IMPACT OF INSTITUTIONAL AGRICULTURALCREDIT ON FARM PRODUCTION AND PRODUCTIVITY: A STUDY IN GOMATI DISTRICT OF TRIPURA
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Date
2017-07
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AAU, Jorhat
Abstract
Finance, considered to be the life-blood of any kind of enterprise, is the essential pre-requisite of every productive activity. Therefore, credit enables farmers to use various inputs and new technologies.It also keeps enterprise dynamic,develops products, keepmen and machines at work and encourages management to make progress and creates value through increased employment opportunities. The present study on impact of institutional agricultural credit on farm production and productivity was conducted in Gomati District of Tripura. The study was designed specifically to examine the sources and terms and conditions of credit, amount of credit distribution, purpose of credit and its impact on level of resource input use, yield and profitability of farms in the study area. A sample of 120 farmers comprising beneficiaries(60) andnon-beneficiaries (60) were selected randomly from six villages of three selected blocks of Udaipur sub-division for study. Tabular analysis, averages and percentage analysis, the cost concepts and production function analysis were employed for analyzing the data. The results of the study highlighted the following. 1. In regards to amount borrowings in the study area it was observed that total credit disbursement by the institutional agencies to the sample borrowers was `5939000. All the size group of beneficiary farmers borrowed crop loans at 7 per cent interest per annum and interest subvention of 3 per cent was provided to the farmers for promptly repayment of loans. 2. The analysis of resource utilization pattern on the production of major crops between the sample beneficiary farmers and sample non-beneficiary farmers in the study area revealed that the quantities of resources used were more in case of borrowers in respect of almost all the major inputs for the production of major crops over the non- borrowers. This was possible due to availability of funds in the form of credit from various financing institutions. 3. The study revealed that per hectare production of different major crops was higher on beneficiary farms as compared to non-beneficiary farms. The per hectare costs, returns and profits of beneficiary farms were also higher than
non-beneficiary farms. The production function analysis indicated that the productivity of different resources on beneficiaries farm was higher than the non-beneficiaries farm. Thus, the results of the present study have clearly demonstrated that there has been a positive impact of institutional agricultural credit on the levels of input use and thereby per hectare yield of the crops grown in the study area. Thus, the flow of farm credit has resulted in improving the economy of beneficiary farmers. This call for encouragement to the farmers for taking loan and to improve their farm economy by increasing productivity of farms. Simplification of the loan procedure by reducing the formalities, arranging loan rallies and NGO-Bank linkage programmes by different financial institutions for encouraging the farmers in extending credit facilities andproper documentation of land records and investigation for identification of real cultivators were the important policy implications which have emerged from present study.