“A STUDY ON FARMER’S CHOICE OF AGRICULTURE FINANCE

WITH SPECIAL REFERENCE TO MATHILAKAM PANCHAYAT”

Project Report submitted to

UNIVERSITY OF CALICUT
In partial fulfillment of the requirement for the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

Submitted by

ASWIN MS
(CCASBBAR21)

Under the supervision of

Mrs. Siji Paul.V

DEPARTMENT OF MANAGEMENT STUDIES

CHRIST COLLEGE (AUTONOMOUS), IRINJALAKUDA

MARCH 2021

1
 CHRIST COLLEGE (AUTONOMOUS), IRINJALAKUDA

UNIVERSITY OF CALICUT

DEPARTMENT OF MANAGEMENT STUDIES

CERTIFICATE

This is to certify that the project report entitled “A STUDY ON FARMER’S

CHOICE OF AGRICULTURE FINANCE WITH SPECIAL
REFERENCE TO MATHILAKAM PANCHAYAT” is a bonafide record
of project done by ASWIN MS, Reg. No. CCASBBAR21, under my guidance and
supervision in partial fulfillment of the requirement for the award of the degree of
BACHELOR OF BUSINESS ADMINISTRATION and it has not previously
formed the basis for any Degree, Diploma and Associateship or Fellowship.

Prof. C.L.BABY JOHN Mrs Siji Paul V

Co-ordinator Project Guide

2
 DECLARATION

I, ASWIN MS, hereby declare that the project work entitled “A STUDY ON
FARMER’S CHOICE OF AGRICULTURE FINANCE WITH SPECIAL REFERENCE
TO MATHILAKAM PANCHAYAT ” is a record of independent and bonafide
project work carried out by me under the supervision and guidance of Mrs Siji
Paul V, Assistant Professor, Department of Commerce and Management studies,
Christ College, Irinjalakuda.

The information and data given in the report is authentic to the best of my
knowledge. The report has not been previously submitted for the award of any
Degree, Diploma, Associate ship or other similar title of any other university or
institute.

Place: IRINJALAKUDA ASWIN MS

Date: 29/03/2021 CCASBBAR21

3
 ACKNOWLEDGEMENT

I would like to take the opportunity to express my sincere gratitude to all people
who have helped me with sound advice and able guidance.

Above all, I express my eternal gratitude to the Lord Almighty under whose divine
guidance; I have been able to complete this work successfully.

I would like to express my sincere gratitude to Rev.Dr. Jolly Andrews, Principal-

in-Charge, Christ College Irinjalakuda for providing various facilities.

I am thankful to Prof. C.L.Baby John, Co-ordinator of Management Studies and

Mr. Aslam P S, Assistant Professor for providing proper help and encouragement
in the preparation of this report.

I express my sincere gratitude to Mrs Siji Paul V, Assistant Professor, whose

guidance and support throughout the training period helped me to complete this
work successfully.

I would like to express my gratitude to all the faculties of the Department for their
interest and cooperation in this regard.

I extend my hearty gratitude to the librarian and other library staffs of my college
for their wholehearted cooperation.

I express my sincere thanks to my friends and family for their support in

completing this report successfully.

4
 TABLE OF CONTENTS

CHAPTER TITLE PAGE

NO

CHAPTER 1 INTRODUCTION 1 -4

CHAPTER 2 REVIEW OF LITERATURE

5-7
CHAPTER 3 THEORETICAL FRAMEWORK 8 - 16

CHAPTER 4 DATA ANALYSIS AND 17 -33

INTERPRETATION
CHAPTER 5 FINDINGS, SUGGESTIONS AND 33 -40
CONCLUSION
BIBLIOGRAPHY
APPENDIX

5
 LIST OF TABLES

TABLE NO. TITLE PAGE

NO.
4.1 Age wise classification of respondents 17

4.2 Gender wise classification of respondents 18

4.3 Category classification of respondents 19

4.4 Monthly income of respondents 20
4.5 Possession of land of respondents 21
4.6 Size of land of respondents 22
4.7 Bank group wise classification of respondents 23
4.8 Transactional banking service utilized by the 24
respondents
4.9 Loan scheme utilized by the respondents 25

4.10 Source of funds for cultivation of the respondents 26

4.11 Credit/Loan service of respondents 27
4.12 Ability to pay interest 28
4.13 How the respondents learned about the scheme 29
4.14 Satisfaction to government provided facilities 30
4.15 Satisfaction to credit policies 31

