Local Community Participation In Eco Tourism

Local Community Participation In Eco Tourism Many factors play a big role in determining community participation in ecotourism planning initiatives. In addition community participation differ in their needs, 2.8.1 Social benefits The theoretical roots of social benefits of community participation in eco-tourism are date back to the social exchange theory. The social exchange theory assumes that social relations involve exchange of resources among groups seeking mutual benefits from exchange relationships. The central idea of social exchange theory is that the exchange of social and material resources is a fundamental determinant of human interaction. Research on residents reactions to tourism development based on the theoretical constructs of the Social Exchange Theory has examined the relationship between and among the perception of the benefits, costs, impacts, and support for tourism (Gursoy et. al.2002, Lindberg Johnson 1997, Jurowski et al. 1997). The present study is focusing on two social benefits of community participation named by awareness of changing way of life and satisfaction level of promoting local traditional and culture. As a study by Hunter and Green, (1995) defined Interaction between cultures and hosting visitors may lead to a decline in the local culture, therefore, it may lead to the neglect of the local population of their heritage and tradition of tourists, especially young people. This concept is recognized as a demonstration where the local population to modify their behavior and aspirations and by following the example of tourists. Therefore Shaw and Williams (1994), emphasized the social benefits that influence a positive impact on society, particularly those who seek to improve education and standard of living or to seek equality between the genders, demonstration effect and usually occurs among young people the host population. The consequence of this effect is the conflicts within the community among young people modern and the elder traditional. According to Ceballos-Lascurà ¡in (1996), tourism may offer employment to host residents, presenting women and youths the opportunity to earn a wage, which before was not possible, this may also cause conflict within homes, where the incomes of women or the youths may empower them, allowing them to challenge their traditional roles at home and in society. The challenging of traditional roles will also lead to changes in the culture. Concealed pre-existing divisions between communities members may be enhanced as certain individuals may benefit from tourism while others could be excluded from participating. As tourism develops there may be many economic potentials, where the first to capitalize may be quick to dominate the market. This may erupt in issues of fairness, jealousy and resentment within the community. However, in recent years social and cultural aspects have become increasingly important in the sustainable tourism debate, especially in the context of developing countries where poverty is a widespread problem (Strasdas, 2005). Garrod (2003) identified Social aspect to the ability of the local community to determ ine the social impacts of ecotourism development. Social empowerment will result in ecotourism making a contribution to the social cohesion and integrity of the local community, rather than detracting from it. it is most likely to be found in those communities where part of the net returns from ecotourism are recycled back into the local community in the form of investment in local infrastructure of the founding of social projects. According to Pongponrat Pongquan (2007) that social relations and interactions within the community became stronger among various stakeholders involved in this fair. In addition, visitors learned local traditions and culture which will help the community to solicit their support on local cultural promotion and preservation in future. Even though the idea of ecotourism already contains social and cultural compatibility as well as the generation of benefits to local people as important elements, the focus is more on nature conservation. Awareness of changing way of life Tanya , Piyaphan and Suwipa ( 2009) conducted a study to investigate the need and readiness of community in managing community-based ecotourism; and to gather and assemble local knowledge to develop guideline for community-based ecotourism management The Hmong and Karen stakeholders from 14 villages of Mae Wang and Mae Chaem district, Chiang Mai Province, within responsible area of the Mae Hae Royal Project Development Station, were involved in this study Northern Thailand, the authors investigate relationship between awareness of changing way of life level of community participation the authors fund the result of Attraction of culture and way of life satisfied, In addition, visitors learned local traditions and culture which will help the community to solicit their support on local cultural promotion and preservation in future. A study conducted by Assefa and Olav (2005) to examine the local peoples participation in the management and development of ecotourism projects in the Adwa district, Northern Ethiopia, the authors investigate the relationship between awareness of impacts of tourism on local life level of community participation, the authors found a negative relationship, arguing that people are more aware of the negative effects on their life and their culture of tourism more than what is on the natural environment. Ceballos-Lascurà ¡in (1996), believed that the challenging of traditional roles will also lead to changes in the culture. Therefore, Hunter and Green, (1995) refers Interaction between cultures and hosting visitors may lead to a decline in the local culture, therefore, it may lead to the neglect of the local population of their heritage and tradition of tourists, especially young people. Satisfaction level of promoting local traditional and culture Tanya Promburom, et.al 2009 conducted a study to investigate the need and readiness of community in managing community-based ecotourism; and to gather and assemble local knowledge to develop guideline for community-based ecotourism management The Hmong and Karen stakeholders from 14 villages of Mae Wang and Mae Chaem district, Chiang Mai Province, within responsible area of the Mae Hae Royal Project Development Station, were involved in this study Northern Thailand the authors investigate the relationship between promote their culture and level of community participation the authors fund the result high percentage of the village leaders and villagers had positive attitude toward tourism because it could promote their culture. (2009) recent study found that the level of participation is high, namely the relationship is significantly related between level of community participation and preservation of culture, and this study conducted by Hasnol, to interpret and develop the indicators for success of local community participation and ecotourism sites in Sabah, the author investigated the relationship between level of community participation and preservation of culture. Pongponrat and Pongquan, (2007), conducted a study to explores various aspects of community participation in local tourism development planning on Samui Island in the south of Thailand and identifies factors associated with intensity of participation of local people in the planning process organized by the Nathon community on Samui Island, the authors investigate the relationship between satisfaction level of promoting local traditional and culture among all factors- level of community participation in all phases, the authors found relationship between this factor implementation phase to be associates with the intensity of peoples participation in this stage. According to Piyaphan and Suwipa (2009), visitors learned local traditions and culture which will help the community to solicit their suppo rt on local cultural promotion and preservation in future. Economic benefits The social exchange theory is widely used for theorizing the economic benefits of community participation in eco-tourism. The social exchange theory argues that tourism development comes with economic benefits (Claiborne, 2010). The present study is focusing on three benefits of community participation on eco-tourism named by household income, creating employment opportunities, and creating investment input. Wang and Tong (2009) emphasizes that the economic Aspects of vulnerability in improving the standard of living of the local population, and income from eco-tourism should not be used only to protect the ecological environment but also benefit the local population. Aref and Maarof (2008) defined that the community participation in tourism development is necessary if they are to provide equitable distribution of benefits of local economic. Therefore the concept of community participation is regarded as a tool to assist in ecotourism and local economic development in rural communities (Sebola and Fourie, 2006). Brandon (1993) highlights the fact that many ecotourism projects have adopted the generation of economic benefits for the local community as one of their major aims. However, it is significant that only a handful of such projects have opened up the decision making process by which the scale and distribution of these economic benefits are determined to local people. According to Brandon (1993), ecotourism projects that generate a lot of economic benefits to the community, however, these projects have opened the process of decision-making and distribution of these economic benefits to the local population. Brandon (1993) refers the linkage between economic benefits and conservation can be made more direct. One way of doing this is to ensure that any access fees that are changed are channelled directly into efforts concerned with the