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ThesisItem Open Access Institutional preference for agricultural credit In Kasaragod district of Kerala(Rural Banking and Finance Management, College of Cooperation, Banking and Management, Vellanikkara, 2017) Vasavi, B; KAU; Molly JosephCredit is one of the important interventions for improving agricultural production and productivity and helps to mitigate farmers’ distress. Often, institutional sources contribute only meagre percentage of agricultural credit to the cost of cultivation. Non institutional sources are often tapped by the farmers to meet the gaps in demand for agricultural finance, inspite of inherent weaknesses of higher interest rate and rigid loan collection strategies. The study entitled ‘Institutional preference for agricultural credit in Kasaragod district of Kerala’ was conducted with the following objectives of (a) identifying the sources and extent of credit availed by the farmers, (b) identifying the institutional preference for agricultural credit with a view to analyse the factors affecting the institutional credit and (c) identifying the constraints in availing agricultural credit. The sample size of the study was 90 respondents, consisting of 30 each from two grama panchayats of Kasaragode district viz., Parappa and Manjeshwaram from two blocks Kasaragode and Hosadurg respectively selected by multi stage sampling method. Data were collected through pre tested structured interview schedule. The major statistical tools used for the study were Percentages, One way ANOVA, Log Regression model, Independent samples Kruskal- Wallis test, Factor analysis, Mann- Whitney U test were employed to analyse the data. Household location, sources of agricultural credit and market location of the selected respondents in the sample panchayats were plotted. The results obtained after the analysis of sources and extent of credit availed by the farmers revealed that 50 per cent of marginal farmers and 23 per cent each of small & medium and large farmers were found to be devoid of institutional credit. Some farmers have opted for leaving their farms uncultivated as there was no one to look after the farm and tendency to avail the credit is less. About 40 per cent of the large farmers have availed more than Rs. 1.5 lakh for cash crop cultivation and the farmers who availed credit above 1 lakh remains slightly high. Marginal farmers availed an average loan amount of Rs. 91,833, while that of a small farmer is as high high as Rs. 2,18,500. The multiple comparison test proved that there is significant difference in the total agricultural credit availed by large and marginal farmers. Cooperatives are having an upper hand in disbursal of agricultural credit for all the farmer categories followed by RRBs and public sector banks by concentrating on smaller ticket loans. The farmers were found to have availed lesser borrowing from microfinance institutions and private sources like moneylenders. The Log linear regression analysis results showed that, area is the main predictor that influenced the credit availed by farmers while other factors such as distance, number of visits to bank, expenses, interest rate, age failed to have any influence. Overall crop loan scheme utilization of 50 per cent is observed (i.e. 45 out of 90 respondent farmers are availing crop loan from either of the institutional sources). For KCC, Overall almost 50 per cent utilization is observed (i.e. 42 out of 90 respondent farmers are availing KCC from all the institutional sources). Almost 40 per cent of the farmers are unaware about the AGL scheme. Results showed that an average of 45 per cent of the farmers is not aware of the GCC scheme and gap in awareness as well as utilization of this scheme is very less. . Overall 64.4 per cent of the farmers unaware about the live stock schemes. The second objective of the study was to identify the institutional preference and factors affecting the institutional preference of farmers. The overall institutional preference was estimated by combining the scores obtained for factors like proximity, procedural hassles, banker’s behavior, approachability, flexibility, cost, adequacy and timeliness. Reviewing the overall scores, marginal, small and large farmers indicated co-operative banks to be their most preferred choice, followed by RRBs as the next best alternative. The results of factor analysis showed that institutional factors explain 36 per cent of the choice of institutional source and credit related factors are responsible for 29 per cent choice of source of finance. Further Independent samples Kruskal-Wallis test revealed that factors including proximity, cost of credit, adequacy and timeliness do not have any influence on the institutional preference by farmers. However, factors like procedural hassles, approachability, banker’s behavior and flexibility are found to affect the choice of source of finance. Regarding problems experienced by the farmers, marginal and small farmers are experiencing the problem in filling applications and understanding the schemes. Eighty per cent of small and marginal farmers are not satisfied with interaction pattern of commercial