4.16 Technical knowledge of farmers 32

4.17 Agricultural insurance of respondents 33

6
 LIST OF FIGURES

TABLE NO. TITLE PAGE

NO.
4.1 Age wise classification of respondents 17

4.2 Gender wise classification of respondents 18

4.3 Category classification of respondents 19

4.4 Monthly income of respondents 20
4.5 Possession of land of respondents 21
4.6 Size of land of respondents 22
4.7 Bank group wise classification of respondents 23
4.8 Transactional banking service utilized by the 24
respondents
4.9 Loan scheme utilized by the respondents 25

4.10 Source of funds for cultivation of the respondents 26

4.11 Credit/Loan service of respondents 27
4.12 Ability to pay interest 28
4.13 How the respondents learned about the scheme 29
4.14 Satisfaction to government provided facilities 30
4.15 Satisfaction to credit policies 31

4.16 Technical knowledge of farmers 32

4.17 Agricultural insurance of respondents 33

7
 CHAPTER 1
INTRODUCTION

8
1.1 Introduction

Agriculture is the science and art of cultivating plants and livestock. Agriculture
was the key in the development and rise of sedentary human civilization where by
farming or domesticated species created food surplus that enabled people to live in
cities. The history of agriculture began thousands of years ago, pigs, sheep and
cattle were domesticated over thousands of years ago. In modern agronomy,
development of agrochemicals such as pesticides and fertilizers has drastically
increased yields, while causing widespread ecological and environmental
damages. The major agriculture productions can be broadly grouped into food,
Fuel and raw materials. Over one third of the world’s workers are employed in
agricultural sector, second only to the service sector.

Different studies conducted show a positive relationship between agriculture

growth and availability of credit. Broadly, credit in agriculture sector may be
described as short-term loans to meet the input expenses and medium and long-
term loans to facilitate the development of fixed farm assets such as land. Under a
static functioning, the level of input used per hectare of cropped area being
constant, the year to year variation in the amount of credit reflects the changes in
input prices. Under a situation of diminishing returns, however, increasing input
use is required to maintain the same level of output. The supply of credit related to
static production conditions will not contribute to increasing output, although the
withdrawal of it might lead to a decline in output. Under dynamic functions, credit
requirements would rise from year to year even if input prices remain constant.
The growth in credit under such dynamic condition would lead to increased
output. In the same way the investment credit too would lead to an improvement
in the production potential of the farm through the process of net capital
formation.

Agriculture finance empowers poor farmers to increase their wealth and food
production to feed a billion people. This study is conducted to know about the
9
farmer’s choice of agriculture finance with special reference to Mathilakam
panchayat.

1.2 Statement of the problem

This study entitled “The farmers choice of agricultural finance “Makes an attempt
to understand the farmer’s loans, schemes, knowledge, financial positions and
access to adequate, Timely and low cost credit from institutions.

1.3 Scope of the study

The study can be useful to agricultural farmers who are using agricultural loans
and other schemes as they might come to know about the important source of
resources. The present study is conducted among farmers of Mathilakam
panchayat.

1.4 Objectives of the study

o To know about the choice of agricultural finance among the farmers, with
special reference to Mathilakam panchayat.
o To know the knowledge level of agriculture finance among farmers
o To know the satisfaction level of farmers about the lending policies

1.5 Research design

For this study questionnaire method is used for collecting data from farmers, using
a questionnaire, from sample size of 50.

1.5.1 Nature of study

The study is descriptive in nature

1.5.2 Nature of data

Primary and secondary data is used

10
1.5.3 Source of data

The primary data is collected through a structured questionnaire and discussions

with borrowers of agricultural finance and secondary data is collected through
articles and different websites.

1.6 Sample design

1.6.1 Nature of population

The study is conducted among farmers, here the population is infinite.

1.6.2 Sample unit

Samples were collected from farmers of Mathilakam panchayat, the sample unit
here is farmers.

1.6.3 Method of sampling

Convenient sampling technique is used to collect data from farmers.

1.6.4 Size of sample

Samples are collected from 50 farmers.

1.7 Tools for analysis

Various statistical tools like scales, tables, graphs and diagrams were used for
analysis and interpretation of data.

1.8 Limitation of study

• There were difficulties in collection of samples due to the corona virus

pandemic.

• The sample size is limited to 50 only.

11
1.9 CHAPTERISATION:

(Chapter 1): Introduction, statement of the problem, research design, sample

design, tools for analysis.

(chapter2): Review of literature

(Chapter 3): Theoretical framework

(chapter4): Data analysis

(chapter5): Findings, Suggestions, Conclusion.

