Demonetization linked issues continue to be a big challenge. Even while the liquidity concerns that the metros were facing for two months are seeing an eased atmosphere as far as availability of cash is concerned, rural sectors continue to be dogged by such challenges of No cash . The situation in rural areas is so grim that the RBI last week had to intervene and advised that 40% of the new currency issued must be earmarked for rural sectors.

Amidst the harvest season especially in the south where Pongal and Sankranthi are big harvest festivals  the  farmers continue to face liquidity crunch and are challenged by shortage of cash. Cash situation has been so grim that it is not enough to help the farmers meet their daily requirements for cash.  “The cash crunch has caused many problems, the main concern is that earlier farmers did not get crop loans because of demonetization. Now, they’re not getting their own money. Farmers who need to get borewells dug or have to buy implements are suffering,” said Farmers’ leader Kurubara Shantha Kumar speaking to Policy Pulse.

But in some rural areas in Karnataka the situation is not as critical as the crisis which gripped the nation. A team of officers of National Bank for Agriculture and Rural Development ( NABARD ) in Karnataka have been working silently on a war footing with the village communities to bring them to terms with the Cashless society. These village volunteers and field workers called “Bank Sakhis” are busy bringing the technologies of Digital India to help them tide over the present cash crunch and train them to reduce their dependence on cash. Under a  project of the National Bank for Agriculture and Rural Development (Nabard) in the women SHG members were appointed as business correspondents or Bank Sakhis, armed with micro automated teller machines (ATMs) or POS machines.

Under the new brief , farmers will be able to pay for their government related payments , repay loans to the District and Rural banks using  Rupay cards instead of cash. Each Village Panchayat office is being equipped with Point of Sale ( POS) for carrying out their payments. This essentially means that if a farmer or a SHG members need credit, the joint signatories do not need to visit the bank branch to withdraw cash. They can use the micro ATMs to authorize payment, which is then electronically transferred to the respective bank accounts of members.

The Bank Sakhi experiment has proved to be very successful in empowering women and bringing convenience to SHG members Karnataka which has been at the forefront of implementation of technology in rural areas and even in the present demonetization scenario the state has shown leadership in implementing such initiatives to the rural economy.

NABARD Karnataka region has started on war footing the project linked to the implementation of Point of Sale (POS) terminals in the hinterlands of the state. Under the grand Financial inclusion program in association with the state government, team of volunteers of NABARD has embarked on installing 10,000 such POS machines which will be Aadhar linked and will accept the Rupay cards for the farmers to carry out their transactions with the village administration, Rural Banks etc for payments towards loans , purchase of material etc.

“ Empowering the farmers with digital technologies to reduce their cash dependence is very important and falls into our plans for supporting development. The implantation of these schemes is a big challenge and we have geared up with introduction of support systems through NGO’s and state government for  doubling rural incomes in six year time frame as promised by the Prime Minister” said M I Ganagi , Chief General Manager speaking to Policy Pulse.

But even while the Prime Minister may have set an ambitious goal to double rural incomes, the question on most minds is whether it’s feasible to implement such a challenging task of digitizing and doubling farm incomes? Given the fact that India has seen doubling of rural incomes in the past every 8-10 years it may seem challenging but many experts in the field believe that it is possible. Karnataka’s rural development and Panchayati Raj minister H K Patil told Policy Pulse , “ Despite the successive drought in several parts of the state, we in Karnataka have demonstrated in the past in several pockets that rural income can be doubled with support in five-six years. We definitely are committed to support the villages and look forward to technical interventions wherever possible” . The fact that the Karnataka government has proactively partnered with NABARD on several of its schemes makes the task simpler.

The team at NABARD look confident that it can work in empowering the rural folks with its well laid out plans. The biggest challenge has been the successive droughts in Karnataka and given the poor monsoons , the implementation of the watershed projects offers a ray of hope. “ We have tied up with  over 220 NGO’s in vulnerable regions which get less rainfall. We are supporting 37 projects of the state government with an outlay of 20 Cr rupees. The mission is simple and objective is to ensure more crop per drop “ said Mr M I Ganagi

To demonstrate the success of such projects , the NABARD and Karnataka government have listed success stories for others to learn from. The Kannamangala watershed project is one such showcase case studies of NABARD.

The Kannamangala Watershed project covering a geographical area of 1413 hectares  and with a population of 3146, being mainly rainfed region . It was prone to drought resulting in decreased ground water and agricultural productivity with single rainfed and mono cropping in a year, leading to endemic poverty and migration.

The NABARD project aimed to address the problem of the area by developing the watershed through soil and water conservation measures along with supporting the landless community through income generating activities. The project also provided training and exposure / demonstration activities to farmers apart from capacity building of the community.

Landless and marginal farmers were motivated to form SHGs and alternate livelihood activities assisted included Sheep and Goat rearing, Dairy (Buffalo and Cow) and Petty shop.  With a meager project cost of Rs.21.07 lakh, covered about 95% of the people in the project area.

The report claims that impact of the project was visible through increased water availability at the end of the project with the borewells operated in the area recorded better and continuous yield. The Diversification of cropping pattern occurred with inclusion of vegetables, horticulture crops and forestry species etc. The project also provided employment to members of landless and marginal farmers.

Various interventions brought out notable changes in environmental, economic and social aspects. The project most importantly increased water availability and continuous availability of water (from 7 months earlier to 9.8 months, post project).  And an increase in cropping intensity (50%) and overall increase in crop yield (22%)

The highlight as the report claims is an overall increase in average household income levels by about 82% (income of agriculturists by 44%, that of agriculture labourers by 90% and income from livestock by 156%). The project has made a sea change to the area with canopy of green cover developing in once dry region.

The Karnataka government and NABARD are now looking at a bigger level intervention in rural economy by both making it cashless and technology supported. In the next phase, NABARD is giving a thrust to take the food processing technologies to the farmers’ door steps. Speaking to Policy Pulse  M I Ganagi , Chief General Manager  said “We are encouraging cooperatives and companies to set up food processing units. We are trying to ensure that we are able to support them through the entire process of setting up , support marketing and establish as a brand” . The growth of several such farmers’ cooperatives has only shown that the concept has worked.

So while the entire exercise is targeting the farmers , it will require a lot more thrust to actually fulfill the promise made to the farmers of India.