1.1 Agriculture Credit:
Credit plays an important role in development. It capitalizes farmers and entrepreneurs to undertake new investments or adopt new technologies. It helps smooth consumption by providing working capital and reduces poverty in the process. Both formal and informal lenders are active in rural credit market (Adams Fitchett 1992; Aleem 1990; Ghate 1992; Hussain and Demaine 1992). Collateral-free lending, proximity, timely delivery and flexibility in loan transactions are some of the attractive features of informal credit. Unlike formal finance, informal finance may not be as conducive to development because: (i) it is expensive, (ii) it is short-term and largely used for consumption and (iii) it is not large enough to spur investment and growth.
Despite the limitations of informal finance, many governments have attempted in the past to develop alternative financial institutions to provide credit to farmers and other rural producers. Many such attempts have failed not only in delivering credit to target households but also in promoting a viable credit delivery system. High covariate risk of agricultural production (Binswanger and Rosenzweing 1986), the asymmetric information and lack of enforcement of loan contracts (Hoff and Stiglitz 1990) 1
With the dismal picture of state-owned rural finance organizations, micro-finance nongovernmental institutions are growing to meet the credit needs of small producers in many countries. Reports indicate that they now meet the credit demand of 8-10 million people in Africa, Asia, and Latin America.4 Many of these organizations are subsidized not for high loan default costs but for higher transaction costs associated with group-based lending and other social intermediation cost...
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... productivity in agriculture sector. Agriculture sector is also a backbone of any agrarian country. By this type of research, we can easily analyze the facts and figure that vary by changing our policies regarding agriculture and credit in this sector.
Objective of the study:
• The main objectives of this study are mentioned as under:
• To analyze the growth level and expenditure patterns of institutional credit
• To evaluate the contribution of institutional credit in agriculture income
• To propose a policy measures to be considered by policy makers in future to bring a good change
• To try to remove or overcome the institutional credit constraints to improve productivity
• To provide a active platform for agriculturists to be a backbone for their country
• To study the impact of agricultural credit on farm productivity and income of farmers in the research area
Agriculture plays an enormous part in having a functioning society. The farming fields in the
Corn subsides began around the time of the Great Depression, which was intended to save the American farmer. Now the subsidies are destroying the very thing they set out to protect. Corn subsidies have grown into an over-burdensome crutch that enables affluent growers and financial institutions to thrive at the expense of taxpayers and local farmers. The subsidies allow farmers to overproduce corn in an effort to artificially maintain low prices.
Policy in my perspective illustrates as a decision making, planning and or action taken to achieve a certain specific goal within our society. According to Longest B. (2010), his definition stated in his text book states that a policy is defined as ” authoritative decisions made in the legislative, executive, or judicial branches of government that are intended to direct or influence the actions, behaviors, or decisions of others.” In developing a policy, certain steps need to be taken in act to implement the policy. The crucial steps in implementing a policy are: recognizing the problem, agenda setting, formulating the policy, and finally implementing the policy (N.A., 2015).
To really begin to understand this complex topic a person really needs to understand the basics of agricultural subsidizing. A subsidy is defined as a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public (Mish, 2003). More specifically, in the agricultural industry the government provides financial assistance to producers in the farm industry in order to prevent decline in production. The government does this by providing financial assistance to farmers and by managing the cost and supply of certain commodities. There a few reasons for this. One reason is to provide assistance to family sized farm owners who have trouble competing with commercial farms. This is supposed to maintain an efficient market balance. Another reason is to control the prices of commodities and keep the global food prices low. There are two main ways that payments are made. The payments may be made directly based on historical cropping patterns on a fixed number of acres. Or they can also be made depending on current market prices. Farmer’s may be guaranteed...
Agriculture is a tough field to enter. Farming is no ordinary profession, nor is it cheap. With farming, comes many risks - some even life threatening. As with any other profession, equipment is needed to perform the job effectively. In this field, the equipment is very costly. The prices of the equipment, chemicals, and seed are increasing whereas the prices of the crop are steady decreasing. How are farmers supposed to make a substantial income when the prices are overwhelming? Can the government not allow a set income for farmers each year, in addition to their profit?
In Genesis 1:29, God said, “I give you every seed-bearing plant on the face of the whole earth and every tree that has fruit with seed in it. They will be yours for food.” From the beginning God has given us food for life. Plants, meats, trees, and fruits are offered to us as a means of sustenance from the very same God who made them long ago.
Microcredit can be defined as small loans, or microloans, for people around the world in extreme poverty to help spur entrepreneurship. The issue of microcredit is extremely important in the world’s economy. Poverty alleviation and economic development are the primary goals of microcredit programs, that is why they began in the developing countries of Asia and Latin America, economist Muhammad Yunus and his Grameen Bank in Bangladesh are credited of pioneering this financial innovation (Smith, Thurman, 2007). After acquiring a loan, impoverished people get involved in self-employment projects that help them to start a business and begin generating income and in many cases leave poverty. Microcredit offers loans to poor people without requesting any financial history from them. These loans help to improve the quality of life of individuals and communities through commitment. In recent years, the idea of giving small loans to poor people became the darling of the development world, giving a way to propel even the poorest people into better lives (Jolis, 2011).
