Scribd
Upload
348 views

Sources of Agricultural Credit

1) Various sources of agricultural credit are discussed, including non-institutional sources like relatives, friends, and local shopkeepers who provide short-term loans, and institutional sources like government taccavi loans, agricultural banks, commercial banks, and cooperative societies. 2) Problems obtaining agricultural credit are high interest rates, complicated application processes, delays in loan disbursement, and loans only being available to large landowners who can provide collateral while small farmers lack access. 3) Green revolution involved introducing high-yielding varieties of crops, increased fertilizer and pesticide use, new farming machinery, and support prices to increase agricultural production and farmer incomes.

Uploaded by

Ghalib Hussain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
348 views

Sources of Agricultural Credit

1) Various sources of agricultural credit are discussed, including non-institutional sources like relatives, friends, and local shopkeepers who provide short-term loans, and institutional sources like government taccavi loans, agricultural banks, commercial banks, and cooperative societies. 2) Problems obtaining agricultural credit are high interest rates, complicated application processes, delays in loan disbursement, and loans only being available to large landowners who can provide collateral while small farmers lack access. 3) Green revolution involved introducing high-yielding varieties of crops, increased fertilizer and pesticide use, new farming machinery, and support prices to increase agricultural production and farmer incomes.

Uploaded by

Ghalib Hussain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
You are on page 1/ 4

Chapter – 3 Agricultural Development

Q. Discuss various sources of agricultural credit.

SOURCES OF AGRICULTURAL CREDIT

Non-Institutional sources
1 Relatives
2 Friends
3 Local shopkeepers
4 Commission Agents

Under these source moneylenders, relatives, friends, shopkeepers and commission agents
provide short-term loan to the farmer, which is repaid after the harvest. Moneylenders
charge very high rate of interest. Commission agents know the farmers very well and do not
demand much security for loans advanced by them. Credit available from these sources is
not sufficient enough for the requirement of agricultural development.

Institutional sources
1 Taccavi Govt. Loans
2 Agricultural Bank
3 Commercial Banks
4 Cooperative Society

1. TACCAVI (GOVT.) LOANS


Taccavi loans are granted by Provincial Revenue Department to meet the emergency
requirement such as floods, earthquakes, famines etc. These loans are provided at a very
low interest rate. The Credit Enquiry Commission had recommended that (1) the amount
advanced should be sufficient for the purpose it is granted and an attempt must be made to
supervise the use of credit (2) delay in the grant of Taccavi may be minimized (3) and the
recovery period should be minimized. This source of credit has now become very
insignificant.

2. COMMERCIAL BANKS
All commercial banks of Pakistan provide credit facilities for short and medium terms for
dairy farming, tube-wells, tractors and other inputs. The loans are given under supervised
credit scheme as well as outside the supervised credit scheme.

3. AGRICULTURAL CREDIT COOPERATIVE SOCIETIES


Agricultural Credit cooperative societies established in rural areas also provide credit
facilities to farmers. These societies obtain loans from Provincial Cooperative Banks,
whereas provincial cooperative banks obtain loans from Federal Cooperative Bank. As per
need of credit, cooperative banks are very few and their credit facilities are not up to the
requirement.
PROBLEMS OF AGRICULTURAL CREDIT
1 Loan not available to small farmers
2 Complicated procedure
3 Delay in actual payment
4 High rate of interest
5 Repayments of loans are not made
6 Loan only for few purposes

Agricultural credit facilities are generally availed by big landlords. These people are
influential and can provide securities. Poor farmers who are in great number who actually
need loans have no contacts and cannot provide securities; therefore credit facilities are not
extended to them. Loan advancing procedure is complicated. Farmers are illiterate and
cannot fulfill credit formalities. Even if commercial banks or other institutions sanction
loan, it takes much time for actual payment of the loan. The interest rates are very high. The
loans sanctioned to big landlords are not being repaid to commercial banks; ZTBL and other
institutions cannot do any thing against these influential landlords. Lastly loans are generally
given for the purchase of fertilizers, seeds, tube wells and trolley etc.
Q. What is meant by Green Revolution?
Ans: Green Revolution was based on the idea of agricultural revolution. Green revolution in
fact started with the introduction of high yield variety (HYV) of wheat seed by Dr. Borlaug in
1950. Dr. Borlaug was of the view that man should not entirely depend upon Nature for the
production of agricultural goods. The technological breakthrough in evolving seeds of high
yielding varieties tied with the use of fertilizers and pesticides brought a revolution in
agricultural output which is known as Green Revolution. Green Revolution thus is the break
through or remarkable increase in the quantity and quality of agricultural output through the
institutional and technological reforms.
FACTORS RESPONSIBLE FOR GREEN REVOLUTION:
There are several factors which are responsible for break-through in agricultural
production. These factors mutually support each other in ushering the green revolution. The
package of factors in brief are as follows:
1. MIRACLE SEEDS: The primary factor which brought agricultural revolution is the
introduction of high yielding variety, (HYV) seeds. The use of new variety of seeds has very
much increased the agricultural yields per hectare.
2. AGRICULTURAL RESEARCH: The agricultural research on higher yielding plant varieties,
better methods of controlling insects and diseases have resulted in higher production outputs.
3. FERTILIZER: The increased use of chemical fertilizer is now playing a key role in raising
the agricultural production.
4. MULTIPLE CROPPING: Due to new seeds maturing early, it has now become possible to
get three or even four crops instead of one or two from the same piece of land in a year.
5. MODERN MACHINERY: The farmers are gradually replacing the traditional cultivation by
the modern machinery like tractors, thrashers harvesters, tube wells etc. The time saving use
of modern machinery in agricultural sector has made it possible to sow, grow and harvest crops
in the shortest possible period of time.
6. SUPPORT PRICES: The new or improved technology increases agricultural production and
reduces the cost per unit of output. In order to sustain agricultural progress and keep the prices
of agricultural products profitable to the farmers, the government of each country offers
support prices to the growers so that agriculture creates potential for higher real income to the
producers.
7. PROCESSING, STORAGE AND MARKETING FACILITIES: The processing, storage
and marketing facilities have been now greatly improved and extended in almost all the
countries of the world. The increased agricultural production is put to profitable use. The
provision of these facilities brings facility in the prices of agricultural goods and ensures
reasonable return to the growers.
8. CREDIT FACILITIES: Availability of institutional agricultural credit on time to the
farming community enables it to carry out the agricultural operations efficiently.
9. INSTITUTIONAL CHANGES: Green revolution is carried out more effectively and
efficiently by institutional changes like land reforms, flow of market information etc. These are
also adopted along with bio chemical technology.

You might also like