bank managers. Almost 93 per cent of marginal and small farmers are facing problems in pooling the documents for submitting the loan application. When the analysis was carried out separately for each type of farmer, institutional preference was found to be affected by commonly experienced problems while availing credit by marginal farmers. Thus it may be concluded that demand for agricultural credit by farmers are still not being satisfied in the expected pattern where marginal and small farmers remain underprivileged due to various institutional and credit related factors affecting credit delivery. Co-operatives are most preferred source of finance which needs revival keeping in view of the present issue of demonetization. Further it was suggested that, as micro credit could not make any significant contribution for financing agrarian activity in the study area, micro credit channels have to be improved for providing farmers with necessary finance. Financing institutions, especially commercial banks should simplify their applications for loans by removing the irrelevant details in the application forms. The scale of finance for short term crops or crop loans and medium and long term agricultural loans in case of organic farming may also be calculated and circulated to financing institutions by the District Level Technical Committee (DLTC) and NABARD respectively. The study has concentrated on preferences of institutions for different categories of farmers while availing credit in Kasaragod district. Their extent of utilization or misutilisation in the disbursed credit in the District was not an area of enquiry in this study, which can be taken up for further inquiry by researchers, which will be beneficial to the financing institutions also to expand their extent of credit and also to contain their Non Performing Assets (NPA) in agriculture.ThesisItem Open Access Indebtedness of farmers: a study of farmer borrowers of primary agriculctural credit societies in Palakkad district of Kerala state(Department of Rural Banking and Finance Management,College of Co-operation,Banking &Management, Vellanikkara, 2010) Sowmya, K C; KAU; Lizy, M AThe study entitled “Indebtedness of farmers: A study of farmers borrowers of Primary Agricultural Credit Societies in Palakkad District was conducted to examine the factors that contribute to the problems of indebtedness among the farmers in Palakkad District and to suggest the measures to be taken to solve the problems. The study was conducted among two PACS of Palakkad District viz., Peruvemba Service Co-operative Bank (PACS 1) and Polpully Service Co-operative Bank (PACS 2). The sample size included 90 respondents i.e., 45 borrowers from each PACS at random, of which 76.67 per cent were defaulters and rest were nondefaulters. Ten officials (including President and Secretary) from each PACS were also interviewed to collect information on the effectiveness of the loan operation system of the PACS. Secondary data on selected performance indicators of the PACS were also used for the study. Statistical tools like Average Annual Growth Rate (AAGR), simple averages, percentages, simple growth rate, simple correlation, efficiency index, priority index and bi-variate tables were used for the analysis. The analysis revealed that inadequacy of income, natural calamities and crop failures, non availability of labourers and high wages were the main reasons for indebtedness. Faith in loan waiver or write off policy, non institutional loan and high interest rate, defective loan policies, illness of borrower or family members, ceremonies, fixation of unrealistic due and lack of access to consumption loans and diversification of income have also been pointed out as reasons behind increasing indebtedness of farmers. The study revealed that procedural delays, lack of adequate securities to hypothecate, misutilisation of loans and inadequate income restricted the borrowers from getting timely loans. It was further observed that defective loaning policy, conspicuous consumption and illness of family members as well as hope for loan write-off policy were the other reasons behind non-repayment by borrowers. Majority of the defaulters opined that the loan amount provided by PACS were insufficient to meet the project cost there by forcing the borrowers to approach other sources for finance. This inturn puts an additional burden on farmers. From the interbank comparison on the effectiveness of the present loan operation system, it was found that the loan operation system of PACS (1) is least efficient and in the case of PACS (2) it is moderately efficient. The overall performance of PACS, commitment of BODs, management, member relations, intrabank relations were appreciable. But in the opinion of the bank officials, Presidents and Secretaries there was something more to be perfected in the existing loan operation system. According to the officials and employees of PACS, the reasons for indebtedness include natural calamities, high cost of cultivation, insufficient income from agriculture, non availability of labourers etc. The mounting overdues affecting the net profit position of PACS. Misutilisation of loan due to inadequate