IDEAS home Printed from https://ideas.repec.org/p/sch/wpaper/304.html
   My bibliography  Save this paper

Identifying credit constrained farmers: An alternative approach

Author

Listed:
  • Bhattacharjee, Manojit
  • Rajeev, Meenakshi

    (Institute for Social and Economic Change)

Abstract

In this paper, we offer an alternative methodology to detect credit constrained households among farmers and seek to identify the determinants of the same. In order to detect credit constrained households we use the marginal approach to arrive at the optimal expenditure requirement for production for each household, and if expenditure of a household is found less than the optimal level , we consider that household as credit constrained. After classifying a household as constrained or otherwise, the paper then seeks to identify the determinants by undertaking a probit regression analysis. Interestingly, the empirical exercise shows that the likelihood of being constrained is higher for a person better endowed in terms of level of education and economic resources. Indeed the optimal level of output per unit of land for a better endowed person is much higher due to his having access to cheaper formal sector loan and thereby facing lower marginal cost of production. This observation is also valid for the higher social category of households (general category) vis-a-vis other classes. Thus, differences in sources of loan make significant difference in the level of demand for credit and in turn the rationing faced by the households

Suggested Citation

  • Bhattacharjee, Manojit & Rajeev, Meenakshi, 2013. "Identifying credit constrained farmers: An alternative approach," Working Papers 304, Institute for Social and Economic Change, Bangalore.
  • Handle: RePEc:sch:wpaper:304
    as

    Download full text from publisher

    File URL: http://www.isec.ac.in/WP%20304%20-%20Manojit%20Bhattacharjee%20and%20Meenakshi%20Rajeev.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Agriculture; Agricutural credit;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sch:wpaper:304. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: B B Chand (email available below). General contact details of provider: https://edirc.repec.org/data/iseccin.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.