management of ecotourism activity and the conservation of its resource base. A good example where this already takes place is in the management of whale shark tourism in the Ningaloo Marine Park in Western Australia (Davis and Tisedell, 1998). Whale shark tourism began in the 1980s and, while the initial volume of visits was relatively small, the industry grew so rapidly that by the mid-1990s deep concerns were being expressed about the adverse impacts of tourism on the whale shark population. In a study by Garrod (20 02) involving the use of the Delphi technique to gather expert opinion on how ecotourism might best be defined, the principle that locals should benefit in economic terms from ecotourism was included in over 81 per cent of the final selection of definitions. In contrast, the principle that local people should participate in the decision-making processes through which the scale and distribution of those economic benefits are determined was included in only 27 per cent of the final selection of definitions. Butler (1999) refers that, tourism is an industry generating rapid growth of capital flows to the destination location. Diversified economies are more vulnerable to the integration of tourism in their economy, compared to the least developed (single or double-export) economies, where the effects can be severe and unexpected. Key issues relevant to the local economy and employment, and the quantity of local goods and services used to run the tourism. Lea, (1988) emphasizes that the employment provided to local communities are less skilled and lower wage earning jobs, such as cleaners, bartenders, waiters, and transport operators, cooks and this impacts negatively on society and the local population feel they are not benefiting from tourism. Lockhart and Drakakis-Smith (1997) are often imported from outside the community, such as managers and workers in two languages. Tour operators usually import skilled labour because they do not have to invest in the training of the local population. Moreover, employment in the tourism industry, seasonal, and therefore may not be secure income. As a study by Fennell (1999) emphasized import that substitute labour and/or goods cause leakage in economic benefits to the host economy. Mowforth and Munt (1998) considered that the real estate market in the destination location is a driving force for the growth of the tourism industry and as a tool to enable investors to Earth has lifted the market value of land by purchase from the local population and development. The local population profit from the sale of land in the beginning, but in the long term, they recognize the sovereignty of the new owners of the land and therefore the new owners of the land access to energy in the development process. Archer and Cooper (1998) believe investment in tourism infrastructure that could benefit the community through improvements in telecommunications networks, roads and ports. This may allow for other economic opportunities for the local area. Household income Hoque and Itohara. (2008), conducted a study to know the present status of rural womens participation and decision making role in economic activities in Bangladesh, the author found relationship between household income among others- and level of participation in decision making phase, contribution of womens personal income on their role in family decision making they are being capable to contribute in household income which is improving their status in the family even some cases they are playing active role in taking decision regarding some family issues. Thus it is proved that due to participation in EAs women in the rural areas are contributing in household income that has also improved their role in family decision making than before. Ye Zhang (2010) conducted a study to investigate the preferences of residents in the Midwestern United States on how they would like to be involved in tourism planning and development, and the personal factors that influenced their preferences, the author fund people who preferred spontaneous participation had higher household income than those who preferred induced participation. Robert S. Pomeroya, Enrique G. Oracionb, Richard B. Pollnacc, Demberge A. Caballes 2005 conducted a study to examines factors influencing the sustainability of ICM projects in the Philippines, specifically, the study focused on two locations in the country, Bais Bay area of Negros Oriental Province and Mabini-Tingloy (known as Anilao), the author investigate relationship between household income and level of community participation this relationship positive relate. Tanya Promburom, Piyaphan Klunklin and Suwipa Champawalaya 2009 conducted a study to investigate the need and readiness of community in managing community-based ecotourism; and to gather and assemble local knowledge to develop guideline for community-based ecotourism management The Hmong and Karen stakeholders from 14 villages of Mae Wang and Mae Chaem district, Chiang Mai Province, with in responsible area of the Mae Hae Royal Project Development Station, were involved in this study Northern Thailand the authors investigate the relationship between promote their culture level of community participation the authors fund the result high percentage of the village leaders and villagers had positive attitude toward tourism because it could generate additional income, promote their culture, and improve infrastructure. Pongponrat. K. Pongquan.S, (2007), conducted a study to explores various aspects of community participation in local tourism development planning on Samui Island in the south of Thailand and identifies factors associated with intensity of participation of local people in the planning process organized by the Nathon community on Samui Island, the authors found relationship between household income among others- and level of local community participation in all phases and specifically in decision making and implementation phases, this mean that local people who had relatively better- off income tended to participant intensively, this implies that these people had more time to be involved in planning activities than those in the low income category, who are busy earning their living and contributed less time in planning and implementation activities. Brandon (1993) believed that the ecotourism projects have adopted the generation of economic benefits for the local community as one of their major aims. However, it is significant that only a handful of such projects have opened up the decision making process by which the scale and distribution of these economic benefits are determined to local people. Creating employment opportunities Robert S. Pomeroya, Enrique G. Oracionb, Richard B. Pollnacc, Demberge A. Caballes 2005 conducted a study to examine factors influencing the sustainability of ICM projects in the Philippines specifically, the study focused on two locations in the country, Bais Bay area of Negros Oriental Province and Mabini-Tingloy (known as Anilao), the authors investigate relationship between the employment opportunities and level of community participation the authors fund this relationship positive relate. Liu Tao, Xu Fuying, 2005 conducted a study to summarize the community participation model of rural tourism, and then analyzes the benefit appeals and the contradictories of main stakeholders of community participation in rural tourism from the following five aspects: government, community collective agency, community resident, rural tourism enterprises and rural tourists in China, the authors argued local government hopes creating more employment opportunities, driving the development of relate d industries, promoting the current new rural construction, and enhancing the popularity of the destination and so on through the development of rural tourism. Assefa T. Olav Oyhus A. 2005, conducted a study to examine the local peoples participation in the management and development of ecotourism projects in the Adwa district, Northern Ethiopia, the authors investigate the relationship between employment opportunities level of community participation the authors fund the relationship positive relate, argued that the majority of the population can be sober beneficiaries of job opportunities and get a direct benefit and that members of society must be sober-the direct beneficiaries. Denman, (2001) conducted a study to identify some general principles, and highlight some practical considerations for community-based ecotourism, the author investigated the relationship between creating employment opportunities and level of community participation, the author found that variable increas e from degree of community participation. Lea, (1988) emphasizes that the employment provided to local communities are less skilled and lower wage earning jobs, such as cleaners, bartenders, waiters, and transport operators, cooks and this impacts negatively on society and the local population feel they are not benefiting from tourism. Environment benefits Similarly to social and economic benefits, the social exchange theory can be used to theorize the environmental benefits of community participation in tourism such as increasing conservation of local environment and increasing management skills in resources utilization. The theory provides the basis for recognizing people`s need to engage in an interaction process where they seek something of value, be it material, social, or psychological. The present study is focusing on two benefits of community participation on eco-tourism named by increasing conservation of local environment and increasing management skills in resources utilization. The study by Hunter and Green, (1995) to determine the impacts of tourism on the environment, they reported that these impacts are negative and may not always be clear, since it takes a lot of time before it appears. However the