staff for field supervision and loan appraisal was yet another problem as far as the PACS were concerned. The effectiveness of any scheme to a greater extent is correlated to the number of visits made by the bank officials to the beneficiaries. There exist a drastic need for skilled personnel for field supervision and loan appraisal. It is obvious that co-operatives are still following traditional methods and techniques of management, which has to be replaced by modern measures of management and accounting.ThesisItem Open Access Impact of institutional interventions for promotion of rice farming in Thrissur district(Department of rural banking and finance management, College of cooperation, banking and management, Vellanikkara, 2014) Sreelakshmi, C C; KAU; Molly JosephInstitution is an effective instrument for economic development. Rice being the staple food of Kerala and rice farming as the livelihood of sizeable number of people, deteriorating rice cultivation demands immediate state intervention. Institutional support system for input supply, production process and marketing can positively promote and protect rice farming. The study entitled ‗Impact of institutional interventions for promotion of rice farming in Thrissur District‘ was conducted with the objectives of (a) examining the developmental programmes/ schemes of various governmental and other institutions for the promotion of rice farming in Kerala, (b) analysing the impact of developmental schemes of various institutions on the net income of the farmers and (c) analysing the constraints of rice farmers so as to suggest policy measures for the promotion of rice farming. Ninety respondents consisting of 30 each from three panchayats of Thrissur district viz., Pazhayannur, Adat and Mundathikode were selected as the sample size through multi stage random sampling method. Data were collected through pre-tested structured interview schedule. The critical variables of the study were the institutions and their schemes, various assistance to rice farmers, demographic details of respondents, volume and cost of cultivation, net income, sources and uses of credit, marketing agencies for rice procurement and constraints of rice farming. The major statistical tools used for the study were Chi-square test, Paired t-test, ANOVA test, Post-hoc test for multiple comparison, Cobb-Douglas production function and Mann-Whitney U test. Consultative Group on International Agricultural Research (CGIAR), New York coordinate and cooperate with various countries to promote rice farming at the international level. International Rice Research Institute (IRRI) is the most important rice development institution under CGIAR. Department of Agriculture under Government of India is the pivotal, around which the whole national programmes for rice farming revolves especially Rashtriya Krishi Vikas Yojana (RKVY) with components of High Yielding Variety (HYV) seeds, fertilisers and other assistance to paddy development. Central Rice Research Institute, Cuttack, has contributed remarkably to HYV seeds in rice in the country. Commercial banks have immensely supported the voluminous credit needs of rice farming in the country, especially through Kisan Credit Cards and Interest Subvention Schemes. At the state level, institutions working for rice farming are State Department of Agriculture, Kerala State Civil Supplies Corporation (SUPPLYCO), Co-operative banks and Kerala Agricultural University (KAU). The Minimum Support Price (MSP) for paddy is operated through SUPPLYCO. Cooperatives, in addition to the programmes of State/ local governments, have their own schemes for rice farmers. KAU is a premier institution for rice farmers in the State. Krishi Vigyan Kendras, and Krishi Bhavans are also important institutions engaged in rice development. Agricultural Technology Management Agency (ATMA) is a major non - governmental agency involved in promoting rice farming. Second objective of the study is to measure the impact of institutional interventions on net income of farmers by supporting production, credit and marketing activities. All the respondents availed assistance under RKVY and Sustainable Development of Rice (SDR) schemes for seeds, fertiliser, training and information. It is found that seed component of SDR and RKVY made positive shift among rice farmers to HYVs in cultivation. Paired t-test was employed to analyse the impact of seed subsidy, which is statistically significant at five per cent level. Cobb-Douglas production function used for analysis with gross income as dependent variable and seed, labour, fertiliser and herbicide as independent variables, observed that labour and seeds are important determinants of income. It implies that seed subsidy has promoted rice production. Private agencies like money lenders are also prominent among rice farmers. Commercial banks are found to be providing higher per capita credit to farmers in all the three study areas. Cobb-Douglas production model was fitted by taking total production as a function of Gross Cropped Area and credit. It was noted that credit is a highly significant determinant in production. With respect to marketing, MSP gave confidence to