Journal Article

Does Lack of Access to Formal Credit Constrain Agricultural Production? Evidence from the Land Tenancy Market in Rural India

Anjini Kochar

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 79, issue 3, pages 754-763
Published in print August 1997 | ISSN: 0002-9092
Published online August 1997 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/1244417
Does Lack of Access to Formal Credit Constrain Agricultural Production? Evidence from the Land Tenancy Market in Rural India

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While it is commonly believed that lack of access to government-subsidized “formal” credit underlies observed differences in farm productivity in rural India, there is little empirical evidence on this issue. In this paper I address this issue by examining whether households use the farm land rental market to equilibrate their access to formal credit, as they are known to do in the case of other imperfectly marketable inputs. This research reveals, however, that the advantage formal borrowers enjoy in the tenancy market does not reflect their access to formal credit per se, but their greater ownership of inputs such as irrigated land.

Keywords: agricultural production; credit constraints; formal credit; tenancy market; O130; O160; Q140; Q150

Journal Article.  0 words. 

Subjects: Agricultural Economics ; Economic Development

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