UTILIZATION AND IMPACT OF SUBSIDIZED AGRICULTURAL CREDIT (SAC) IN KARNATAKA: AN ECONOMIC ANALYSIS
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Date
2013-06-30
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UNIVERSITY OF AGRICULTURAL SCIENCES RAICHUR
Abstract
Agriculture crop loan was subsidized by Government of Karnataka during 2004-05 to provide adequate credit at cheaper interest rate to all categories of farmers in time of need & to help in purchasing of farm inputs.To assess the utilization and impact of SAC, the study was conducted in North East Karnataka region. The study used both primary and secondary data to fulfil the objectives of the study. Multistage sampling procedure was followed to collect the primary data from sample farmers. The data relating to barrower agriculture credit, utilization of credit, transaction cost, constraints faced by farmers, etc. were collected from 60 farmers who have borrowed SAC from commercial bank and equal numbers of farmers who have borrowed SAC from co-operative banks. To assess the impact of SAC on farmers’ economy, the data were also collected from 120 non-availed farmers representing small and large categories.
The results revealed that at national level, the commercial banks (70.61%) have the highest share in the total disbursement of SAC followed by co-operative banks (18.86 %) and RRBs (10.53 %). The similar pattern was observed for Karnataka state. The net returns realized was considerably higher in SAC availed small and large farmers as compared to non availed small and large farmers in both redgram and cotton production. The total transaction cost to loan amount borrowed was slightly higher in the case of small farmers as compared to large farmers in both the commercial bank and cooperative bank. Among the institutions, the transaction cost was high for the farmers who have barrowed SAC from commercial banks compared to co-operatives bank. The higher transaction cost was the major constraints expressed by the small and large farmers of commercial banks. Whereas insufficient credit limit was the major component faced by small and large farmers of co-operative banks.
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