Which Is Best Investment Option For Farmers?

 Along with traditional investment avenues, farmers also need to allocate funds for improving crop productivity and reducing losses

Investment needs vary from individual to individual. The same applies to farmers, who generate most of their income from agricultural activities. To ensure prosperity across the country's rural areas, let us take a look at some investment options that are most suitable for farmers.

Cold storage warehouse - By increasing the shelf life of perishable items, farmers can reduce wastage and get better prices for their produce. A farmer can also give the cold storage facility to other farmers on rent basis. This will help generate additional income. To set up a cold storage facility, farmers can apply for loans from any of the available public sector banks in the area. A number of items can benefit from a cold storage facility such as fruits and vegetables, dairy products, meat, fish and eggs, flowers, mushrooms, semi processed items, etc.

Alternate income opportunities - Along with the primary rice or wheat crops, farmers can also invest in other income generating businesses such as livestock and poultry, beekeeping, mushroom farming, timber farming, etc. Many farmers have land that is not cultivated. This can be used for starting such high cash flow businesses. Some investment may be required to set up the basic infrastructure and purchase the necessary tools and equipment.

Risk management - As farmers are largely dependent on crop yield, it becomes important to allocate funds to insure their crops and livestock. A number of factors can adversely impact crops such as floods, drought, pests, microbial infections, hailstorm, heatwaves, etc. The government already provides crop insurance at affordable rates, wherein premiums are as low as 1.5% of the sum assured. By insuring their crops and livestock, farmers can ensure financial stability.

Gold investment - Farmers can invest some of their savings in gold. It is important to invest in gold in small amounts, so that any risk of loss due to theft or burglary can be avoided. Gold investment can benefit farmers with relatively large families. Also suitable for areas where the crime rate is low. Profits from the gold investment can be used to buy farm equipment or start other side ventures. Gold can also be used as gifts for loved ones at the time of their marriage.

Government savings schemes - Farmers can invest their savings in various government-backed savings schemes. Some options to consider include Public Provident Fund (PPF), Kisan Vikas Patra (KVP), Post Office Monthly Income Scheme (POMIS), Senior Citizens’ Savings Scheme (SCSS), PM Kisan Samman Nidhi, etc. These investment options are suitable for farmers, as there is virtually no risk. Moreover, returns are fixed and automatically generated after the term of the scheme. As such, farmers do not have to go through the hassle of tracking the market value of their investments.