Institutional Credit for Dairy Farming in Karanataka, India
An Economic Analysis
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With 112.5 mil.t of production in 2009-10, India remains number one milk producer in the world. This sector has been set the target of 5% growth for the period 2007-12 in order to achieve over all agricultural growth of 4%. However, growth rate of this sector has been hovering around 3.7% during 2007-10 due to stagnation in the productivity of dairy aimals. To increase productivity, it is imperative to increase investment. Since, farmers in India are resource poor, lacking own capital to reinvest in dairying, there is a need to provide institutional credit. With this background the present stu...
With 112.5 mil.t of production in 2009-10, India remains number one milk producer in the world. This sector has been set the target of 5% growth for the period 2007-12 in order to achieve over all agricultural growth of 4%. However, growth rate of this sector has been hovering around 3.7% during 2007-10 due to stagnation in the productivity of dairy aimals. To increase productivity, it is imperative to increase investment. Since, farmers in India are resource poor, lacking own capital to reinvest in dairying, there is a need to provide institutional credit. With this background the present study was conducted in a major state of India. Study found that despite significant contribution of this sector, credit alloted was only 1% of the agricultural credit. Repayment was found to be far lower than crop sector. Requirement of credit was found to be higher for marginal and land less farmers. Study of utilisation pattern revealed that only 36% of dairy credit was used for target activity. Discriminant analysis showed that higher percentage of earning adults in the family, higher income from dairy contributed towards lower repayment.
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