consumption of resources, built environment, land use, behavior of tourists and amount of tourism will affect the host destinations environment (Swarbrooke, 1999). According to Hunter and Green (1996), environmental degradation may occur in the form of: Overexploitation of natural resources Biodiversity loss Disruption of species breeding habits Soil erosion land reclamation Soil contamination from waste disposal Coastal and ground water pollution from waste, sewage and oil disposal. Consumption of tourists will increase demand on local natural resources, which in many cases has led to environmental degradation. As the demand for wood for cooking, heating increased in parallel with the increasing number of hikers in mountainous areas. Thus, this demand has led to further deforestation and soil erosion to be so negative impact on the environment and society (Ceballos-Lascurà ¡in, 1996). Miller (1999) noted that land reclamation is often a result of the pressures on coastal areas affects the local environment and population, leading to negatively impact the environment and local residents, particularly mangrove forests are typical targets due to their shallow waters. In addition to they are also the nursery ground for a wide range of marine life and prevent coastal erosion. In addition to local people reported a very high degree of benefit regarding increased management skill in resource utilisation relating to environmental aspects; all other aspects relating to social, and economic benefits were rated at a high level. Likewise, local people were satisfied with the community participation in local tourism development in various social, economic, and environmental aspects (Pongponrat Pongquan, 2007). People reported a very high degree of benefit regarding increased management skill in resource utilisation relating to environmental aspects; all other aspects relating to social, economic and environment benefits were rated at a high level. Knowledge and understanding of the principles and objectives of a participation approach are key factors associated with the intensity of peoples participation leading local people to participate in group meetings, identifying problems and needs and plan for their groups activities (Pantong 1996). In other studies, age, length of membership, favourable attitude towards the group, income, and perceived benefits obtained from the group were found substantially associated with the intensity of their participation (Sirisongkram et al. 1999 and Pattarnarakha 2003). In addition, the willingness to participate in a development activity is another factor to be considered as this will be greater when the people could see immediate benefits to be obtained from a project in which they are going to participate (Gurung 1981:34). Likewise, local people were satisfied with the community participation in local tourism development in various social, economic, and environmental aspects. Setty (1994) and Garrod (2003) identified certain factors inhibiting peoples participation. Those factors comprise self-interest, encouragement provided by local leaders, knowledge and skills, availability of time, resource and materials, interest in welfare of community, costs-benefits of participation, quick results, gender, age, pattern of local internal communication and influence of culture and religion. Garrod (2003) found Social aspect refers to the ability of the local community to determine the social impacts of ecotourism development. Social empowerment will result in ecotourism making a contribution to the social cohesion and integrity of the local community, rather than detracting from it. it is most likely to be found in those communities where part of the net returns from ecotourism are recycled back into the local community in the form of investment in local infrastructure of the founding of social projects. Garrod (2003) Economic aspect refers to the local communitys ability to make and take opportunities for economic development through the development of ecotourism. It may also refer to the local communitys access to the productive resources that are being targeted by ecotourism. A community that is economically empowered is one where incomes are being enhanced and lasting employment is generated, where the economic benefits of ecotourism development are shared equitably among the community as a whole, and where the local community retains access rights to communitys resources base. Conservation of the environment Hassnol (2009) conducted a study to interpret and develop the indicators for success of local community participation and ecotourism sites in Sabah, the author investigated the relationship between level of community participation conservation of the environment the author found that the level of participation is high, namely the relationship is significantly related. Denman (2001) conducted a study to identify some general principles, and highlight some practical considerations for community-based ecotourism the author investigate the relationship between level of community participation and conservation , the author found that conservation enabling the community to influence activity and earn income from tourism namely that relationship significantly relate. Himoonde (2007) conducted a study to examine what local benefits accrue to the community and the level at which they participate in ecotourism, the author investigate the relationship between conservation of environment and le vel of community participation, and found the relationship high and significant. Degree of benefits gained in the increase of management skills in resources utilization Pongponrat. K. Pongquan.S, (2007), conducted a study to explores various aspects of community participation in local tourism development planning on Samui Island in the south of Thailand and identifies factors associated with intensity of participation of local people in the planning process organized by the Nathon community on Samui Island, the authors investigate the relationship between degree of benefits gained in the increase of management skills in resources utilization among all factors- and level of community participation in all phases the authors found relationship between this factor decision making and implementation to be associates with intensity of community participation in this phases and decision making phase in particular Researcher in this factor need to know the response of society to participate in the planning of eco-tourism in a country such as Yemen is one of the third world countries. Abdullah (2008) conducted a study to investigates the problems that affe cted natural resources and local community involvement in management to mitigate such problem in Bangladesh, the author investigate the relationship between management skills resources utilization and level of community participation the findings show relationship significant relate. Sebola (2005) conducted a study to investigate the ecotourism potential of the Maleboho Nature Reserve, and the manner in which such potential may be utilised to benefit the local communities around the nature reserve, the author investigate relationship between management skills and level of community participation, the findings show that relationship significant relate. 2.9 Hypotheses development 2.9.1 Social benefits There are several studies provide empirical evidence of the positive relationship between social benefits and level of community participation in ecotourism (see for example, Shaw and Williams (1994), Strasdas (2005) and Pongponrat Pongquan, (2007) In recent years social and cultural aspects have become increasingly important in the sustainable tourism debate, especially in the context of developing countries where poverty is a widespread problem. Hence, that social relations and interactions within the community became stronger among various stakeholders involved in this fair. In addition, visitors learned local traditions and culture which will help the community to solicit their support on local cultural promotion and preservation in future. 2.9.1.1 Awareness of changing way of life Theoretically, Michael (2009) argued that tourism development contributes positively towards poverty alleviation and improvement of services, employment and training projects and increase awareness of the changing way of life, which increases in participation by the community. Piyaphan and Suwipa (2009) Believed to change the way of life to attract culture in addition to teaching visitors local traditions and culture which helps the community to get support for the promotion of local culture and maintain in the future and that encourages community participation in tourism. Schulenkorf (2008) argued that there are positive effects of change the way of life and this leads to improvement of general living conditions in communities and increase the quality of life of the people. However, the way of life, are ideally suited to become tourism products because they encompass the features that make a community unique and are experiential in nature (McKercher and Ho 2006). Piyaphan and Suwipa (2009), McKercher and Ho (2006), Schulenkorf (2008). all provide empirical support of the positive relationship between employment opportunities and level of community participation in ecotourism. Thus, it is interesting to reexamine the relationship between Awareness of changing way of life and level of community participation in ecotourism in Yemen context that differ significantly in its economic, social, and environmental conditions from the countries in which this relationship was tested. This may help improve our understanding of the impact of this factor on level of community participation in ecotourism. Therefore, based on the above argument, the following hypothesis is proposed: H1: there is a positive relationship between Awareness of changing way of life and level of community participation in ecotourism in Yemen. 