Chapter 1 Introduction, Scope and Nature of Agricultural finance
- 1. Agricultural Finance Compiled and edited by Mr Gorakh Dhami M.Sc (Agri economics), 3rd Sem. OSGU, Hisar 1st Lecture
- 2. Meaning Agricultural finance generally means studying, examining and analyzing the financial aspects pertaining to farm business, which is the core sector of India . The financial aspects include money matters relating to production of agricultural products and their disposal.
- 3. Definition Murray (1953) defined agricultural. finance as “an economic study of borrowing funds by farmers, the organization and operation of farm lending agencies and of society’s interest in credit for agriculture .” Tandon and Dhondyal (1962) defined agricultural. finance “as a branch of agricultural economics, which deals with and financial
- 4. Nature and Scope Studied as both micro and macro level Macro finance deals with different sources of raising funds for agriculture as a whole in the economy It concerned with the lending procedure, rules, regulations, monitoring and controlling of different agricultural credit institutions. Macro-finance is related to financing of agriculture at aggregate level
- 5. Nature and scope cont…….. Micro-finance refers to financial management of the individual farm business units. it is concerned with the study as to how the individual farmer considers various sources of credit, quantum of credit to be borrowed from each source and how he allocates the same among the alternative uses with in the farm. It is also concerned with the future use of funds. Therefore, macro-finance deals with the aspects relating to total credit needs of the agricultural sector, the terms and conditions under which the credit is available and the method of use of total credit for the development of agriculture, while
- 6. Significance of Agricultural Finance 1. vital and significant importance in the agro – socio – economic development of the country both at macro and micro level. 2. play a catalytic role in strengthening the farm business and augmenting the productivity of scarce resources. 3. Use of new technological inputs purchased through farm finance helps to increase the agricultural productivity 4. Significant role in increased farm income which leads
- 7. Significance of Agricultural Finance cont….. 5. Reduce the regional economic imbalances and is equally good at reducing the inter–farm asset and wealth variations. 6. Farm finance is like a lever with both forward and backward linkages to the economic development at micro and macro level. 7. As Nepalese agriculture is still traditional and subsistence in nature, agricultural finance is needed to create the supporting infrastructure for adoption of new technology 8. Massive investment is needed to carry out major and minor irrigation projects, rural electrification, installation of
- 8. Thank you
Editor's Notes
- #7: 2. For eg. When newly developed potential seeds are combined with purchased inputs like fertilizers & plant protection chemicals in appropriate / requisite proportions will result in higher productivity.