water fish farming, and brackish water fish hatchery
(iii) Marine fisheries aquaculture (mariculture), edible oyster/pearl oyster culture, mussel culture, seaweed culture, finfish culture,
(iv) Inland/marine capture fisheries
Renewal of cash credit accounts to fishermen
Cash credit limits can be renewed, provided the operations in the accounts are satisfactory, no drawal is outstanding for more than 12 months and the total repayments made are not less than the maximum amount of outstanding reached under the credit limit during the year.
Eligibility criteria for NABARD schemes for fish farming
The criteria involved in the selection procedure of the beneficiaries are as follows. The individual must own or lease any of the fisheries-related activities such as;
- Pond, lake or tank
- Open water bodies
- Raceway and hatchery
- Rearing farms
- Licensed fishing properties
The beneficiaries must be in any of the following professionals or Associations that are involved in the Inland Fisheries and Aquaculture;
- Individual or association of Fish Farmers
- Self-Help Groups
- Joint Liability Groups
- Women Groups
- The Marine Fisheries who possess
- Leased or registered Vessel or Boat
- License or permission for fishing in bay and sea
- An association with the State Fisheries and allied activities
Banks may take such security from Individual fishermen or groups of fishermen respectively as may be appropriate and necessary, as per the guidelines issued by the RBl in this regard. In case arrangements for sale of catch through primary or central or regional cooperative fisheries societies exist, arrangements can be made for ensuring that the proceeds from the sale of catch are remitted to the cash credit account by entering into an agreement with the society and the borrowers as obtaining an undertaking from the borrower to sell the catch through the concerned society.
Interest subvention and lending rate of interest from NABARD
The Department of Fisheries, Ministry of Agriculture, and Farmers Welfare shall pay the interest subvention amount to NABARD till due outstanding loans and interests are fully paid off. Subject to provisions of FIDF, the interest subvention shall be the difference between (a) costs of borrowing by NABARD/NLE (inclusive of interest, taxes, fees, and charges, etc.) plus fund management cost of 0.6% per annum, and (b) the rate of interest charged on loans to Eligible entities (EEs) by NABARD/ NLEs.
Department of Fisheries, Farmers Welfare and Ministry of Agriculture shall make adequate annual budget provision for interest subvention to NABARD/NLEs for 12 years covering the entire repayment period of loan by the EEs under Fisheries and Aquaculture Infrastructure Development Fund based on an annual plan submitted by NABARD. NABARD will submit quarterly claims of interest subvention of all Nodal Loaning Entities (NLEs).
Department of Fisheries subject to the availability of funds places in advance, the quarterly interest subvention amount with NABARD. Though, interest accrued on the Government of India fund placed as advance at the disposal of NABARD by Department of Fisheries towards meeting the interest subvention liability of NLEs would form part of corpus funds of FIDF. Such accrued interest shall be suitably accounted for by NABARD and informed to the Department of Fisheries from time to time to ensure that it is suitably adjusted in subsequent releases to NABARD by the Department of Fisheries.
NABARD rate of interest under fish farming schemes
National Bank for Agriculture and Rural Development (NABARD) offers financing solutions with interest rates starting from 4.5% per annum. They offer short- and long-term refinancing along with direct lending and the tenure of the refinancing can range from 18 months to more than 5 years.
(i) The projects sanctioned to State Governments and entities promoted by the State Governments (with government guarantee) shall carry an interest rate as applicable for the projects sanctioned under Rural Infrastructure Development Fund (RIDF) of NABARD, that is Bank rate applicable at the time of sanction less 1.50%. Reserve Bank of India will decide the bank rate from time to time.
(ii) In respect of other categories of promoters, the rate of interest charged on the term loan shall be linked to Prime Lending Rate (PLR) of NABARD, and risk rating will be the base for risk premium for the borrowing entity. The borrowers or projects having the risk score below the hurdle rate (60 marks) are not considered for loan assistance from the Fund. Depending on the total marks obtained by the entity, the rating of the agency will be done and the applicable risk premium will be added over and above the Prime Lending Rate (PLR) of NABARD. The risk premium may wary up to 0.01 to 0.03% per annum based on the risk rating. The current PLR of NABARD is 7.45%.