2.9.1.2 Promoting local traditional and culture Theoretically, Promburom, et.al 2009 argued that promote culture and traditional the village leaders and villagers had positive attitude toward tourism because it could promote their culture. Piyaphan and Suwipa ( 2009), believed visitors learned local traditions and culture which will help the community to solicit their support on local cultural promotion and preservation in future. Promburom, et al, (2009), Hassnol (2009), Pongponrat. K. Pongquan.S, (2007), all provide empirical support of the positive relationship between promoting local traditional and culture and level of community participation in ecotourism. Thus, it is interesting to reexamine the relationship between Promoting local traditional and culture and level of community participation in ecotourism in Yemen context that differ significantly in its economic, social, and environmental conditions from the countries in which this relationship was tested. This may help improve our understanding of the impact of this factor on level of community participation in ecotourism. Therefore, based on the above argument, the following hypothesis is proposed: H2: there is a positive relationship between Promoting local traditional and culture and level of community participation in ecotourism in Yemen. 2.9.2 Economic benefits Brandon (1993), Butler (1999), Sebola and Fourie, (2006), Wang and Tong (2009), all provide empirical support of the positive relationship between economic benefits and level of community participation in ecotourism. It is argued that economic benefits; To get different benefits to improving the standard of living of the local population. Moreover, that many ecotourism projects have adopted the generation of economic benefits for the local community as one of their major aims. In addition ecotourism projects that generate a lot of economic benefits to the community, however, these projects have opened the process of decision-making and distribution of these economic benefits to the local population. As well as tou

Stigma: Notes on the Management of Spoiled Identity, by Erving Goffman

The book I chose to do my paper on is â€Å"Stigma Notes on the Management of Spoiled Identity† by Erving Goffman. Goffman was stood out from other sociologists because he did not follow the normal rules that the others lived by. This rebellion often was thought to be caused by his lack of professional manners, and made it difficult for some to be in his company. However, Goffman was not like other sociologists due to his love was data not simply sociology. He primarily exhibited his work via essays and believed in not expecting too much because he realized that only so much could be achieved with the current level of knowledge in micro social science. The idea of not expecting too much led to Goffman adopting a naturalistic view of social science in an attempt to understand the micro social world. His first naturalism belief was that you must go out and observe. Secondly, he believed that we are each a natural control group, and that we can get gauge theories based on the compatibility that they have with our own lives. Thirdly, Goffman felt that it was necessary to â€Å"get a good initial database†, and that it was ok to look beyond the typical sources. His sources consisted of whatever he deemed worthy, which goes in hand with his fourth belief of being open to various data sources. Goffman’s fifth and final naturalism belief was that multiple data sources should be used. Naturalism made Goffman stick out from other theorists, but that was just one of many things that made him unusual. His preference of neither process nor structure made him even more unusual when compared with other social scientists. His unwillingness to prefer one over the other was born from doing so would be denying human beings and human social organizations ... ...dling us â€Å"normal† people and looking beyond our unkindness or rudeness (Goffman, 1963, p. 116). Contrary to what most probably think there is not always much difference between normal and stigmatized people. After all we are all susceptible to a sudden physical stigma or the removal of a physical stigma (Goffman, 1963, p. 132). Some people are also able to deviate from the social norms without being classified as stigmatized (Marley, 2008). Works Cited Goffman, E. (1963). Stigma Notes on the Management of Spoiled Identity. New York: Simon & Schuster Inc. Marley, J. (2008, November 6). Book Review: Stigma: Notes on the Management of Spoiled Identity. Retrieved March 9, 2011, from The Amazing World of Psychiatry: A Psychiatry Blog: http://theamazingworldofpsychiatry.wordpress.com/2008/11/06/book-review-stigma-notes-on-the-management-of-spoiled-identity/ Stigma: Notes on the Management of Spoiled Identity, by Erving Goffman The book I chose to do my paper on is â€Å"Stigma Notes on the Management of Spoiled Identity† by Erving Goffman. Goffman was stood out from other sociologists because he did not follow the normal rules that the others lived by. This rebellion often was thought to be caused by his lack of professional manners, and made it difficult for some to be in his company. However, Goffman was not like other sociologists due to his love was data not simply sociology. He primarily exhibited his work via essays and believed in not expecting too much because he realized that only so much could be achieved with the current level of knowledge in micro social science. The idea of not expecting too much led to Goffman adopting a naturalistic view of social science in an attempt to understand the micro social world. His first naturalism belief was that you must go out and observe. Secondly, he believed that we are each a natural control group, and that we can get gauge theories based on the compatibility that they have with our own lives. Thirdly, Goffman felt that it was necessary to â€Å"get a good initial database†, and that it was ok to look beyond the typical sources. His sources consisted of whatever he deemed worthy, which goes in hand with his fourth belief of being open to various data sources. Goffman’s fifth and final naturalism belief was that multiple data sources should be used. Naturalism made Goffman stick out from other theorists, but that was just one of many things that made him unusual. His preference of neither process nor structure made him even more unusual when compared with other social scientists. His unwillingness to prefer one over the other was born from doing so would be denying human beings and human social organizations ... ...dling us â€Å"normal† people and looking beyond our unkindness or rudeness (Goffman, 1963, p. 116). Contrary to what most probably think there is not always much difference between normal and stigmatized people. After all we are all susceptible to a sudden physical stigma or the removal of a physical stigma (Goffman, 1963, p. 132). Some people are also able to deviate from the social norms without being classified as stigmatized (Marley, 2008). Works Cited Goffman, E. (1963). Stigma Notes on the Management of Spoiled Identity. New York: Simon & Schuster Inc. Marley, J. (2008, November 6). Book Review: Stigma: Notes on the Management of Spoiled Identity. Retrieved March 9, 2011, from The Amazing World of Psychiatry: A Psychiatry Blog: http://theamazingworldofpsychiatry.wordpress.com/2008/11/06/book-review-stigma-notes-on-the-management-of-spoiled-identity/

Importance of Agriculture in Economy Essay

The direct contribution of the agriculture sector to national economy is reflected by its share in total GDP, its foreign exchange earnings, and its role in supplying savings and labor to other sectors. Agriculture and allied sectors like forestry and fishing accounted for 18.5 percent of total Indian Gross Domestic Product (GDP) in 2005-06 (at 1999-2000 constant prices) and employed about 58 percent of the country’s workforce (CSO, 2007). It accounted for 10.95 percent of India’s exports in 2005-06 (GoI, 2007) and about 46 percent of India’s geographical area is used for agricultural activity. There has been a structural transformation in the Indian economy during the past few decades. The composition of Gross Domestic Product at 1993-94 constant prices reveals that the share of agriculture including forestry and fishing has declined as growth in industrial and services sectors far outpaced agricultural sector (Figure 1). The share of mining, manufacturing, electricity and construction sector has increased from 21.6 percent in 1970-71 to 27 percent in 2004-05 and services sector has increased significantly from 32 percent to 52.4 percent during the same period. Despite a steady decline of its share in the GDP, agriculture is still an important sector and plays a significant role in the overall socio-economic development of the country. Therefore, fostering rapid, sustained and broad-based growth in agriculture remains key priority for the government. Consistent with the trends of economic development at national level, role of agricultural sector in the state economies is also changing rapidly. The share of agriculture in Gross State Domestic Product (GSDP) has declined significantly during the last two decades. In some States, such as Bihar, Punjab, Uttar Pradesh, Haryana, Rajasthan, and Orissa, the sector today contributes more than one-quarter of GSDP, while in some states, such as Gujarat, Kerala, Karnataka, Tamil Nadu and Maharashtra, the sector contributes less than 20 percent to GSDP (Figure 2). However, contribution of agriculture to GSDP has declined in almost all States between 1993-94 and 2004-05. The decline was the highest in Karnataka (16%), followed by Haryana (14.2%), and Kerala (13.7%). In Karnataka, decline was mainly due to significant increase in the share of service sector (from 37.9% in 1993-94 