12
 CHAPTER 2
REVIEW OF LITERATURE

13
2.1 Empirical review

Boucher and Guirkinger (2007) said that agricultural Credit is defined as a type
of financing used to provide funding for agricultural producers. The rural credit
market in general is comprised of institutional credit agencies, private
moneylenders, landlords (who include money-lending rich farmers), retail shops
and grain traders. Interest rates not only vary between lenders and regions but they
vary according to purpose for which the loan is sought. As a result, an informal
loan may be demanded both by those who cannot post the collateral required by
the formal sector and by those who can but are unwilling to do so because of the
associated risk. The ensuing collateral reduction, however, comes at a cost as
informal lenders expend resources on monitoring that must be recovered via a
higher interest.

Basu(1997) Said that the rural credit market in general is compared of institutional
credit agencies, private money lenders, landlords including money-lending rich
farmers, retail shops and grains. Interest rate not only varies between, lenders and
regions but they vary according to the purpose for which the loan is sought.

Park, (2003) Posited that lack of credit is a barrier to investment and income
growth of poor households in developing countries of the world. Access to credit
is an antidote to poverty reduction among rural poor. Access to credit enhances the
adoption of new and riskier techniques that will improvefarmers level of income
and hence, alleviate their poverty. Additional capital as a result of access to credit
enhances the level of households, productive assets, and also their expenditure and
it is that expenditure that lead to improvement in consumption (food and nonfood)
of the rural poor (ESWARAN et al, 1990 and Haddad et al 1997).

Mansuri (2007),Says that the informal market is often characterized by

heterogeneous non-specialist for whom money lending is a means of increasing

14
returns to other economic activities. However, not all information’s lenders care
equally placed in lending to all rural households. In particular, occupational
differences among lenders generate systematic differences in the cost and
reliability of the information that each lender can acquire, and in the lenders
enforcement capacity which respect to particular types of borrowers.

Meyer(2007) theold rural finance paradigmof the 1960s and 1970s was based on
public authority’s desire to facilities access to rural finance. The objective was to
promote agricultural development by modernizing agricultural. The most common
approaches involved direct government intervention via state owned development
banks and direct donor intervention in credit markets with favorable terms and
conditions like soft interest or lenient guarantees. However, this system was costly
and unsuitable, due to poor repayment, and ultimately did not have the desired
effect on the development of agricultural production.

The National Commission on Agriculture (2008) examined the requirements of

institutional credit 18 for covering the new agricultural strategy of agricultural
development and all aspects of rural development including production,
marketing, processing and transportation. The commission stressed greater
involvement of commercial banks in financing agricultural development. It was
suggested that the share of commercial banks in agricultural advances should
increase from 8.8% in 1974 to 15% in 1998 and a greater weight age must be
given to the needs of small and marginal farmers and provision of credit to them
on preference terms in respect of both interest charges and quantum of advances to
enable them to modernize agriculture.

Dutta and Busak (2008), Suggested that co-operative banks should improve their
recovery performance, adopt new system of computerized monitoring of loans,
implement proper prudential norms and organize regular workshops to with stand
in the competitive banking environment.

15
Anjani Kumar, KM Singh and Shradhangali Sinha (2010) foundthat although
the institutional credit to agriculture increased continually, money lenders still are
the main source of credit to agriculture. The found that the institutional credit
given to agriculture increased during last four decades. The commercial bank has
reminded the most important source of institutional credit but the declining share
of investment credit hampered the growth of agriculture. They also found that the
socio demographic factors like family size, cast, gender and occupation and
educational level of farmers affected the use of institutional credit. Hence, they
remarked that the simplification of credit procedures is essential for the better
access to credit.

HarikeshMaurya(2015),Identified the beneficiaries of co-operative banks

agricultural credit and an attempt is also made to examine farmer’s attitudes. He
found that across the size groups, the maximum beneficiaries are the medium
farmers.

V Balakrishna Naidu, A Siva Sangar and P Surya Kumar (2013), Stated that
about 66% population in India depends on agriculture. Therefore, agricultural
credit is an essential input for higher agricultural productivity. Agricultural
production and productivity should improve to produce food for all population.
Together with agricultural credit, other factors like seed quality, minimum support
prices, rainfall, irrigation and environment consideration were also considered
significant in improving agricultural productivity. Because of the misuse of credit,
it was very difficult to estimate the exact use of credit for agricultural purpose.

16
 CHAPTER 3
THEORETICAL FRAMEWORK

17
3.1 Farmer’s choice of agriculture finance.

