Women cultivators’ Access to institutional credit and Effect on Agricultural Productivity- Profitability: A case study in West bengal

Abstract

Women are integral part of food production process. Their importance in agriculture is paramount and their roles in agriculture vary from performing as farmers with legal land right (de jure female farmers) to working as family farm labour in spouses' land (de facto female farmers) to operating purely as agricultural labourer in farm wage market. With study area as west Bengal and sample size of 150 comprising de jure female farmers, de facto female farmers and a control group of male farmers 100 in each category chosen through 'Random Sampling Method', analysis on access to institutional farm credit and its effect on farm productivity and profitability reveal that However, unlike the male counterparts, the prime problem confronted by the female farmers is access to credit. They are resourcepoor and lack adequate collateral assets to mortgage and procure loan. Inadequate collateral security to place as mortgage to formal-informal loaner institutions coupled with poor repayment capacity, owing to low financial status form formidable bottleneck in borrowing loans. For illiterate and vulnerable groups like women farmers institutional loan by form of Kisan Credit Card is a good option because it has additional advantages over other formal loans. However, it also sees limited accessibility because off unnecessary prolonged government procedure to obtain it. As a result they have to seek credit from private moneylenders even being aware that the informal moneylenders charge exorbitant interest rates. On consequence, they suffer from low farm productivity and thereby profitability, well below district average. On the other hand, de facto female farmers performed better both in terms of yield and economic returns per unit of land over the de jure. Such families received remittances from the migrated head of the household and the land owner. So such families managed better household monthly income, possessed more assets to mortgage and concomitantly had higher credit worthiness to their benefit. As a result, more than 80 percent of the de facto female farmers households resorted to crop loan, the male head and the land owner helping in this regard by making himself available for successful completion of the loan borrowing process. More importantly, more than 60 percent of such families derived advantage of formal crop loan characterized by highly subsidized interest rate. However, of the three groups male farmers outshone in every respect which is reflected in the level of yield and economic return per unit area. Interestingly, this coincides with the fact that, as high as 94 percent male farmers had taken crop loan to meet timely input cost, effectively instrumental in augmenting farm productivity and thereby profitability and 65 percent of it was borrowing from formal sources. In concise, higher the amount of crop loan borrowed for timely availability of farm inputs with preferable source being formal banks, more is the assurance of greater yield per unit of land.