to 54.7% in 2004-05) mainly driven by informational technology (IT) industry. Similar is the case with Haryana the decline is due to faster development of services sector in cities around the national capital, Delhi. Despite declining share of agriculture in the economy, majority of workforce continue to depend on agricultural sector for employment and in rural areas dependence on agriculture is more as nearly 75 percent of rural population is employed in agricultural sector. However, there is disguised employment in the sector due to limited opportunities for rural non-farm employment. This disguised employment leads to lower labor and resources productivity in the sector relative to other sectors of the economy. The low labor productivity leads to higher rates of poverty in rural areas (Figure 3). Agriculture in India is constitutionally the responsibility of the states rather than the central government. The central government’s role is in formulating policy and providing financial resources for agriculture to the states. Agriculture finance Meaning: Agricultural finance generally means studying, examining and analyzing the financial aspects pertaining to farm business, which is the core sector of India. The financial aspects include money matters relating to production of agricultural products and their disposal. Definition of Agricultural finance: Murray (1953) defined agricultural. finance as â€Å"an economic study of borrowing funds by farmers, the organization and operation of farm lending agencies and of society’s interest in credit for agriculture .† Tandon and Dhondyal (1962) defined agricultural. finance â€Å"as a branch of agricultural economics, which deals with and financial resources related to individual farm units.† What is Agriculture Finance â€Å"Agricultural finance is the study of financing and liquidity services credit provides to farm borrowers. It is also considered as the study of those financial intermediaries who provide loan funds to agriculture and the financial markets in which these intermediaries obtain their loanable funds.† John B. Penson, Jr. and David A. Lins (1980) Why Agriculture Finance India is mainly an agricultural country. Agriculture accounts for approximately 33 percent of India’s GDP and employs nearly 62 percent of the population. It accounts for 8.56 % of India’s exports. About 43 % of India’s geographical area is used for agricultural activity. Agricultural production in this country depends upon millions of small farmers. It is intensity of their effort and the efficiency of their technique that will help in raising yields per acre. Finance in agriculture is as important as development of technologies. Technical inputs can be purchased and used by farmer only if he has money (funds). But his own money is always inadequate and he needs outside finance or credit. Because of inadequate financial resources and absence of timely credit facilities at reasonable rates, many of the farmers, even though otherwise willing, are unable to go in for improved seeds and manures or to introduce better methods or techniques. The farming community must be kept informed about the various sources of agriculture finance. Agricultural finance possesses its usefulness to the farmers, lenders and extension workers. The knowledge of lending institutions, their legal and regulatory environment helps in selecting the appropriate lender who can adequately provide the credit with terms and related services needed to finance the farm business. Nature and Scope: Agricultural finance can be dealt at both micro level and macro level. Macrofinance deals with different sources of raising funds for agriculture as a whole in the economy. It is also concerned with the lending procedure, rules, regulations, monitoring and controlling of different agricultural credit institutions. Hence macro-finance is related to financing of agriculture at aggregate level. Micro-finance refers to financial management of the individual farm business units. And it is concerned with the study as to how the individual farmer considers various sources of credit, quantum of credit to be borrowed from each source and how he allocates the same among the alternative uses with in the farm. It is also concerned with the future use of funds. Therefore, macro-finance deals with the aspects relating to total credit needs of the agricultural sector, the terms and conditions under which the credit is available and the method of use of total credit for the development of agriculture, while micro-finance refers to the financial management of individual farm business. Significance of Agricultural Finance: 1) Agril finance assumes vital and significant importance in the agro – socio – economic development of the country both at macro and micro level. 2) It is playing a catalytic role in strengthening the farm business and augmenting the productivity of scarce resources. When newly developed potential seeds are combined with purchased inputs like fertilizers & plant protection chemicals in appropriate / requisite proportions will result in higher productivity. 3) Use of new technological inputs purchased through farm finance helps to increase the agricultural productivity. 4) Accretion to in farm assets and farm supporting infrastructure provided by large scale financial investment activities results in increased farm income levels leading to increased standard of living of rural masses. 5) Farm finance can also reduce the regional economic imbalances and is equally good at reducing the inter–farm asset and wealth variations. 6) Farm finance is like a lever with both forward and backward linkages to the economic development at micro and macro level. 7) As Indian agriculture is still traditional and subsistence in nature, agricultural finance is needed to create the supporting infrastructure for adoption of new technology.   8) Massive investment is needed to carry out major and minor irrigation projects, rural electrification, installation of fertilizer and pesticide plants, execution of agricultural promotional programmes and poverty alleviation programmes in the country .LECTURE -2 Credit needs in A Credit needs in Agriculture – meaning and definition of credit-classification of credit based on time, purpose, security, lender and borrower. _____________________________________________________________________ The word â€Å"credit† comes from the Latin word â€Å"Credo† which means â€Å"I believe†. Hence credit is based up on belief, confidence, trust and faith. Credit is other wise called as loan. Definition: Credit / loan is certain amount of money provided for certain purpose on certain conditions with some interest, which can be repaid sooner (or) later. According to Professor Galbraith credit is the â€Å"temporary transfer of asset from one who has to other who has not† Credit needs in Agriculture: Agricultural credit is one of the most crucial inputs in all agricultural development programmes. For a long time, the major source of agricultural credit was private moneylenders. But this source of credit was inadequate, highly expensive and exploitative. To curtail this, a multi-agency approach consisting of cooperatives, commercial banks ands regional rural banks credit has been adopted to provide cheaper, timely and adequate credit to farmers. The financial requirements of the Indian farmers are for, 1. Buying agricultural inputs like seeds, fertilizers, plant protection chemicals, feed and fodder for cattle etc. 2. Supporting their families in those years when the crops have not been good. 3. Buying additional land, to make improvements on the existing land, to clear old debt and purchase costly agricultural machinery. 4. Increasing the farm efficiency as against limiting resources i.e. hiring of irrigation water lifting devices, labor and machinery Credit can be classified on the basis of time, purpose, security, lender and borrower. (i)Time classification:- It classifies credit into three groups, i.e. short, medium and long term. (a) Short-Term (for periods up to 15 months): The â€Å"short-term loans† are generally advanced for meeting annual recurring purchases such as, seed, feed, fertilizers, hired labour expenses, pesticides, weedicides, hired machinery charges, etc., and termed as seasonal loans/crop loans/production loans. These are expected to be repaid after the harvest. It is expected that the loan plus interest would be repaid from the income received through the enterprise in which it was invested. The time limit to repay such loans is a year or at the most 18 months. (b) Medium-Term (from 15 months up to 5 years): â€Å"Medium-term loans† are advanced for comparatively longer lived assets such as machinery, diesel engine, wells, irrigation structure, threshers, shelters, crushers, draught and milch animals, dairy/poultry sheds, etc., where the returns accruing from increase in farm assets in spread over more than one production period. The usual repayment period for such type of loan is from fifteen months to five years. (c) Long-Term (above 5 Years): Loans repayable over a longer period (i.e. above 5 years) are classified as long-term loans. â€Å"Long-term loans† are related to the long lifed assets such as heavy machinery, land and its reclamation, errection of farm buildings, construction of permanent-drainage or irrigation system, etc. which require large sums of money for initial investment. The benefits generated through such assets are spread over the entire life of the asset. The normal repayment period for such loans range s from five to fifteen or even upto 20 years. (ii) Purpose classification:- Credit is also classified based on purpose of loans e.g. crop loan, poultry/dairy/piggery loan, irrigation loan, machinery and equipment loan, forestry loan, fishery loan etc. These loans signify the close relationship between time and use as well as rate of return (or