Agriculture finance is the study of financing and liquidity services credit provides
to farm borrowers. It is also considered as the study of those financial
intermediaries who provide loan funds to agriculture and the financial markets in
which these intermediaries obtain their funds. Agriculture finance generally means
studying, examining and analyzing the financing aspects pertaining to farm
business, which is the core sector of the country.

Agriculture finance is the provision of multiple types of services dedicated to

supporting both on and off farm agricultureActivities and business including input
provision production and distribution, wholesale, processing and marketing.

3.2 Features of agricultural finance

• Risk in agriculture

In agricultural sector, a farmer has to face numerous risks and damages due to
various reasons like climatic changes,economic conditions etc., moreover,
commercial banks and insurance companies have very little facilities to calculate
the involved risks in providing credit to them.

• Difficulties in co-operation in agriculture

In agriculture sector there is a very little scope of co-operation. It is so

because,farmers are mostly individualistic and are suspicious of co-operating with
individuals for a common purpose.

• Economic lags in agriculture

In agriculture, there is a very long interval between the initial investment and
payoff, duringthe period when cost is incurred, the demand of agriculture Produce
change upsetting the financial adjustment of the farmers.

18
 • Credit for consumption purpose

Indian farmers require credit not only for production purpose but also for
consumption purposes in the case of crop failure, small farmers need credit which
they spend on consumption requirements. Indian farmers are accustomed to spend
beyond their means on social and religious functions.

• Small size of farm

In India size of farm is very small in comparison of the amount of labor employed
and the extent of the capital invested. There is no control over the yield and the
quality of the produce.

• Lack of proper securities

Large farmers have their own resources which enable them to raise funds, for
farmers with smaller land. It is extremely difficult to raise credit for their needs.

• Complex industries

Agriculture is an industrial complex of varying types of production and marketing

the size of holding and forms of land tenure differ from one area to another.

3.3 Sources of agriculture finance

There are two types of agricultural sources

1. Institutional source
2. Non institutional source
3.3.1 Institutional sources

A) Co-operative societies

❖ Primary agriculture credit society (PACS)

• These are organized at the village level

• These societies advance loans only for productive purpose

19
 • The main objective of a PACS is to raise capital for the purpose of
giving loan.
•
❖ District central co-operative bank
• The co-operative is organized at district level
• The PACS is affiliated to the district central co-operative banks

❖ State co-operative bank

• The DCCB is affiliated to state co-operative banks
• It organizes provision of finance for credit worthy farmers, carry out
banking business and act
B) Commercial banks

• Commercial banks are for providing finance both directly and indirectly
• Direct finance provided for short and medium periods
• Indirect finance refers to advances for distribution of fertilization and other
inputs.
C) Land development banks

• Land development bank were set up in order to provide long term finance
• Previously they were called land mortgage banks
• These bank provide loans for cultivation, Purchasing new lands, digging,
construction and repairing of wells.

D) Regional rural banks

• The regional rural banks were set up in 1975 on the recommendation of

NARASIMHA committee.
• The main objective of RRB is to provide credit and other factors
particularly to the small and marginal farmers, agriculture labors, artisan

20
 and small entrepreneurs, trade commerce, industry and other productive
activities
E) Government loan schemes

• These are both short term as well as long term loan schemes
• The loan is popularly known has “TACCAVI LOANS” which are
generally advanced in terms of natural calamities
• The rate of interest is low. But major source of agriculture finance
f) NABARD

• NABARD was set up as government need an apex institution to extend

support and give guidance to credit institution
• NABARD was set up July 1982 and it took over the function ARDC and
also function of the RBI in relation of co-operative bank
• It is also having to provide facilities to all banks and financial institution
landing to agricultural and rural development
3.3.2. Non institutional sources

A) Traders and commission agents

• Advances loan for productive propose against crop without legal

formalities
• Becomes obligatory for farmers to buy inputs and sell outputs through
them
• They change a rate of interest on the loan and a commission on all sales
and purchases
B) Land lords

Mostly small farmers and tenants depend on landlords for meeting their
production and day to day financial requirement.

21
C) Money lenders

Money lenders are 2 types agriculturist money lender who combine money
lending with farming and professional money lenders whose sole job in money
lending.

3.4Significance of agricultural finance

• Agricultural finance assumed to have vital and significant role in the agro-
economic development of the country, both at macro and micro level.

• It is playing a catalog role in strengthening the form business and the

productivity of scarce resources..

• Use of new technological inputs purchased through credit helps to increase

the agriculture productivity.

• Ascertain in to farm assets and farm supporting infrastructure provide by

large scale financial investment activities result in increased farm income
level leading to increased standard puff living of rural masses.

• Farm finance can also reduce the regional economic imbalances and is
equally good at reducing in their farm asset and wealth variations.

