Role of Agricultural Credit towards Productivity in Paddy, Cotton and Maize

Author: Y. Archana Karuni, K. Suhasini, R. Vijaya Kumari and G.P. Sunandini

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Abstract

The present focus of Indian agriculture is to improve agricultural productivity and profitability contributing to growth of the farm economy. For this challenge to be achieved credit being the critical input and occupying an important place in strategy for development of agriculture, the present thrust is laid through intervention in Agricultural credit. The lack of adequate financial resources and absence of timely credit facilities at reasonable rates result in a situation wherein many of the farmers, even though otherwise willing, are unable adopt and harness the results arising out of major and minor technological changes. In the current study to emphasize the role of credit towards agricultural production Cobb-Douglas form of production function has been fitted to understand the relationship between per hectare output of crops i.e. paddy, cotton and maize and quantities of inputs while institutional credit is taken as dummy variable. In paddy, credit is a positive factor increasing productivity by 0.04 per cent at 0.05 per cent probability level. Regression coefficient of credit for cotton was 0.19. In maize contribution of credit is positive to maize yield and was found to be capital intensive crop.

Keywords

Agricultural credit, productivity, loanee, non-loanee farmers.

Conclusion

The study concluded that institutional agricultural credit (crop loan) increased the productivity of the selected crops if used for the purpose it has been taken. The yield level obtained by loanee farmers of all size groups were significantly higher than non-loanee farmers in paddy cotton and maize. The analysis has revealed that credit has a positive impact and was a significant factor in increasing the productivity of paddy crop and maize. Access to institutional credit by loanee farmers enabled the farmers to purchase timely inputs helped realize increased productivity and thereby contribute to improved income, decreased dependency on noninstitutional sources unlike non-loanee farmers. Measure should be strengthened to access credit in right time, through right agency and adequate quantum shall shield the farmer from exploitation by non-institutional sources, greater cost of credit and avoid falling into debt trap thereby continue farming with profitable yields.

References

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How to cite this article

Y. Archana Karuni, K. Suhasini, R. Vijaya Kumari and G.P. Sunandini (2022). Role of Agricultural Credit Towards Productivity in Paddy, Cotton and Maize. Biological Forum – An International Journal, 14(1): 1813-1818.