profitability). Some times loans are also classified as production and consumption loans due to the fact that production loans are diverted for consumption purposes by the weaker sections. So, the banks have also started financing for consumption purposes (exclusively for home consumption expenditures) besides financing for the production purposes. The consumption loans are also to be repaid from the sale proceeds of the crop. (iii) Security classification:- Security offered/obtained provides another basis for classifying the loans. The secured loans are advanced as against the security of some tangible personal property such as land, livestock and other capital assets, i.e., medium and long term loans. The borrower’s credit worthiness may act much more than the security offered, which if doubtful may result willful default. Moreover, the secured loans are further classified on the basis of type of security e.g. mortgage loans, where legal mortgage of some property such as land is offered to the lender, i.e., loans for intangible property such as land improvement, irrigation infrastructures, etc. and hypothecated loans, where legal ownership of the asset financed remains with the lender though physical possession with the borrowers i.e. loans for tangible property such as tractor, machinery and equipments. The private money lenders, usually possess items such as gold ornaments / jewellery or land as security, which reminds the borrower about his obligations of loan repayments. On the contrary, unsecured loans are generally advanced without offering any security e.g. short-term crop loans. (iv) Lender classification:- Credit is also classified on the basis of lender such as (a) Institutional Credit e.g. co-operative loans, commercial bank loans and government loans; (b) Non-Institutional Credit e.g. professional and agricultural money lenders, traders and commission agents, relatives and friends etc. (v) Borrower classification:- The credit is also classified on the basis of type of borrowers (i.e., production or business activity as well as size of business) such as crop farmers, dairy farmers, poultry farmers, fisherman, rural artisans etc. or agricultural labourers, marginal/small/medium/large farmers, hill farmers or tribal farmers etc. Such classification has equity considerations. credit is broadly classified based on various criteria: 1. Based on time: This classification is based on the repayment period of the loan. It is sub-divided in to 3 types Short–term loans: These loans are to be repaid within a period of 6 to 18 months. All crop loans are said to be short–term loans, but the length of the repayment period varies according to the duration of crop. The farmers require this type of credit to meet the expenses of the ongoing agricultural operations on the farm like sowing, fertilizer application, plant protection measures, payment of wages to casual labourers etc. The borrower is supposed to repay the loan from the sale proceeds of the crops raised. Medium – term loans: Here the repayment period varies from 18 months to 5 years. These loans are required by the farmers for bringing about some improvements on his farm by way of purchasing implements, electric motors, milch cattle, sheep and goat, etc. The relatively longer period of repayment of these loans is due to their partially-liquidating nature. Long – term loans: These loans fall due for repayment over a long time ranging from 5 years to more than 20 years or even more. These loans together with medium terms loans are called investment loans or term loans. These loans are meant for permanent improvements like levelling and reclamation of land, construction of farm buildings, purchase of tractors, raising of orchards ,etc. Since these activities require large capital, a longer period is required to repay these loans due to their non – liquidating nature. 2. Based on Purpose: Based on purpose, credit is sub-divided in to 4 types.   Production loans: These loans refer to the credit given to the farmers for crop production and are intended to increase the production of crops. They are also called as seasonal agricultural operations (SAO) loans or short – term loans or crop loans. These loans are repayable with in a period ranging from 6 to 18 months in lumpsum .Investment loans: These are loans given for purchase of equipment the productivity of which is distributed over more than one year. Loans given for tractors, pumpsets, tube wells, etc. Marketing loans: These loans are meant to help the farmers in overcoming the distress sales and to market the produce in a better way. Regulated markets and commercial banks, based on the warehouse receipt are lending in the form of marketing loans by advancing 75 per cent of the value of the produce. These loans help the farmers to clear off their debts and dispose the produce at remunerative prices. Consumption loans: Any loan advanced for some purpose other than production is broadly categorized as consumption loan. These loans seem to be unproductive but indirectly assist in more productive use of the crop loans i.e. with out diverting then to other purposes. Consumption loans are not very widely advanced and restricted to the areas which are hit by natural calamities. These loams are extended based on group guarantee basis with a maximum of three members. The loan is to be repaid with in 5 crop seasons or 2.5 years whichever is less. The branch manager is vested with the discretionary power of sanctioning these loans up to Rs. 5000 in each individual case. The rate of interest is around 11 per cent. The scheme may be extended to 1) IRDP beneficiaries 2) Small and marginal farmers 3) Landless Agril. Laborers 4) Rural artisans 5) Other people with very small means of livelihood hood such as carpenters, barbers, washermen, etc. 3. Based on security: The loan transactions between lender and borrower are governed by confidence and this assumption is confined to private lending to some extent, but the institutional financial agencies do have their own procedural formalities on credit transactions. Therefore it is essential to classify the loans under this category into two sub-categories viz., secured and unsecured loans. Secured loans: Loans advanced against some security by the borrower are termed as secured loans. Various forms of securities are offered in obtaining the loans and they are of following types. I. Personal security: Under this, borrower himself stands as the guarantor. Loan is advanced on the farmer’s promissory note. Third party guarantee may or may not be insisted upon (i.e. based on the understanding between the lender and the borrower) II. Collateral Security: Here the property is pledged to secure a loan. The movable properties of the individuals like LIC bonds, fixed deposit bonds, warehouse receipts, machinery, livestock etc, are offered as security. III. Chattel loans: Here credit is obtained from pawn-brokers by pledging movable properties such as jewellery, utensils made of various metals, etc. IV. Mortgage: As against to collateral security, immovable properties are presented for security purpose For example, land, farm buildings, etc. The person who is creating the charge of mortgage is called mortgagor (borrower) and the person in whose favour it is created is known as the mortgagee (banker). Mortgages are of two types a) Simple mortgage: When the mortgaged property is ancestrally inherited property of borrower then simple mortgage holds good. Here, the farmer borrower has to register his property in the name of the banking institution as a security for the loan he obtains. The registration charges are to be borne by the borrower. b) Equitable mortgage: When the mortgaged property is self-acquired property of the borrower, then equitable mortgage is applicable. In this no such registration is required, because the ownership rights are clearly specified in the title deeds in the name of farmer-borrower. V. Hypothecated loans: Borrower has ownership right on his movable and the banker has legal right to take a possession of property to sale on default (or) a right to sue the owner to bring the property to sale and for realization of the amount due. The person who creates the charge of hypothecation is called as hypothecator (borrower) and the person in whose favor it is created is known as hypothecate (bank) and the property, which is denoted as hypothecated property. This happens in the case of tractor loans, machinery loans etc. Under such loans the borrower will not have any right to sell the equipment until the loan is cleared off. The borrower is allowed to use the purchased machinery or equipment so as to enable him pay the loan installment regularly. Hypothecated loans again are of two types viz., key loans and open loans. a) Key loans : The agricultural produce of the farmer – borrower will be kept under the control of lending institutions and the loan is advanced to the farmer . This helps the farmer from not resorting to distress sales. b) Open loans: Here only the physical possession of the purchased machinery rests with the borrower, but the legal ownership remains with the lending institution till the loan is repaid. Unsecured loans: Just based on the confidence between the borrower and lender, the loan transactions take place. No security is kept against the loan amount 4. Lender’s classification: Credit is also classified on the basis of lender such as Institutional credit: Here are loans are advanced by the institutional agencies like co-operatives, commercial banks. Ex: Co-operative loans and commercial bank loans. Non-institutional credit : Here the individual persons will lend the loans Ex: Loans given by professional and agricultural money lenders, traders, commission agents, relatives, friends, etc. 5. Borrower’s classification: The credit is also classified on the basis of type of borrower. This classification has equity considerations. Based on the business activity like farmers, dairy farmers, poultry farmers, pisiculture farmers, rural artisans etc. Based on size of the farm: agricultural labourers, marginal farmers, small farmers , medium farmers , large farmers , Based on location hill farmers (or) tribal farmers. 