• As agriculture is still traditional and subsistence in nature, agriculture

finance is needed to create the supporting infrastructural for adoption of new
technology.

22
 • Massive investment is needed to carry out major and minor irrigation
projects rural electrocutions, installation of fertilizers and pesticides plants,
execution of agricultural promotional alleviations programs in the country.

3.5 Classification of agricultural finance

• Based on time
• Based on purpose
• Based on security
• lenders classification

3.5.1. Based on time

• Short term loans

These loans are to be repaid within a period of 6 to 18 months. All crop
loans are said to be short-term loans, but the length of repayment period
varies according to the duration of crop. The type of loan requires tomeet
expenses like sowing, fertilizers application, plant production measures,
payment of wages to casual labors etc.

• Medium – term loans

Here the repayment period varies from 18 months to 5 years. These loans
are required for purchasing and implementing electric motors, milt cattle,
sheep and goat etc.
• Long-term loan
These loans fall due for repayment over a long time ranging from 5 years to
more than 20 years. These loans are meant for permanent improvements
like leveling and reclamation of land, construction etc.

23
3.5.2. Based on purpose

• Production loan

These loans are credit given to the farmers for crop production. They are also
called seasonal agriculture operations (SAO) loans short-term loans or crop
loans.

• Investment loan

These are loans give for purchase of equipment the productivity of which is
distributed over than one year. Loans given for tractors, pump set, tube well.

• Marketing loan

These loans are meant to help the farmers in overcoming the distress sales and
to market the produce in a better way. Regulated markets and commercial
banks, based on ware house receipt are lending in marketing loan.

• Consumption loan

Any loan advanced for some purpose other than production is broadly
categories as consumption loan.

3.5.3 Based on security

• Personal security

Under this, borrower himself stands as the guarantor. Loan is advanced on the
farmer’s promissory note. Third party guarantee may or may not be instituted
upon.

• Collateral security

Here the property is pledged to secure loans the movable properties of the
individuals like bonds, fixed deposit, and warehouse receipt.

24
 • Mortgage

As against to collateral security, immovable properties are presented are presented

for security propose.

3.5.4 Lenders classification

• Institutional credit

Here loans are advanced by the institutional agencies by the institutional

agencies like co-operative, commercial bank.

• Non institutional credit

Here the individual’s persons will lend the loansex: loan given by professional and
agricultural money lenders, traders, commission agents, friends

3.6 Merits of agriculture

• Access to future prices of agricultural commodities discovered through a

transparent price discovery process in the commodities exchanges
• Expected future prices of commodities known on advances (a farmer can
plant his crop and sales by looking at prices prevailing in the future market)
• A well organized and well functioned features sensitizes the whole value
chain of the commodity to complete on global level
• Giant manufactures, given a chance, can utilizesthe afford of farmers and
shape in the best possible way. Improving their lives as well has increasing
production on economy. Coloration between agricultural setter and
multinational companies can be beneficial for the county as well has
farmers.

25
3.7 Demerits of agriculture

• Small and fragmented lands holding leads to reducing the product.

• Soil erosion made by water and air that effect the fertility of soil
• Agricultural marketing is not so good
• Inadequate storage facilities lead to wastage of crop.

26
 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

27
 Table 4.1

Showing age wise classification of respondents

Age Score Percentage

Below 30 4 8
30-40 13 26
40-50 13 26
50-60 12 24
Above 60 8 16
TOTAL 50 100%
Source: primary data

From the table 4.1;

It is found that 26% of the respondent belongs to the age group of30-40 & 40-50
and 24% of the respondents belong to the age group 50-60and 8% belong to
theage group below 30 and 16% belongs to the age group above 60.

Figure 4.1

Age wise classification of respondents

30

25

20

15

10

0
below 30 30-40 40-50 50-60 above 60

28
 Table 4.2

Table shows Gender wise classification of respondents

Gender Scores Percentage

male 27 61%

Female 23 39%

TOTAL 50 100%

Source: primary data

From the table 4.2

It is understood that 61% of the respondent are male and 39% of them are female.

Figure 4.2

Gender wise classification

Chart Title

39%

61%

Male Female

29
 Table 4.3

Table shows Category classification of respondents

category scores percentage

APL 12 17

BPL 38 83

TOTAL 50 100%

Source: primary data

From the table 4.3;

It is understood that 17% of the respondents are APL and 83% are BPL.

