Role of Technology and Credit in Improving Farm Incomes in Rainfed Regions in Andhra Pradesh§ Rao C.A. Ramaa,*, Samuel Josilya, Kumar Shalanderb, Raju B.M.K.a, Dupdal Ravia, Venkateswarlu B.c aCentral Research Institute for Dryland Agriculture (CRIDA), Hyderabad - 500 059, Andhra Pradesh bInternational Crops Research Institute for the Semi-Arid Tropics (ICRISAT), Patancheru - 502 324, Andhra Pradesh cV.N. Marathwada Krishi Vidyapeeth, Parbhani, Maharashtra *Author for correspondence Email: carrao@crida.in
JEL Classification: Q12, Q120 § This paper is an output of National Agricultural Innovation Project (NAIP)-Component I sub-project “Policy and Institutional Options for Inclusive Agricultural Growth” funded by the Indian Council of Agricultural Research, New Delhi. Online published on 5 January, 2015. Abstract Improving the productivity of rainfed agriculture and income of farmers is important to achieve sustainable and equitable growth. This paper has examined the role of technology and credit, the two important factors of agricultural growth, in increasing farm incomes using farm-level data from three rainfed districts, namely Adilabad, Mahabubnagar and Rangareddy of Andhra Pradesh for the year 2010–2011. For the study, optimum crop plans were developed in a linear programming framework, and the results have indicated considerable scope for enhancing farm incomes by re-allocation of resources, adoption of improved technologies and enhancing access to capital or credit. Improved technology could increase the net returns of farmers by 20–84 per cent, depending upon their farm categories in the study districts. In the absence of credit, the net returns declined up to 80 per cent, especially for small farmers. In the absence of credit, the suggested optimum farm plans are not income-maximizing, and were found to lead to inefficient use of resources, especially of land. Top Keywords Rainfed agriculture, agricultural technology, credit, linear programming, Andhra Pradesh. Top |