6. Based on liquidity: The credit can be classified into two types based on liquidity and they are Self-liquidating loans: They generate income immediately and are to be paid with in one year or after the completion of one crop season. Ex: crop loans. ï‚ · Partially -liquidating: They will take some time to generate income and can be repaid in 2-5 years or more, based on the economic activity for which the loan was taken. Ex: Dairy loans, tractor loans, orchard loans etc., 7. Based on approach: Individual approach: Loans advanced to individuals for different purposes will fall under this category Area based approach: Loans given to the persons falling under given area for specific purpose will be categorized under this. Ex: Drought Prone Area Programme (DPAP) loans, etc Differential Interest Rate (DIR) approach: Under this approach loans will be given to the weaker sections @ 4 per cent per annum. 8. Based on contact: Direct Loans: Loans extended to the farmers directly are called direct loans. Ex: Crop loans. Indirect loans: Loans given to the agro-based firms like fertilizer and pesticide industries, which are indirectly beneficial to the farmers aSource of Agricultural Credit are called iidirct loans. The sources of agricultural finance are broadly classified into two categories: (A) Noninstitutional Credit Agencies or informal sources, and (B) Institutional Credit Agencies or Formal Sources. A. Non-institutional Credit Agencies i) Traders and Commission Agents: Traders and commission agents advance loans to agriculturists for productive purposes against their crop without completing legal formalities. It often becomes obligatory for farmers to buy inputs and sell output through them. They charge a very heavy rate of interest on the loan and a commission on all the sales and purchases, making it exploitative in nature. ii) Landlords: Mostly small farmers and tenants depend on landlords for meeting their production and day to day financial requirements. iii) Money lenders: Despite rapid development in rural branches of different institutional credit agencies, village money lenders still dominate the scene. Money lenders are of two types- agriculturist money lenders who combine their money lending job with farming and professional money lenders whose sole job is money lending. A number of reasons have been attributed for the popularity of moneylenders such as: (a) they meet demand for productive as well as unproductive requirement; (b) they are easily approachable at odd hours; and (c) they require very low paper work and advances are given against promissory notes or land. Money lenders charge a very high rate of interest as they take advantage of the urgency of the situation. Over the years a need for regulation of money lending has been felt. But lack of institutional credit access to certain sections and areas had facilitated unhindered operation of money lending. B. Institutional Credit Agencies The evolution of institutional credit to agriculture could be broadly classified into four distinct phases – 1904-1969 (predominance of co-operatives and setting up of RBI), 1969-1975 [nationalisation of commercial banks and setting up of Regional Rural Banks (RRBs)], 1975-1990 (setting up of NABARD) and from 1991 onwards (financial sector reforms). Institutional funding of the farm sector is mainly by commercial banks, regional rural banks and co-operative banks. Share of commercial banks in total institutional credit to agriculture is almost 48 percent followed by cooperative banks with a share of 46 per cent. Regional Rural Banks account for just about 6 per cent of total credit disbursement. i) Government: These are both short term as well as long-term loans. These loans are popularly known as â€Å"Taccavi loans† which are generally advanced in times of natural calamities. The rate of interest is low. But it is not a major source of agricultural finance. ii) Cooperative Credit Societies: The history of cooperative movement in India dates back to 1904 when first Cooperative Credit Societies Act was passed by the Government. The scope of the Act was restricted to establishment of primary credit societies and non-credit societies were left out of its purview. The shortcomings of the Act were rectified through passing another Act called Cooperative Societies Act 1912. The Act gave provision for registration of all types of Cooperative Societies. This made the emergence of rural cooperatives both in the credit and noncredit areas, though with uneven spatial growth. In subsequent years a number of Committees were appointed and recommendations implemented to improve the functioning of the cooperatives. Soon after the independence, the Government of India following the recommendations of All India Rural Credit Survey Committee (1951) felt that cooperatives were the only alternative to promote agricultural credit and development of rural areas. Accordingly, cooperatives received substantial help in the provision of credit from Reserve Bank of India as a part of loan policy and large scale assistance from Central and State Governments for their development and strengthening. Many schemes involving subsidies and concessions for the weaker sections were routed through cooperatives. As a result cooperative institutions registered a remarkable growth in the post-independence India. iii) Commercial Banks: Previously commercial banks (CBs) were confined only to urban areas serving mainly to trade, commerce and industry. Their role in rural credit was meagre i.e., 0.9 per cent in 1951- 52 and 0.7 per cent in 1961-61. The insignificant participation of CBs in rural lending was explained by the risky nature of agriculture due to its heavy dependence on monsoon, unorganized nature and subsistence approach. A major change took place in the form of nationalisation of CBs in 1969 and CBs were made to play an active role in agricultural credit. At present, they are the largest source of institutional credit to agriculture. iv) Regional Rural Banks (RRBs): RRBs were set up in those regions where availability of institutional credit was found to be inadequate but potential for agricultural development was very high. However, the main thrust of the RRBs is to provide loans to small and marginal farmers, landless labourers and village artisans. These loans are advanced for productive purposes. At present 196 RRBs are functioning in the country lending around Rs 9,000 crore to rural people, particularly to weaker sections. v) Microfinancing: Microfinancing through Self Help Groups (SHG) has assumed prominence in recent years. SHG is group of rural poor who volunteer to organise themselves into a group for eradication of poverty of the members. They agree to save regularly and convert their savings into a common fund known as the Group corpus. The members of the group agree to use this common fund and such other funds that they may receive as a group through a common management. Generally, a self-help group consists of 10 to 20 persons. However, in difficult areas like deserts, hills and areas with scattered and sparse population and in case of minor irrigation and disabled persons, this number may range from 5-20. As soon as the SHG is formed and a couple of group meetings are held, an SHG can open a Savings Bank account with the nearest Commercial or Regional Rural Bank or a Cooperative Bank. This is essential to keep the thrift and other earnings of the SHG safely and also to improve the transparency levels of SHG’s transactions. Opening of SB account, in fact, is the beginning of a relationship between the bank and the SHG. The Reserve Bank of India has issued instructions to all banks permitting them to open SB accounts in the name of registered or unregistered SHGs. Genesis and Historical Background The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD) set up by the RBI under the Chairmanship of Shri B Sivaraman in its report submitted to Governor, Reserve Bank of India on November 28, 1979 recommended the establishment of NABARD. The Parliament through the Act 61 of 81, approved its setting up. The Committee after reviewing the arrangements came to the conclusion that a new arrangement would be necessary at the national level for achieving the desired focus and thrust towards integration of credit activities in the context of the strategy for Integrated Rural Development. Against the backdrop of the massive credit needs of rural development and the need to uplift the weaker sections in the rural areas within a given time horizon the arrangement called for a separate institutional set-up. Similarly. The Reserve Bank had onerous responsibilities to discharge in respect of its many basic functions of central banking in monetary and credit regulations and was not therefore in a position to devote undivided attention to the operational details of the emerging complex credit problems. Thispaved the way for the establishment of NABARD. CRAFICARD also found it prudent to integrate short term, medium term and long-term credit structure for the agriculture sector by establishing a new bank. NABARD is the result of this recommendation. It was set up with an initial capital of Rs 100 crore, which was enhanced to Rs 2,000 crore, fully subscribed Role and Functions †¢ NABARD is an apex institution accredited with all matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas. †¢ It is an apex refinancing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas †¢ It takes measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc. †¢ It co-ordinates the rural financing activities of all the