farmers to produce by ensured procurement price and also by stabilising the open market prices. Mann-Whitney U test was used to compare farmers marketing to SUPPLYCO for MSP and to private agencies. Significant difference was found between income of farmers who are supplying their produce to SUPPLYCO and that of supplying to private agencies. Open ended questions were administered to respondents to analyse the third objective of constraints in rice farming. The responses were classified into four categories, viz., (a) production, (b) finance, (c) marketing and (d) institutional constraints. . Lack of availability of skilled labourers, high wage levels and attack of pests and diseases are the most important production problems. Inclusion of rice farming operations under the National Rural Employment Guarantee Programme (NREGP) can reduce the problem of availability of labour and high wage levels. Adoption and practice of IPM techniques can reduce the major production problems of pests, diseases and weed. Lack of availability of timely and adequate credit is the major financial constraint faced by the farmers. Provision of timely interest free loans and interest subsidies, in adequate amounts will attract more farmers to rice farming. In marketing, delay in realisation of cash from sale proceeds to SUPPLYCO is the important problem, which leads to delayed repayment of credit from private agencies at exhorbitant rate of interest. If the system of ‗linking of credit with marketing‘ followed by Adat Service Co-operative Bank is replicated to the other areas, this problem can be solved to a large extent. The convergence of all subsidies for rice cultivation and strengthening of existing paddy development agencies can reduce the institutional constraints. The study reveals that higher positive institutional interventions has led to increase in productivity, reduction in cost of cultivation, increase in net income and easy accessibility to subsidies, interest free loans and marketing facilities, as evident in the case of Adat Service Co-operative Bank. Institutions are instruments of growth. Institutional interventions to support farmers by ways of seed subsidy, MSP and interest subvention have been found to be influencing the net income of farmers positively. The support system has also protected and promoted not only the production and product price but instilled confidence in the minds of farmers and insulated the market against uncertainty. Hence institutions are inalienable input to inspire and insulate the economy. But existing constraints in rice farming showed there are miles to go to provide economic independence to rice farmers.ThesisItem Open Access Impact of agro machinery service centres on mechanisation of paddy cultivation in Kerala(College of Co-operation Banking Management, 2015) Salini, R Chandran; KAU; Molly, JosephAgricultural operations essentially require labour as an inevitable input. But the availability and cost of agricultural labour is a major problem faced by the farmers of Kerala. The role of Agro Machinery Service Centres (AMSCs) in the mechanisation of farming operations is assuming importance in this scenario. Agro Machinery Service Centres are service providers where all agro machinery operation services with respect to crop production are rendered on contract basis. An Agro Machinery Service Centre should have all facilities to meet the critical need of the farmers and at the same time become a self-reliant and viable proposition. The study entitled “Impact of Agro Machinery Service Centres on mechanisation of paddy cultivation in Kerala” was conducted with the main objectives of assessing the extent of mechanisation among farmers, identifying the determinants of paddy mechanisation through Agro Machinery Service Centres (AMSCs), studying the impact of AMSCs on mechanisation paddy cultivation and examining the role of institutional credit in the mechanisation of paddy farms. One hundred and thirty five respondents from three Panchayats of Thrissur district viz., Avanoor, Kuzhoor and Pazhayannur and three AMSCs viz, Green Army, Sivasakthi and Parijatham were selected as samples through multistage sampling method. The sample farmers were categorised into two viz., users of AMSCs and non-users of AMSCs. Out of the total sample, 90 farmers are using the services of AMSCs and 45 are not using the services of AMSCs. The users are again grouped into 45 individual users and 45 group users /Padasekharams. Data were collected through pre-tested structured interview schedule. The major statistical tools used for the study were independent sample ttest, one way ANOVA, Post-hoc test, Chi-square test, Yates’ correction for continuity and indices such as mechanisation index, benefit index of AMSCs, service quality index of AMSCs and usage index of farm implements by farmers. The extent of mechanisation adopted by farmers is analysed based on the farm size of farmers, different crops cultivated by them, purposes of mechanisation, area of mechanised land holdings of the farmers, farm implements used and owned by the farmers and measurement of adoption of mechanisation by the farmers. Mechanisation of farm lands is confined