1. Animal Husbandry

Subsidies, Loans Provided by NABARD for Fish Farming; Check Eligibility, Rate of Interest and Other Details

Chintu Das
Chintu Das
Fish Farming

Aquaculture which comprises breeding and raising of fishes in an enclosure refers to as fish farming. These fishes are sold as food and in current times, fish farming is emerging as the fastest growing sector as far as animal food production is concerned. Fishes alone from sea and rivers are not enough for human consumption and half of the consumed fish all over the world are raised in these unreal environments. Most common farmed fish varieties include salmon, halibut, cod, tuna and trout.

Due to the extreme demand for fish in India, starting a fish farm business can be a good option for Indian population. Right now, fish farming is not limited to only fishermen and the people from the coastal regions, but many businessmen and entrepreneurs from all sorts of sectors are diving into the fishery sector of the country. New technologies such as aquaponics and tank fish breeding have made it easy for us to start fish farming in the littlest of space. Major banks in the country are providing finances for fishery activities like marine, inland and brackish water fisheries. 

What is NABARD and what schemes are available for Fish Farmers

NABARD is the acronym used for national bank of agriculture and rural development, which is a government setup financial institution for the support and to promote rural development and sustainable agriculture in the country. Functions include generation of new technology, finance solutions, non-finance solutions, and development of institutions.  

Major activities and functions undertaken under NABARD include:  

- Providing financing and refinancing support for the improvement of rural infrastructure 

- Credit plan preparation in the district level and administration of Rural Banks and cooperative banks. 

- Provides funds for developing food parks and food processing units for certain food parks. Apart from that also lends its services to warehouses, cold chain and storage infrastructures. 

- Aids marketing federations by offering credit facilities and also provides specialized long-term irrigation and infrastructure development funds for rural India. 

- Developing good banking practices for the backward sections of India and provide training to the handicraft artisans of the country and also help in marketing the products. 

- NABARD developed the SHG Bank Linkage project and is considered as one of the most remarkable micro-finance projects at the international level. 

- NABARD has financed nearly one fifth of the rural population and infrastructure of India. Also the Kisan Credit Card is developed by NABARD. 

Varieties of fishery in India: 

India sits at the 2nd spot in inland fish production when compared in the world level. Few of the states like Andhra Pradesh and West Bengal produce the highest numbers. In AP, co-operatives are set up for taking up fish farming as an occupation. Varieties of fisheries include: Inland fisheries (fresh water like ponds, rivers etc.) and Marine fisheries (Brackish water and the sea). 

Fish Farming

Provision of credit from banks and eligible activities for fish farming: 

Already prevailing guidelines suggest that formulation of project and financing for the same under investment credit; the cost of operations along with the recurring cost for the very first operational cycle will be included in the capital cost. As for the surplus that will be generated within the first cycle should be ideally enough for the following recurring expenses. Another scenario is where the borrower has already availed bank investment credit might require an extra top up of credit for increased working capital operations. Again another scenario, where the fisherman has not availed investment credit but needs working capital assistance. Considering all these situations, the banks assess the requirement of credit on a real time basis and only the real or genuine cases are favoured as per the finance scales provided by the DLTC (District level technical committee). 

List of eligible activities that are financed by banks: 

- Aquaculture related to inland fisheries like fish culture, reservoir fishery, Integrated farming, prawn farming, prawn hatchery, ornamental fish breeding, fish seed hatchery and farming. 

- Aquaculture related to brackish water like water shrimp farming, shrimp hatchery, brackish water fish farming and fish hatchery. 

- Aquaculture related to marine fisheries like edible oyster culture, pearl oyster culture and mussel, seaweed & finfish culture. 

- Marine or Inland capture fisheries. 

Renewal of fisherman’s credit accounts:   

The fisherman’s cash credit account is renewed if the operations under the account are found satisfactory. Nothing is outstanding for more than a year time and the total repayments that are made are not less than the maximum amount of outstanding that is reached under the credit limit during a year around time. 

Eligibility norms for schemes under NABARD: 

The individual that wants to avail the scheme must own or lease one of the below: 

- Lake, pond, or tank 

- Open water bodies 

- Hatchery and raceway 

- Rearing farms 

- Fishing properties that are licensed 

Beneficiaries may include the below professionals or associations: 

- Marine fisheries who has associations with the state fisheries and allied activities, has a license for fishing in the bay area and owns leased out or registered boat 

- Individual or an association of fish farmers 

- SHG (Self help group) 

- Joint Liability groups 

- Women groups 

Security for Bank: 

The banks might require security from the individual fishermen or a group of the same as per the guidelines issued by the RBI.  

Rate of interest (NABARD) under fish farming schemes:  

Financing solutions that are offered by NABARD include a minimum rate of interest of 4.5 percent per annum. Both short term and long term refinancing and also direct lending option is offered by NABARD. The tenure of refinancing is between a range of 1 and half years and 5 years. 

- Projects sanctioned to the state govt. end other entities supported by the state govt.  shall bear an interest rate as applicable under RIDF (Rural Infrastructure Development Fund) of NABARD, bank rate applicable at the time of sanction be less 1.5%, RBI will decide on the bank rate from time after time. 

- With regards to other categories, rate of interest that is charged on the term loan shall be linked to the PLR (Prime Lending rate) of NABARD, Risk premium on the borrowing entity will be the base for risk taking. If the risk score for a project is below 60 (hurdle rate), then loan assistance is not provided for such projects. Rating of the agency is done based on the total number of marks that is obtained by the entity. Upon that applicable risk premium will be added over and above the PLR of NABARD. Risk premium may rise up to between 0.01 to 0.03% per year based on the risk taking. PLR in current times of NABARD is 7.45%. 

Subsidies and loans provided by NABARD for fish Farming: 

Subsidy is provided for several works like development of the pond, for new pond construction, inputs for first year etc. Implemented by most of the state govts. under a centralized sponsor subsidy scheme through FFDA’s (Fish Farmers Development Agency). 

Eligible Borrowers for availing credit include:  - Individual  - Company  - Partnership firm  - Co-operative society  - Fish farmers group and  - Producer companies or organisations or groups  Rate of Interest:  Interest rates are offered by the banks or RBI or NABARD which changes from time to time depending on the amount of bank loan and the agency providing the loan. All the banks have free will on deciding its interest rate under the issued RBI guidelines. Whatever may be the case, the final lending rate has been kept at 13%, so that the bankability of the model project does not get affected.  Rate of Refinancing:  NABARD refinance can be availed for establishing cold storage facilities taking into account its feasibility and financial viability. Refinancing is available to grab as per the existing regulations and norms. NABARD offers refinance assistance with respect to fish farming to cooperative and commercial and rural banks. The rate of refinancing is not fixed and changes from time to time.

Bank Loan:  

Most cases of Govt. supported subsidy loan schemes, it is mandatory to get a bank loan in order to avail subsidy. Promoters are ought to be careful while deciding on the means of finance. Bank loans that cover around 75 % to 90 % of the total cost for development shall be available from the financing institutions. For these kinds of models, bank loans cover around 75 %. 

Other services of NABARD: 

- Monitors and evaluates different projects 

- Helps in implementation, monitoring, and evaluation of externally aided projects 

- Management of fish market and fisheries co-operatives  

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