institutions engaged in developmental work at the field level and maintains liaison with Government of India, State Governments, Reserve Bank of India and other national level institutions concerned with policy formulation. †¢ It prepares, on annual basis, rural credit plans for all districts in the country; these plans form the base for annual credit plans of all rural financial institutions †¢ It undertakes monitoring and evaluation of projects refinanced by it. †¢ It promotes research in the fields of rural banking, agriculture and rural developmentby the Government of India and the RBI. Mission Promoting sustainable and equitable agriculture and rural development through effective credit support, related services, institution building and other innovative initiatives. In pursuing this mission, NABARD focuses its activities on: Credit functions, involving preparation of potential-linked credit plans annually for all districts of the country for identification of credit potential, monitoring the flow of ground level rural credit, issuing policy and operational guidelines to rural financing institutions and providing credit facilities to eligible institutions under various programmes Development functions, concerning reinforcement of the credit functions and making credit more productive Supervisory functions, ensuring the proper functioning of cooperative banks and regional rural banks Objectives NABARD was established in terms of the Preamble to the Act, â€Å"for providing credit for the promotion of agriculture, small scale industries, cottage and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting IRDP and securing prosperity of rural areas and for matters connected therewith in incidental thereto†. The main objectives of the NABARD as stated in the statement of objectives while placing the bill before the Lok Sabha were categorized as under : 1. The National Bank will be an apex organisation in respect of all matters relating to policy, planning operational aspects in the field of credit for promotion of Agriculture, Small Scale Industries, Cottage and Village Industries, Handicrafts and other rural crafts and other allied economic activities in rural areas. 2. The Bank will serve as a refinancing institution for institutional credit such as long-term, short-term for the promotion of activities in the rural areas. 3. The Bank will also provide direct lending to any institution as may approved by the Central Government. 4. The Bank will have organic links with the Reserve Bank and maintain a close link with in. sources of Funds Authorised share capital of NABARD is Rs 500 crores and issues and paid up capital is Rs 100 crores. NABARD accrues additional funds from borrowings from the Government of India and any institution approved by the Government of India, issue and sale of bonds i.e. Rural Infrastructural Development Bond, borrowings from RBI, deposits from State Governments and local authorities and gifts and grants received . NABARD have been providing financial assistance to various financial institutions engaged in Rural Credit Delivery System. These agencies include Co-operative Credit Institutions, Regional Rural Banks and Commercial Banks. The demand for funds for rural development has come up considerably in recent times. To meet the increasing demand of rural credit, NABARD raises funds from the following sources: (i) Capital: It went up from Rs.100 crore in March 1992 to Rs.1500 crore in March 1998 and further Rs. 2000 crore in 1999. The total Capital of NABARD is contributed by Government of India and RBI. The capital remained at Rs. 2000 crore in March 2002. (ii) Deposits: The deposits mainly come from Rural Infrastructural Development Fund (RIDF) introduced in Central Government Budget from the year 1995-96. Another source of deposits comes from banks which fall short of attaining priority sector target. The total outstanding RIDF deposits aggregated Rs. 9725 crore as on 31st March 2002. (iii) Borrowings: NABARD raises funds through market borrowings, Loans from Union Government and borrowings in Foreign Currency from abroad. Apart from these they also borrow funds from RBI. Their borrowings are mainly from three sources. They are by issue of bonds, borrowings from Government of India and borrowing abroad in foreign currency. The total outstanding borrowing amounted to Rs. 15,772 crore in March 2002. (iv) Reserves and: The excess of income over expenditures is generally accumu- Surplus lated as ‘Reserves and surplus’. As on March 2002, these reserves aggregated to Rs. 3626 crore. (v) Nation Rural Credit: These funds were earlier provided by RBI to NABARD in con- Funds (Long-term section with assistance under Agriculture Sector. These were Operation Fund & given out of profits earned by RBI. They stood at Rs.11064 crore Stabilization Fund) as on March ’99. However it has gone up to Rs. 13,975 crore as on March 2002. However, Reserve Bank stopped contributing large sums towards these two Funds from 1994. Presently, the RBI contributes only Rs.1.00 crore each to these funds as a symbolic gesture because the RBI Act provides for such contributions. The balance contribution now comes from NABARD’s own profit. (vi) Rural Infrastructural Development Fund (RIDF): The setting up of RIDF was announced in the Union Budget for 1995-96. The RIDF was set up with a contribution of Rs. 2000 crore mainly to provide assistance to State Governments to take up infrastructure projects pertaining to irrigation, rural roads, bridges and flood control measures. Contributions to this Fund came from Indian Scheduled Commercial Banks (other than RRBs) which failed to achieve the minimum agricultural lending target of 18 per cent of net bank credit. The shortfall of amounts in the target achievement was required to be kept in the RIDF with NABARD. Similarly RIDF II was set up in 1996-97 with contributions made by public sector banks which failed to achieve the minimum priority sector advances of 40 per cent. The shortfall in their target amount has to be kept in RIDF II. RIDF III was set up in 1997-98 with shortfall in priority sector landings of all private and public sector commercial banks. The contributions to these Funds were eligible for interest payment to be decided by Reserve Bank from time to time. The Funds are managed by NABARD. Loans out of these funds are mainly provided to State Governments to complete existing rural infrastructural projects and also for taking up new infrastructural projects in rural areas. Loans out of RIDF I was provided interest at the rate of 13.0 per cent and at 12.0 per cent out of RIDF II and III. The projects generally pertain to irrigation facilities and construction of Roads and Bridges in rural areas. Similarly RIDF IV and V were created in the Union Budget during 1998-99 and 1999- 2000. Further RIDF VI and VII were created in 2001 and 2002 with a corpus of Rs. 4,500 crore and Rs. 5,000 crore respectively. The scope of the fund has been extended to cover Gram Panchayats, Self Help Groups to develop rural infrastructural facilities like soil conservation, rural market yards, drainage improvement, etc. Students may observe the capital of NABARD has gone up by Rs. 1,500 crore to Rs. 2,000 crore during the year 2002. Similarly, the RIDF deposits which were only Rs. 3,608 crore in March 1999 were increased to Rs. 9,725 crore as on March 2002. The borrowing of NABARD has gone up substantially in the recent past from Rs. 9,000 crore in March 1999 to Rs. 15,772 crore in March 2002. The aggregate resources of NABARD were also substantially increased from Rs. 28,986 crore in March 1999 to Rs. 45,098 crore in March 2002. On the uses of funds while the loans and advances increased by about 25% between March 1999 and March 2002 loans out of RIDF funds went up substantially from Rs. 3,667 crore to Rs. 10,435 crore during the same period.

The Organizational Culture of Quinlans - 3389 Words

The Organizational Culture of Quinlans Introduction Quinlan has been UK’s foremost retail giant for a long period of time. By end of 1998 there was evidence of a crisis and since then the company has been on a decline. The company has been ignoring market changes and trying to maintain its corporate image and identity. This has caused the customers to drift to more fashionable brands causing huge loss of business to Quinlan. Presently the company is on a restructuring exercise to improve sales with particular emphasis on customer satisfaction and marketing. Organisation culture at Quinlan’s Organisation culture can be defined as the set of key values, beliefs, understandings and†¦show more content†¦This culture gives prominence to achievement and competitiveness. Employees usually work long hours to achieve certain goals. c) Clan – This culture is reflected in organisations that emphasise on employee’s participation in meeting changes of the environment. Particular attention is paid to employee well welfare. d) Bureaucratic - This type of culture is visible in organisations that follow a well-defined way of doing things. Employees are not encouraged to take risks and rewarded for following rules. This is suitable for a stable environment that is hard to find in these modern days. It is visible that Quinlan’s culture was bureaucratic. In particular Quinlan had: a) Properly defined rules and procedures to function in a predictable and routine manner b) Roles were clearly defined and labour was divided based on these roles c) A hierarchical chain of command d) Clear separation of ownership and control Culture and organisation success Daft, Management, 2003, chapter 3 explains that an organisation has two main environments: the external and internal. The external environment includes elements that exist outside the boundary but have the ability to affect the organisation. Eg. competitors, resources, technology, customers. The internal environment consists of