to paddy cropped areas. It is found that 81.43 per cent of total land holdings of farmers are mechanised. The mechanised land holding is more for users of AMSCs (90.74 percent) than the non-users (62.80 percent). The major farm implements used by farmers consist of tractors, transplanters, harvesters and sprayers. Users of AMSCs mainly adopt mechanisation for the purposes of land preparation, transplanting and harvesting whereas non-users adopt mechanisation for the purpose of land preparation and harvesting. The major farm implement owned by both categories of farmers are sprayers .The usage index of mechanised implements worked out to be 89 per cent by the farmers. Mechanisation index is constructed as ratio of cost of use of machines and total cost of use of human labour, draught animals and machines to measure the extent of mechanisation among the farmers. The mechanisation index shows that the extent of mechanisation is more in the case of users than the non-users of AMSCs. The adoption rate of mechanisation is found to be 57.34 per cent for users and 30.72 per cent for non-users of AMSCs. The mechanisation index for usage of services of Agro Machinery Service Centres is done separately in order to understand the effect of using such services in replacing the overall labour costs incurred in farm operations and also to understand the contribution of services of AMSCs in overall mechanisation of paddy farming. The mechanisation index of farmers who use AMSC services is estimated at 30 per cent. . i.e., the cost incurred by non - users over and above this 30 per cent for transplantation can be saved, if they shift to mechanisation of transplantation. It is also found that the share of transplantation costs to total mechanisation costs of land preparation, transplantation and harvesting of users is nearly 51 per cent. This implies that, out of the total mechanisation costs, 51 per cent is contributed by AMSCs by the way of transplanting cost. The determinants of farm mechanisation through Agro Machinery Service Centres is analysed by examining the relationship between mechanisation index of farmers with variables such as education level, farm experience, cost of cultivation, production and income from paddy of farmers. Chi-square test and Yates’ correction factor for continuity was employed to study the relationship between these variables with mechanisation index. Among the above said variables, only cost of cultivation has significant relationship with the adoption of mechanisation by the user farmers and is a determinant of adoption of mechanisation through AMSCs by the user farmers. But in the case of non-users, none of the variables is a determinant of the adoption of mechanisation by the farmers. The evaluation of service quality of AMSCs shows that reduced cost of cultivation, availability of skilled labour force, and saving in time are the factors that encourage the adoption of mechanisation by farmers through AMSCs. The impact of AMSCs in paddy farming is measured by attempting a disaggregated analysis of different aspects of cost and production of rice. Mechanisation in paddy cultivation has resulted in labour displacement; AMSCs have served the purpose of labour saving in farm operations of transplanting. Average labour costs per acre of non-users are estimated as Rs. 37185 whereas that of users is estimated to be Rs. 29270. The highest difference in costs is found in the case of transplanting, where non – users have to spend Rs 2340/- per hectare more than the users of AMSCs. The usage of migrant labourers from the State of West Bengal for manual transplanting by the non-user panchayats reduced the difference between transplantation using machine and manual labour to Rs. 2340. Estimating the net effect of labour saving and machine hiring costs reveals that average cost of cultivation of users of AMSCs (Rs 41590/Ha) is less than that of non-users (Rs.48360/Ha). Increased usage of mechanisation (by way of usage of AMSC services) also show impact on production, wherein the average production of user farmers (6090 kg/Ha) was found to be higher than non-users (5025 kg/Ha). The users of AMSCs are enjoying two types of benefits from their service centres. One is economic benefits and the other one is operational benefits. Operational benefits include timeliness in farm operations, solution to labour scarcity and increased acreage of cultivation. The economic benefits deal with capital investment, farm income and sustainability of farming and motivation to continue farming in future. The economic benefits (92 per cent) have surpassed the operational benefits (88 per cent) since the indicator ‘increased acreage under cultivation’ has scored less. Hence, mechanisation through AMSCs has motivated all the user farmers to remain and continue in rice farming, but still has to go a long way to induce them to bring additional land under rice farming Institutional credit has a pivotal role in the agricultural development of the country, as one of the critical inputs for agriculture. It capitalises farmers to undertake new investments and adopt new technologies. A large number of institutional agencies like Co-operatives, Regional Rural