
In the Union Budget 2020, the Modi government has made it clear that it intends to promote marine life. Finance Minister Nirmala Sitharaman in her Budget speech referred to the blue economy and said, by 2022-23, the government aims to raise fish production to 200 lakh tonnes. It will also focus on growing algae, sea-weed and cage culture. But what caught the attention was her emphasis "our government will involve youth in fishery extension through 3477 Sagar Mitras and 500 Fish Farmer Producer Organisations (Fish FPOs). We hope to raise fishery exports to Rs 1 lakh crore by 2024-25."
The Fish Farmer Producer Organisations is a new development. However, experts in the field feel, much depend, on what is done to make these organisations viable. Reacting to this, Vijayalakshmi Das, CEO, Friends of Women's World Banking (FWWB), India, told Business Today, that it would be important to know how do we intend to make these fish farmer producer organisations viable, especially at a time when the agri-based farmers are in distress.
She says, FWWB, India is working with about 80 well-established FPOs in agriculture. However, she said, "we find that becoming viable is still a challenge that most are facing. We have lent them to meet their working capital needs and help build market linkages and also to help them diversify the income-generating sources. This is crucial so that there is a favourable impact at the level of households of the farmers involved.
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According to Das, the most critical element that needed to be attended for farmer producer organisations was ensuring that the complete value chain from production to market get established and in case of fish, even export market, cold storage and other infrastructure get into. She added that the biggest challenge faced by many of the farmer producer organisations was getting regular working capital from financial institutions.Move to boost MSME capital base hailed
"The 500 Fish Farmer Producer Organisations is a small number but a good start will take time for them to mature as they first need to be nurtured to become creditworthy," said S Viswanatha Prasad, managing director, Caspian Advisors, an impact investor with investments of over Rs 1200 crore in MFIs (microfinance institutions) and SFBs (Small finance banks) and MSMEs. However, he said, if we look from the perspective of those who are financially excluded that the budget looked at, one measure which does stand out is about the MSME (Medium, Small and Micro Enterprises) sector. Here, he said, an important announcement was that under CGTMSE, the guarantee scheme of the government where they guarantee bank loans to MSME, banks that are giving unsecured loans or subordinated debt or tier II capital can also come under the CGTMSE guarantee.
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In her budget speech, the Finance Minister said that "working capital credit remains a major issue for the MSMEs. It is proposed to introduce a scheme to provide subordinate debt for entrepreneurs of MSMEs. This subordinate debt to be provided by banks would count as quasi-equity and would be fully guaranteed through the 27 Credit Guarantee Trust for Medium and Small Entrepreneurs (CGTMSE). The corpus of the CGTMSE would accordingly be augmented by the government." Those in the industry feel this will help "as this will boost the capital base of MSMEs because to borrow from banks and NBFCs, they need capital and this will count as tier II capital," says Prasad.