8 Project.pptx gfuyghurhjyg yv ygh ytjyev

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1. Project approach in financing agriculture Financial, economic and environmental appraisal of investment projects

2. Project Project is an investment activity where in we spend the capital resources to creat a productive asset for realizing benefits over time. Projects arc the cutting edges of the development. It is an investment activity meant for providing the returns for specific clientele group for specific activity, specific objective and specific area development.

3. TYPES OF AGRICULTURAL PROJECTs

4. 1. Water RESOURCE DEVELOPMENT PROJECTS: A capital intensive project. To reap the benefit of irrigation the farmer should not ignore the supporting services as extension, marketing, credit and transportation both for handling crop produced and supply of inputs needed. The economic analysis must take full account of all the attributes costs and benefits streams. These projects aimed at bringing about over all agricultural development, by bringing water to the project area, providing drainage and reclamation of the soil salinity. Example: Ground water projects and irrigation projects etc.

5. 2. Agricultural credit project It makes the viable commercial operation. To enable a larger number of farmers to make needed investment to improve their income and level of living. The objectives of these projects are to initiate the process of liberalization of the farm credit through the introduction of a completely commercial investment credit line for farmers. Bank loans used the government to refinance the sub loans made by the participating banks to farmers and farm contractors to finance their investment and working capital requirements. NDB of the BRICS countries has approved loan to MP for infrastructure projects. Loan will be used by Indian government for on lending to MP government for rehabilitating major district roads.

6. 3. Agricultural development projects These are the projects aimed at improving the economy of the individuals and the regional development. Diversified cropping systems approach as well as farming systems approach are followed to bring development in agriculture. 4. Agro industries and commercial development projects These projects help improve the adequacy and timeliness of input supplies and specialized services to farming, forestry and fisheries or else help improve the storage, processing and marketing systems, includes projects of input supply, service to farmers, processing storage, marketing development and fisheries development.

7. Fixed set of objectives: The project starts when the objectives is finalized. The project comes to an end as soon as the objectives are attained. Tenure: Project is never a continuous activity, it has to come to an end. Its life span is fixed. T eam work: It needs a team to accomplish various activities. Unique: All projects are unique in themselves, no two projects are exactly similar. Made to order : The customer always decides the objective and informs the constraints like time and cost vi. Single entity: Generally, projects are the responsibilities of a single person/entity but certainly there are many participants in a project, who are helping the single entity in the accomplishment of project objectives. Multi-skilled staff: The staff needed for a project, including the project manager needs to have a wide range of skills including technical skills, human skills, financial skills, negotiation skills, etc. Characteristics of a project

8. Subcontracting: it is needed for use of specialized knowledge. Hired for small duration or specific job from outside agency. Risk and uncertainty: projects are risky as the activities involved in projects are non-retrievable, risk can be reduced considerably using various: Forecasting techniques Project management Control tools Life cycle: like all living organisms, project starts slowly (definition phase), then starts building up in size (planning phase), then reaches peak (implementation phase) before finally getting terminated. Characteristics of a project

9. Benefits of an agricultural project

10. Greater physical production : For example, irrigation project will increase production. In case of credit the farmers are enabled to buy inputs which would boost output. This will increase additional food intake by the farmers' family or sold in the market. Q uality improvement: For example, a dairy project helps in the processing of milk into milk products, which has higher value (value addition). Change in location and time of sale: In marketing for example, the storage facilities as a public undertaking will create time utility and when the price increases the sale could be undertaken again, as the road construction will trans-ship the products to distance market which will add place utility. C hange in form: Processing of fruits, vegetables, animal products create form utility and also time utility which accrues benefit to the producers. In creased value of output:

11. Cost Reduction: Gains from mechanization: Use of tractor or other machinery may increase or may not increase output but reduce the cost per unit of the products. Mechanization may replace human labor reducing cost but human labor should find alternative source of employment. Reduced transportation cost: Better transportation facilities in transferring agricultural produces from the point of production to the point of sale may reduce cost which may be shared by the farmer, transporters, and consumers. Losses avoided: Better equipment reduces loss with the increased efficiency. By: Dr. Payal

12. Other Kinds of Direct Benefits: For example opening school for both formal and non-formal education increases the earning capacity of the educated persons. Secondary costs and benefits: These arise outside the project and this should be used in economic analysis not in financial analysis. For example, some projects like building of dams increases the employment opportunity which increases income and has a multiplier effect. Intangible Benefits: Intangible benefits comprises of better income distribution, national integration, a better life for rural people and better national defcnce .