Scale of Finance
Definition:
Scale of Finance refers to an indicative cost used as a base to determine the amount of financing for a farmer. It varies based on the type of farming practices and the crops or livestock involved.
- Traditional vs. Modern Farming: The scale of finance is often given as a range because the cost of cultivation for traditional farming methods may differ from that of modern methods. The lower value of the range typically applies to traditional methods, while the upper value applies to modern practices.
- Annual, Perennial Crops, and Livestock: The scale of finance is determined for different types of crops (annual and perennial) and livestock. Livestock financing is often referred to in terms of unit costs, with specific units defined for different types (e.g., two milch cattle, a minimum of 10 sheep or goats, or at least 500 poultry birds).
Factors Influencing Scale of Finance:
- Type of Crop: Varies from crop to crop.
- Nature of Crop: Different between improved and high-yielding varieties (HYVs) of the same crop.
- Season: May vary by season for the same crop.
- Type of Land: Differences based on land type, such as irrigated vs. dry.
- District/Area: Variations occur across different districts for the same crop.
How Scale of Finance is Fixed:
- District Level Technical Committee (DLTC): The Scale of Finance for each district is fixed by a committee known as the DLTC.
- Members of DLTC: Includes representatives from the lead bank of the district, NABARD, local co-operative and commercial banks, and officials from the Department of Agriculture & Animal Husbandry.
- Meetings: Chaired by the District Magistrate/District Collector and convened by the respective Lead Bank District Manager.
