Farmers’ Behaviour towards Agricultural Credit in Tiruppur District

Abstract

Agriculture is the backbone of India’s economy. It plays a predominant role in deciding the nation’s GDP and in establishing the standard of living of dependants. At present, with advancement in technology and due to urbanization, the role of agriculture is declining. The viability of investment becomes doubtful as most of the farmers are in the poverty line. Agricultural growth is possible only with adequate finance and employment of appropriate technology. The implementation of new techniques also requires finance. The financial requirement of farmers can be set off through the credit facilities provided by various financial institutions. The main aspect of agricultural credit scheme is to provide and ensure supply of required finance to the needy people. So, the financial institutions have to create awareness on the credit facilities available and satisfy the increasing credit needs of the agricultural sector. Further, the beneficiaries of credit facilities may also face certain problems in availing and repayment of credit. In this regard, the present study focuses on farmers’ behavior towards agricultural credit in Tiruppur District. The sample respondents required for the study have been selected by employing multistage random sampling technique. The association between demographic variables and farmers’ behavior towards repayment of agricultural credit was analyzed by using chi-square test and their problems in obtaining credit was examined with Henry Garrett’s Ranking Technique. It was found that there is a significant association between age and repayment of agricultural credit by the farmers. Further, it was noticed that the most important problem faced by the farmers in the study area is the high rate of interest charged by the banks and other financial institutions.