Figure 4.3

Category classification

Chart Title

17%

83%

APL BPL

30
 Table 4.4

Table shows Monthly income of respondents

Monthly income Scores Percentage

Less than 5000 16 32

5000-10000 16 32

10000-15000 10 20

15000-20000 6 12

More than 20000 2 4

TOTAL 50 100

Source: primary data

Table 4.4 shows that;

32% of the respondents have income less than 5000, 32% have income between
5000 and 10000, 20% have income between 10000 and 15000, 12% of people
have income between 15000 and 20000 and only 4% of the total sample have
income more than 20000.

Figure 4.4

Monthly income

35
30
25
20
15
10
5
0
less than 5000 5000-10000 10000-15000 15000-20000 more than 20000

31
 Table 4.5

Shows Possession of land of respondents

Possession of land scores percentage

Owned 39 78

Lease 5 10

Group 6 12

TOTAL 50 100

Source: primary data

Table 4.5 shows that;

78% of the sample has land owned by them, 10% have leased property and 12%
have property owned by group.

Figure 4.5

Possession of land of respondents

90
80
70
60
50
40
30
20
10
0
owned lease group

32
 Table 4.6

Shows Size of land of respondents

Size of land Scores Percentage

Sub marginal 9 18

Marginal 16 32

Small 25 50

TOTAL 50 100

Source: primary data

Table 4.6 shows size of land of respondents;

Out of 50 respondents small land holders are 50% and 32% own marginal land
18% own sub marginal land.

Figure 4.6

Size of land

60
50
40
30
20
10
0
sub marginal marginal small

33
 Table 4.7

Shows Bank group wise classification of respondents

Bank group Scores Percentage

State bank 9 18
Nationalized bank 12 24
Garmin bank 16 32
Co-operative bank 13 26
Total 50 100
Source: primary data

Table 4.7 shows that;

Bank group wise classification, the percentage of respondent selection were, 24%
nationalized bank and 26% cooperative bank, 18 % state bank and 32%
GRAMMIN banks..

Figure 4.7

Bank group wise classification

35

30

25

20

15

10

0
state bank group national bank grammin bank co-operative bank

34
 Table 4.8

Shows Transactional banking service utilized by respondents

Transaction utilized scores Percentage (30/SCORE)

ATM 50 100
Mobile banking 18 36
Internet banking 20 40
Cheque /DD 38 76
Pension through bank 7 14
Source: primary data

Table 4.8 shows the;

Response of banking service used for transactions of out of 50 respondents,

50%are using ATM and 38% in Cheque/DD and 7% respondents avail pension
through banks and 20% respondents have internet banking and 18% respondents
use mobile banking.

Figure 4.8

Transactional banking service utilized by respondents

Chart Title
120
100
80
60
40
20
0
ATM mobile banking internet banking Cheque/DD Pension throught
bank

35
 Table 4.9

Shows Loan scheme used by respondents

Loan schemes scores percentage

NABARD scheme 12 24

KISAN credit card 5 10

scheme
Other schemes 33 66
TOTAL 50 100
Source: primary data

Table 4.9 show selections of loan schemes;

Out of 50 respondents to 66% chose other schemes 10% respondents chose

KISAN credit card scheme and 24% respondents chose NABARD Scheme.

Figure 4.9

Loan scheme used by respondents

70
60
50
40
30
20
10
0
NABARD scheme Kisan credit card scheme other schemes

36
 Table 4.10

Shows Source of fund for cultivation

Source of fund scores percentage

Owned fund 15 30

Friends/relatives 12 24
Co-operate societies 11 22
Borrowing from 9 18
commercial bank
Other sources 3 6
TOTAL 50 100
Source: primary data

Table 4.10 shows the source of fund used for cultivation;

Out of 50 respondents 22%avail funds from co-operative societies, 24% from

friends or relatives, 18% borrow from commercial bank and 30% use funds owned
by them and lastly 6% respondents choose other sources.

Figure 4.10

Source of fund

35
30
25
20
15
10
5
0
owned fund friends/relatives co-operative borrowing from other sources
societies commercial bank

37
 Table 4.11

Shows Credit/ loan services of respondents

Credit/ loan service Scores percentage

Formal source 9 18
Informal source 21 42
Semi-formal source 20 40
TOTAL 50 100
Source: primary data

Table 4.11 shows that credit loan services

Among out of 50 respondents .42% respondents are using informal sources, 40%
respondents are using semi- formal source and 18% respondents are using formal
source for loan service.

Figure 4.11

Credit loan services

Chart Title
45
40
35
30
25
20
15
10
5
0
informal source informal source semi formal source

38
 Table 4.12

Shows the ability to pay interest regularly

Pay amount regularly scores Percentage

YES 22 44
NO 28 56
TOTAL 50 100
Source: primary data

Table 4.12 shows the regularity of payment of interest;

Out of 50 respondents 44% of respondent’s pay regularly and 56% of respondent’s

doesn’t pay interest regularly.