Banks (RRBs), Scheduled Commercial Banks (SCBs), Non– Banking Financial Institutions (NBFIs), and Self Help Groups (SHGs) are involved in meeting the short and long term mechanisation needs of farmers. In the case of farmers and Agro Machinery Service Centres studied, loan for mechanisation is found to be availed by none. All the service centres are provided with agricultural implements by Grama Panchayats and Block Panchayat at free of cost. Only one farmer owned machinery (tractor) for agricultural operations. The farmers seek the help of Agro Machinery Service Centres and private agencies for their mechanisation needs. It is not economical for the farmers to own agricultural implements. Hence the role of institutional credit in mechanisation of paddy farming in the study area was found to be very limited. Even though KAU is not directly involved in the activities of Green Army, it is to the credit of the Agricultural Research Station, Mannuthy, of the University that its earnest efforts to find a solution to the agricultural labour shortage in the State, by way of training to a group of 18 farmers and farm workers of Wadakkanchery Block Panchayat has culminated in the formation of Green Army, which by its sincere efforts and the patronage of the Panchayat and PSCB has achieved State level acceptance and has become a model for other Agro Machinery Service Centres in the State. The introduction of AMSCs is an apt solution for severe labour shortage faced by farmers in paddy farming. They facilitate timely availability of machine labour and timeliness in farm operations. Hence, transplanting service of AMSCs, resulted in reduced cost of cultivation, increased production and farm income of farmers. Mechanisation through AMSCs has motivated all the user farmers to remain and continue in rice farming, but still has to go a long way to induce them to bring additional land under rice farming.ThesisItem Open Access Impact of institutional credit on agricultural production in Kerala(College of Co - operation Banking and Management, Vellanikkara, 2012) Karthika, Venugopal; KAU; Molly, JosephThe study on ‘Impact of institutional credit on agricultural production in Kerala’ has been undertaken with the objectives of assessing the source-wise and purpose-wise credit flow to agriculture; comparing the performance of various institutions in the provision of agricultural credit; examining the impact of institutional credit on agricultural production, and analysing the pattern of utilisation and impact of credit on farmers with respect to Pananchery Panchayat of Thrissur district. The study was based on both primary and secondary data. Major sources of data were, www.rbi.org.in, Agricultural Statistics at a Glance, Economic Review, and www.indiastat.com for the period 1984-85 to 2010-11 for India, and 1990-91 to 2010-11 for Kerala. Percentages, annual growth rates, compound annual growth rates (CAGR), ordinary line graphs, pie diagrams, Mann-Whitney U Test, correlation, simple and multiple linear regression, Cobb-Douglas model, Cochrane-Orcutt Regression model and Durbin-Watson d- Test were employed to analyse the data. Primary data have been collected from 60 farmers selected through stratified random sampling from Pananchery Panchayat of Thrissur district. The study has revealed that co-operatives are the major source of IC in India, and SCBs in Kerala, Thrissur and Pananchery Panchayat. Co-operatives are more interested to provide indirect loans in recent years. IC is mainly disbursed by way of short-term and production credit in India, Kerala and Pananchery. Simple and Multiple Linear Regression, Cobb-Douglas and Cochrane-Orcutt Regression models revealed that IC has significant and positive impact on agricultural production in India and Kerala. Cobb-Douglas model for the Pananchery Panchayat also pointed out the significant contribution of IC in agricultural production. As far as the problems of farmers of Pananchery Panchayat are concerned, availability of credit is not an important one. This might be one of the reasons for the high productivity compared to State average, in many of the crops cultivated in Pananchery, given the significance of institutional credit in agricultural production. The major problem related to IC as pointed out by them is the absence of initiatives and technically qualified staff for providing consultancy, bank related and marketing services to farmers from Krishibhavan, Panchayat and commodity boards. The farmers, especially illiterate are in dire need of qualified staff at Panchayat level for filling up of various forms and preparation of documents and proposals to be submitted to banks for financing, providing market intelligence services and making them competent to trade in futures markets in agricultural commodities so as to fetch reasonable prices for their products. The agricultural officers, according to the farmers are preoccupied with their routine functions. Hence it is suggested that the services of additional personnel competent to provide technical consultancy and guidance with respect to the financing and commodity market intelligence services may be provided to the farmers at the Panchayat level.