Agricultural Economics Research Review
Year : 2012, Volume : 25, Issue : conf
First page : ( 557) Last page : ( 557)
Print ISSN : 0971-3441. Online ISSN : 0974-0279.

Effect of Formal Credit on the Agricultural Output in Jammu and Kashmir using Generalized Moment of Methods

Kachroo Jyoti, Iqbal Mudasir, Sehar Huma, Kachroo Dileep

Division of Agronomy, FSR Centre, SKUAST-Jammu, Jammu & Kashmir

Online published on 9 October, 2012.

Abstract

The role of direct and indirect credit in agricultural production has been examined by taking care of the disparities in agriculture, credit disbursement and production at the district level using Dynamic Panel Data Analysis with instrumental variables using Arellano-Bond Regression in Jammu and Kashmir. All the 14 districts (districts before partitioning) were included in the analysis conducted for the period from 1996 to 2005. All the variables were standardized using population size of the state obtained from the data of 2001 population census. The analysis has suggested that the number of accounts of direct and total credit has a positive significant impact on agricultural output, but with a year lag with coefficients of 4.070 and 4.188 having standard errors of 1.416 and 1.317, respectively. The indirect credit amount also has s positive and statistically significant impact on agricultural output with the lag year with coefficients of 0.114 and standard error of 0.039. These results have revealed that even though the informal credit plays an important role in agricultural production, particularly in the case of marginal and small farmers and there are several gaps in the present institutional credit delivery system, formal agriculture credit still plays a critical role in supporting agricultural production in India.

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Keywords

Agricultural output, formal credit, generalized moment of methods, Jammu & Kashmir.

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