Figure 4.12

Pay amount regularly

44% YES
56% NO

39
 TABLE 4.13

Shows how the respondents learned about the scheme:

About the scheme scores percentage

Neighbors, friends, 9 18
relatives
Bank 15 30
Politician 2 4
Newspaper/journal 18 36
Other medias 6 12
TOTAL 50 100
Source: primary data

Table 4.13 shows how respondents learned about the scheme;

Out of 50 respondents 30% learned through bank and 36% through newspaper/
journal 18% respondents learned through neighbors and friends, only 4% learned
through politicians and 12% respondents learned through other Medias.

Figure 4.13

Learned about the scheme through

Chart Title
40
30
20
10
0
neighbour, friends, bank polititians newspaper/journals other medias
relatives

40
 Table 4.14

Shows satisfaction towards government provided facilities

Mention scores percentage

Very good 7 14
good 16 32
fair 12 24
poor 8 16
Very poor 7 14
TOTAL 50 100%
Source: primary data

Table 4.14 shows satisfaction to government provided facilities;

Out of 50 respondents 32% claimed it to be good 16% said poor, 24% responded
that it was fair, 14% said the facilities were very good and 14% said the facilities
were very poor.

Figure 4.14

Government provide good facilities

Chart Title
35

30

25

20

15

10

0
very good good fair poor very poor

41
 Table 4.15

Shows Satisfaction to credit policies

Mention scores Percentage

satisfied 6 12
neutral 20 40
dissatisfied 24 48
TOAL 50 100%
Source: primary data

Table 4.15 shows satisfaction to credit policies;

Out of 50 respondents 40% respondents are neutrally satisfied, 48% are

dissatisfied and 12% are satisfied respondents.

Figure 4.15

Satisfied to credit policies

Chart Title
60

50

40

30

20

10

0
satisfied nuetral dissatisfied

42
 Table 4.16

Shows the technical knowledge of the respondents

Mention Scores percentage

YES 13 26
NO 37 74
TOTAL 50 100%
Source: primary data

Table 4.16 shows technical knowledge of farmers;

Out of 50 respondents 74% has NO Technical knowledge and 26% respondents

have technical knowledge

Figure 4.16

Technical knowledge for farmers

26%

YES
NO

74%

43
 Table 4.17

Shows the agriculture insurance of respondents

Mention score percentage

YES 19 38
NO 31 62
TOTAL 50 100
Source: primary data

Table 4.17 show agricultural insurance

Out of 50 respondents 62% has no agricultural insurance and 38% have

agricultural insurance.

Figure 4.17

Agricultural insurance

38% YES
NO
62%

44
 CHAPTER 5
FINDINGS, SUGGESTIONS AND
CONCLUSION

45
5.1 Findings

The important findings of the study are as followers

• Majority respondent age between 30-40 and 40-50

• On the basis gender wise classification majority of respondents are
male.
• Majority of respondents BPL category.
• Most of the farmer’s monthly income turnover is less than 10000.
• This study reveals that most farmers own their land.
• Majority of respondents have small sized land.
• Majority of respondent use Garmin banks.
• Most respondents use ATM facility for their transactions.
• The study says that most of the respondents chose other loan
schemes rather than NABARD scheme or Kisan credit scheme.
• This study reveals that 30% of respondents use fund owned by them
for cultivation.
• Majority of respondents use informal sources for credit.
• 56% of the respondents do not pay interest regularly.
• In this study majority of the respondents learned about loan
schemes through newspaper and journals.
• Most of the respondents have good opinion on of government
provided facilities.
• 48% of the respondents are dissatisfied with the credit policies
• The most of the respondents does not have technical knowledge on
farming.
• The most of farmers do not have an agricultural insurance.

46
5.2 Suggestions

Based on the responses received by the farmers on their schemes, loans, land,
income details to following suggestions can be made.

• The government needs to initiate necessary steps to promote credit in

agricultural sector.
• Farmers should be provided with more technical knowledge and machinery
training to increase production.
• Farmers should be given loans with longer payback periods.
• Banks should provide new and attractive credit facilities to create new
investments in the agricultural sector.

5.3 Conclusion

The study on the topic farmer’s choice of agricultural finance with special
reference to Mathilakam panchayat depict that the farmers have faced many
problems with the current credit policy services and loan distribution. The lack of
technical knowledge has resisted farmers from receiving the benefits of modern
technology. As we know that most Indians are dependent on rice, wheat and other
grains for their daily consumption the importance for improving the quality and
quantity of production is necessary.

