Subsistence farmers’ access to agricultural credit and its adequacy

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Design/methodology/approach The study has used both secondary and primary data for analysis. Secondary data were collected from the annual reports of Pakistan Economic Survey and State Bank of Pakistan. Primary data were collected from 168 subsistence farmers through households’ survey. Farmers’ credit access and credit adequacy were measured using credit access ratio and credit adequacy ratio, respectively. The Student’s t-test and analysis of variance were used to assess the differences in credit access and adequacy among farmers’ groups (i.e. upper, medium and lower subsistence farmers). Tobit regression model was employed to determine the factors influencing credit adequacy among farmers. Findings The empirical results revealed that the amount of credit provided to subsistence farmers was less than stated in the national agricultural credit policy. Upper subsistence farmers had more access to credit than lower and medium subsistence farmers. Lower subsistence farmers had above average access to informal sources of credit, and had below average access to formal sources. The findings also revealed that lower subsistence and medium subsistence farmers had the highest credit inadequacy of funds for investment in agriculture. The results of the Tobit regression revealed that age, education, experience, household size, total landholding of farmer and proportion of own land influenced the agricultural credit adequacy.

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