As agriculture has become more intensive, farmers have become capable of producing higher yields using less labour and less land. Growth of the agriculture has not, however, been an unmixed blessing. It, like every other thing, has its pros and cons. Topsoil depletion, groundwater contamination, the decline of family farms, continued neglect of the living and working conditions for farm labourers, increasing costs of production, and the disintegration of economic and social conditions in rural communities. These are the cons of the new improved agriculture.
A recent cross-country report presented by authors Rafael La Porta and Andrei Shleifer that appeared in the Brookings Papers on August 2008 aims to improve the understanding of the relationship between economic development and the informal economy. The report distinguishes between three alternative views of the role of informal economy in development. The Romantic View: According to this view unofficial firms are either actually or potentially extremely productive, and are held back by government taxes and regulations, as well as by lack of secure property rights and of access to finance. Pending the necessary legal reforms “four billion people around the world are robbed of the chance to better their lives and climb out of poverty, because they are excluded from the rule of law” (United Nations, 2008, page 1). If the barriers to officialdom are lowered and capital is supplied through micro finance, unofficial firms will register, borrow, take advantage of other benefits of official status, and by doing so expand and spark economic growth. The key aspect of this optimistic view is that unofficial firms are fundamentally similar to the official ones, but kept down by policy. In particular, unofficial firms should look similar to official firms with respect to characteristics not affected by government policies, such as the characteristics of entrepreneurs (e.
Intensive agriculture has large manufacturing inputs, including the use of chemical pesticides, herbicides, fertilizers, selective breeding, research new varieties and a high degree of mechanization. Output products used primarily commercial purposes, as goods sold on the market or export. The activities on the intensive agricultural production is an effort to find ways to source the highest financial income from grain, products made from grain or livestock .......
Most poor people manage to mobilize resources to develop their enterprises and their dwellings slowly over time. Financial services could enable the poor to leverage their initiative, accelerating the process of building incomes, assets and economic security. However, conventional financial institutions seldom lend down-market to serve the needs of low-income families and women-headed households. They are very often denied access to credit for any purpose, making the discussion of the level of interest rate and other terms of finance irrelevant. Therefore, the fundamental problem is not so much of unaffordable terms of loan but rather of the lack of access to credit itself.
The first and arguably most common effect of poverty on society is its financial impact (Veritta, 2008). In many of the societies that experienced significantly high levels of poverty, debt was increasingly common, and especially debt accrued from moneylenders (Hatcher, 2016). For many individuals living in poverty, access to financial services such as banking is often stifled and rudimentary, making it difficult for such individuals to access self-improvement loans at standard and fair rates (Yoshikawa, Aber, & Beardslee, 2012). For these individuals, moneylenders are the best option available, which results in them paying exorbitant interest rates. The interconnection between poverty and finance, however, is cyclic in nature. The lack of finances or access to financial services causes poverty, which in turn causes an isolation of individuals from finances and financial services (Hickey & du Toit, 2013). This makes poverty a fairly complex problem to
...earch and extension, rural infrastructure, and market access for small farmers. Rural investments have been sorely neglected in recent decades, and now is the time to reverse this trend. Farmers in many developing countries are operating in an environment of inadequate infrastructure like roads, electricity, and communications; poor soils; lack of storage and processing capacity; and little or no access to agricultural technologies that could increase their profits and improve their livelihoods. Recent unrest over food prices in a number of countries may tempt policymakers to put the interests of urban consumers over those of rural people, including farmers, but this approach would be shortsighted and counterproductive. Given the scale of investment needed, aid donors should also expand development assistance to agriculture, rural services, and science and technology.
The backbone of a stable nation, socially and politically, is agriculture. Agriculture is the largest sector that provides a nation with food and employment. Agriculture is currently being affected by climate change and at the same time it is also a contributor to climate change. The drastic elevations in climate change started from the mid to late 20th century and they have been increasing since then (Boisvenue & Running 2006). Climate change is affecting agriculture by interfering with the efficiency of crop production. Agriculture is facing droughts, flooding, sea level elevations, natural disasters, and health hazards for employees. All of these exponents lead to crop failure that creates famines and food prices to rise. On the other side, agriculture is also contributing to climate change through their output of greenhouse gas emissions and carbon footprints. These are caused by the activities that agriculture engages with such as breeding of livestock, ploughing of fields, deforestation, and the use of pesticides and other agrochemicals. Climate change affects countries differently, mainly due to their ability to adapt and their geographical location. Canada and Russia benefit from the changes in climate while Sudan and Bangladesh are affected negatively, struggling to adapt. Agriculture and climate change are interrelated processes that exist mutually making it harder to reduce one without affecting the other.