The decreasing level of production has drastically affected the life of farmers and
their financial stability is very low, even though agricultural sector is crucial in our
day to day life the workers of this sector are suffering economically and the
amount of people engaged in this activity is decreasing day by day.

47
BIBLIOGRAPHY

48
Journals

• Anjani Kumar, K.N. Singh and Shradhajali Sinha (2010) Institutional

Credit to Agriculture Sector in India: Status, Performance and
Determinants, Agricultural Economics Research Review, Vol. 23, pp. 253-
264.
• Balakrishnama Naidu. V and Siva Sankar. A (2007). An Econometric
Analysis of Cotton Crop: A Study in Guntur District of Andhra Pradesh,
The ICFAI Journal of Agricultural Economics, Vol. IV, No. 2.
• Boucher, S. and C. Guirkinger (2007). Risk, wealth, and sectoral choice in
rural credit markets. American Journal of Agricultural Economics Vol. 89,
Iss. 4, pp. 991-1004. Agriculture loan with low interest and security Special
government attention is needed. Farmer’s should have independent right to
decide the market value of crops. Farmer’s should be encouraged to use the
organic farming Dr. J. RamolaPremalatha and Sonu
• Basu, S. (1997). Why institutional credit agencies are reluctant to lend to
the rural poor: A theoretical analysis of the Indian rural credit market.
World Development Vol. 25, No.2, pp. 267-280.
• Dutta Uttam and Basak Amit (2008), Appraisal of financial performance of
urban cooperative banks-a case study. The Management Accountant, case
study, pp.170-174.
• Eswaran, Mukesh and A. Kotwal (1990). Implications of credit constraints
for risk behaviour in less developed economics, Oxford Economic Papers,
Vol.42, pp. 437 – 482.
• HarikeshMaurya (2015), Role of Co-Operative Bank in Agriculture: A
Case Study of District Mohali, Punjab, International Journal of scientific
research and management Vol 3(1), pp. 1922-30.
• Mansuri, G. (2007). Credit layering in informal financial markets. Journal
of Development Economics, Vol.84, No.2, pp. 715-730.

49
 • Park, A.C Ren and S. Wang (2003): Micro-finance, poverty alleviation
reform in China. Workshop on rural finance and credit infrastructure in
china, Paris, France.
• Rejoice Solomon, Role of Microfinance in Women Empowerment: An
Empirical Study in AlwarDistrict, Rajasthan, India. International Journal of
Management, 9 (2), 2018, pp. 31 – 36.
• ParishwangPiyush, HimanshuNegi and Navneet Singh, Study of Housing
Finance in India with reference to HDFC and LIC Housing Finance Ltd .
International Journal of Management, 7 (3), 2016, pp. 39 – 49.

Web sites

• http:// iame.com
• http:// academia.edu.com
• www.Rural finance and investment
• www.agricultural.gov.in

50
APPENDIX

51
 A study on Farmer’s choice of agricultural finance with special reference to
Mathilakam panchayat

Questionnaire

1. Name:

2. Age: Below 30 30-40 40-50 50-60 Above 60

3. Gender: Male Female Others

4. Category: APL BPL

5. Monthly Income:

Less than 5000 5000-10000 10000-15000 15000-20000

More than 20000

6. Possession of land: Owned Lease Group

7. Mention your size of land holding: Sub marginal marginal Small

8. Name the bank group which you are associated:

No Bank Group Put tick

1 State bank

2 Nationalize bank

3 GRAMMIN bank

4 Co-operative bank

9. Specified the transaction service utilized through banks:

No Transaction utilized Put tick

1 ATM

52
 2 Mobile banking

3 Internet banking

4 Cheque / DD

5 Pension through bank

10. The scheme under which your loan is taken: NABARD KISAN credit card
scheme other schemes

11. Source of fund for cultivation: Owned fund Friends /Relatives Co-
operative society Borrowings from commercial bank other sources

12. Details of source of credit /Loan services: Formal source Informal

source Semi formal source

13. Are you able to pay the interest regularly? Yes No

14. How did you come to know about the schemes? Neighbors, Friends Relatives
Bank Politicians Newspaper /Journals other medias

15. How were the facilities provided by the government institutes? : Very good
Good Fair Poor Very poor

16. Are you satisfied with credit policies available? Satisfied Neutral
Dissatisfied

17. Have you had any technical training on farming? Yes No

18. Do you have agricultural insurance? Yes No

53