Agricultural credit and agricultural productivity across Indian states: An analysis

Abstract

The study analyses the relationship between formal agricultural credit and agricultural productivity in India. Secondary data have been collected from various sources for the selected states of Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Odisha, Tamil Nadu, Uttar Pradesh and West Bengal for the time period 1990–1991 to 2017–2018. Fixed effect model is used to perform the state‐level panel data analysis to establish the relationship between the agricultural credit and agricultural productivity. In addition to this, the study also focuses on analysing the effectiveness of Doubling of agricultural credit policy. The findings from the analysis show that direct agricultural credit and doubling of agricultural credit policy has a positive impact on productivity, whereas the indirect credit has a significant negative impact on productivity. In order to increase agricultural productivity, policies should focus on providing direct credit at a larger scale.

Impact of agricultural credit disbursement on cereals yield in Odisha

“…They indicated that the credit provided to support agriculture in Odisha is inefficient and unable to make an impact upon the productivity of rice which is the major crop in Odisha. Similarly, the findings of other studies related to India also support the present study's findings (Manoharan and Varkey, 2021; Misra et al., 2016; Naidu et al., 2013; Shivaswamy et al., 2020). Further, findings are also observed in other countries around the globe, such as Senegal (Diallo et al., 2020), Togo (Agbodji and Johnson, 2021), Indonesia (Wicaksono, 2014), and Pakistan (Khan et al., 2013; Hussain and Taqi, 2014; Kashif et al., 2016).…”

“…However, any unarguable decision cannot be generalized to Odisha because country-specific attributes play a crucial role in the respective agricultural sectors. Besides, studies related to the impact of agricultural credit on agricultural yield for state-specific or aggregate India also provide few novel understandings (Das et al, 2009;Manoharan and Varkey, 2021;Misra et al, 2016;Naidu et al, 2013;Narayanan, 2015;Ramakumar and Chavan, 2014;Shivaswamy et al, 2020). However, the findings of those studies may not entirely apply to the Odisha economy due to some state-specific characteristics in the respective agricultural sectors.…”

“…Similarly, the study of Manoharan and Varkey (2021) employed panel data econometrics for the period 1990–91 to 2017–18 and found that agricultural credit has a positive impact on the yield of crops in India. Moreover, the study of Ramakumar and Chavan (2014) also established a positive association between agricultural credit and agricultural GDP in India.…”

Reconsidering agricultural credits and agricultural productivity nexus: Evidence from a global representative panel data

“…A substantial number of recent studies were devoted to investigating the effects of agricultural credits on agricultural productivity. As regards agricultural productivity, a great deal of research (Siriram, 2007;Das et al, 2009;Ali et al, 2014;Misra et al, 2016;Rehman et al, 2017;Seven &Tumen, 2020;Tuan Anh et al, 2020;Chandio et al, 2021, Manoharan & Varkey, 2021 identified the role of credits on agricultural productivity. While some of these studies used farm-level data, some of them has identified and addressed linkages focusing specifically on country-level data.…”

De Basileia para o campo: estimando a estrutura de dependência de >i<default>/i< em portfólios de crédito rural por meio de cópulas

“…Além do escopo dos pequenos produtores, a oferta de crédito é identificada como um fator responsável pelo aumento da produtividade rural em diversos países (Acclassato Houensou et al, 2021;Chandio et al, 2019;Guirkinger & Boucher, 2008;Hu et al, 2021;Jimi et al, 2019;Kassouri & Kacou, 2022;Li et al, 2020;Manoharan & Varkey, 2021), incluindo o Brasil (de Castro & Teixeira, 2012; S. R. F. Figueira & Rolim, 2020). Isto pode ser explicado, em parte, pela alta dependência deste setor ao financiamento, por conta de suas especificidades.…”