The future of fish culture in India
From time to time, the Government has come up with several schemes to support fish culture. One such scheme is the Development of Inland Fisheries and Aquaculture, which was launched during the Tenth Plan. The scheme assists farmers in building ponds.
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Assuming the cost of construction of a fish pond in hilly regions and plain regions is Rs. 3Lakhs and Rs. 2Lakhs respectively, the government provides a 20% subsidy to farmers. 20% subsidy is also given for renovating or reconstructing an existing pond, assuming the cost is Rs.6,000 per hectare.
NABARD subsidy and loans for fish farming
A subsidy is available for various items such as Pond Development, construction of New Ponds, first-year inputs, etc. under a centrally sponsored subsidy scheme implemented by the majority of the State Governments through Fish Farmers Development Agency (FFDA’s) for different categories of farmers.
The following category of borrowers is eligible to avail credit.
a) An Individual.
b) A company.
c) A Partnership firm.
d) A co-operative society.
e) A group of fish farmers.
f) Producer companies/ organizations / groups
Rate of interest
Interest rate to be charged to the ultimate borrowers would be as indicated by a bank/RBI/NABARD from time to time depending on the quantum of bank loan amount and the agency providing the loan. Banks are free to decide the rate of interest within the overall RBI guidelines issued from time to time. Though, the ultimate lending rate has been considered as 13 % for working out the bankability of the model project.
Rate of refinancing
NABARD refinance is obtainable for setting up of cold storage unit provided the same is technically feasible and financially viable. Given priority attached to exports, NABARD is agreeable to give refinance as per existing norms. NABARD gives refinance assistance for fish culture to commercial banks, cooperative banks, and Regional Rural Banks. The rate of refinancing is fixed by NABARD from time to time.
The loan promoters of the units can approach any financing bank for finance. In most of the Government supported subsidy loan schemes, it is compulsory to take a bank loan to avail subsidy. Therefore, while deciding means of finance promoters should be careful. A bank loan of about 75 to 90% of the total cost of development shall be available from the financing institution. Bank loan considered in this model is about 75%.
Role of NABARD in the development of fisheries/fish farming units
Because of the importance of the fisheries sector in the national economy, NABARD is playing a pivotal role in the development of the sector through;
- Financial assistance for fisheries and related activities,
- Support for infrastructure development,
- Funding for technology promotion activities,
- Implementation of externally aided fisheries projects.
Consultancy Services of NABCONS (NABARD Consultancy Services) are available for preparation, appraisal, monitoring, evaluation of schemes and projects, etc. for various activities/ investments in fisheries as shown below;
1) Fisheries Co-operatives
- Mechanized Vessels – Trawlers, Gill Netters, Purse Seniors, Long Liners, and double Rig Trawlers.
- Others – Catamarans, Canoes, and plank built boats with Nets.
- Motorization – Replacement of Engines or New Engines.
- Traditional Boat and Nets
- Caro Hatchery
- Air-breathing Fish Farming
- Fish Seed Rearing
- Integrated Fish Farming – Paddy cum fish, Poultry cum fish, Piggery cum fish, Dairy cum fish, Duck cum fish, Plantation/ Horticulture cum fish earning.
- Running Water Fish Culture
- Semi, Intensive Fish Culture
- Fresh Water prawn learning
- Fresh Water Prawn Hatchery
- Ornamental Fish Breeding
- Brackish Water Fish Farming
d) Fish Processing
- Feed Mills
- Processing Plants
- Sea Weed Culture
e) Infrastructure Projects in the Fisheries Sector
- Sea Weed Culture
- Fishing Harbor
- Fishing jetty
- Riverine Fisheries
- Inland fisheries infrastructure
- Infrastructure for reservoir fisheries
- Cold chain and processing
f) Other Services:
- Monitoring and evaluation of the projects
- Implementation/ monitoring / evaluation of externally aided projects
- Fish Market Management
- Fisheries Co-operative Management
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