CAPITAL FORMATION IN AGRICULTURE - IMPACT ON FARM PRODUCTIVITY, INCOME AND PROPENSITY TO SAVE IN SOUTHERN KARNATAKA
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Date
2019-09-19
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UNIVERSITY OF AGRICULTURAL SCIENCES, GKVK BENGALURU
Abstract
The present study endeavours to investigate trends of farm level investment, sources
of income, pattern of investment, sources of funds for investment, propensity to save,
factors influencing capital formation and technical efficiency of different farms viz.,
small, large, rainfed and irrigated in Southern Karnataka were during 2017-18. The study
was taken up in Tumakuru and Ramanagara districts representing agriculturally
progressive and less progressive areas, respectively with total sample size of 240. The
collected information was analysed using different statistical and econometric tools. The
results showed that, the rising trend with higher magnitude was observed in less
progressive area. From 2009-10 to 2017-18, the aggregate capital formation was high in
progressive area (` 752102/ha) compared to less progressive (` 501932/ha) area. The
priority of investment was on irrigation structures (29 %) in progressive area, whereas it
was on farm machinery and equipments (27 %) in less progressive area. The proportion
of credit provided by institutional sources for capital formation was higher in progressive
area (57 %) with higher propensity to save than in less progressive area (41 %). In
progressive area, irrigated land, income and institutional credit significantly influenced
capital formation, whereas in less progressive area education, income, borrowed capital
and institutional credit had significant influence. Overall, the findings of the study
suggest that, capital formation at farm level had increased the income, savings and farm
efficiency in progressive area. Therefore, there is a need to expand formal credit
institutions to make medium and long term loans available for farm activities in less
progressive areas.