DOES FINANCING FOR AGRICULTURE STRENGTHEN THE ENDURANCE OF THE AGRARIAN ECONOMY?

Abstract

Agricultural credit gained its importance nowadays. This paper examines about the various sources of finance provided by public and private sector banks and co-operative and rural banks in India. It also discuss about the credit facilities provided by various land development banks and the level of farmers satisfaction about the credit policies of these banks. This chapter denotes the land mortgage interest rates provided by the co-operative banks. It examines the relationship between agricultural credit and the gross domestic product of our economy. Because agriculture is the main backbone of our Indian economy, any increase or decrease in the agricultural production will be definitely reflects in our GDP. Mainly most of our exports are agricultural products and food items. Hence from interdependence to till date, our government policies and the financial budget mainly focuses on agriculture.

In recent days most of the banks in India providing agricultural credit for the farmers, it will induce the farmers to perform more agricultural practices. Previously agriculturalists mainly depend upon the private financial intermediaries. They are not getting any finance or assurance from the central and state government. Since from 1970’s systematic political policies will support the agriculture. In this study objectives are framed on the basis of the farmer’s opinion about the credit policies of various banks in India. This paper also examines about the various socio- economic factors influence the adoption of agricultural finance. Apart from this our country also promotes the various micro finance institutions for providing loans to farmers with low rate of interest. The results from our study clearly show that finance from banks and other government regulated institutions will have significant impact on crop productivity.