Impact of Agriculture Finance on Agricultural Development in Southern Part of Assam

 

Farid Ahmed Laskar1, Dr. Abdur Rashid2

1Ph.D Scholar, Department of Economics, University OF Science and Technology Meghalaya.

2Head and Associate Professor, University OF Science and Technology Meghalaya.

*Corresponding Author Email: laskar786laskar@gmail.com, marashidmcomllb@gmail.com

 

ABSTRACT:

Agriculture is the mainstay of the Indian economy, because it contributes to the economic and social welfare of the entire Nation through its influence on the GDP and employment. Even after more than 60 years of country’s independence this agriculture continues to be the backbone of the country’s economy. Instead of this tremendous importance, the developmental efforts in enhancing the farm level efficiency and agricultural growth have been overlooked by the policy makers and it never got the attention it merits. The present work is grounded on a primary data gathered through personal interview of 105 farmers of three districts of the Valley. The average efficiency level of the farmer and the increase of agriculture are found inconsistent due to diverse reasons as identified. The outcome shows that there exists some scope to improve the efficiency of the farmers with the existing level of inputs use and with the available technology. Thus a uniform and a challenging mode of defending this process and to support policy making is to analyze and evaluate the performance of farm level efficiency of agriculture and its growth. Many research works have already been performed by the eminent researchers giving very little attention to the farm level efficiency of factory farm and its increase of North Eastern Region (NER) in general and Assam and its Southern region in particular. This written report can provide necessary support to policy makers, innovators and research scholars in measuring the performance of farmer’s level of efficiency along with agricultural growth and development of Barak Valley Region of Assam.

 

KEYWORDS: Agriculture, Finance, Development

 

 


INTRODUCTION:

Any developmental package in the agricultural sector of this region invites frustration and the consequent failures. This is not only due to the wide diversity within the region itself but also due mainly to the low farm level efficiency in the said sector. The consequent depressions become the main hurdle in the mode of economic development of the region. The foundation of the economy of the state is agriculture as in most other states. An increased agricultural production is the need of the hour and it is the most prominent expression of progress for the overwhelming majority of the population.

 

The high point of poverty in the area, high density of population, low agricultural productivity and the relative geographical isolation of the region, very little industrialization and it‘s less scope for the future necessitate undertaking studies relating to the formation of a strong agriculture sector. This may offer the necessary basis for agricultural development of the area as a whole, but proper identification of the problems of the valley will be the beginning of all developmental policies (Roy and Bezbaruah 2002). Some other significant cause which seems to be for the low productivity of agriculture in Barak Valley, that many farmers with low literacy rates and inadequate physical infrastructure face difficulties in serving agriculture in an effective manner. The developmental efforts in enhancing the farm level efficiency have been omitted by the policy makers and it never got the attention it deserves (Rudrappan 2003).

The role that farming is playing on economic evolution has been acknowledged for years. The espousal of new technologies designed to enhance the farm yield and income has got exceptional attention as a way to speed economic development (Hayami and Ruttan 1985). However output growth is not just influenced by innovations, but also by the efficiency with which available inputs are used (Nishimizu and Page 1982). The possible importance of efficiency as a means of raising farm‘s production has rendered a significant number of works focusing on agribusiness.

 

The Study related to agricultural development is not simply that of enhancing production and efficiency, but generation of farm level efficiency for the lone purpose of its measurement. In malice of this tremendous importance, the developmental efforts in enhancing the farm level efficiency have been omitted by the policy makers and it never got the attention it deserves (Rudrappan 2003).

 

Thus, measuring farm level efficiency is important in parliamentary procedure to recognize the extent and inefficiency of agricultural status, but why farms differ in their relative efficiency level can be considered most crucial. Many research works have already been performed by the eminent researchers given very little attention to the farm level efficiency of agriculture of North Eastern Region (NER) in general and Assam and its southern region in particular. Therefore the present work constitutes a holistic effort to assess and explain the farm level efficiency differentials using farms specific attribute.

 

RATIONALE OF THE STUDY:

The economy of Barak Valley continues to be predominantly agrarian in nature. About 70 per cent of the people in the valley depend on agriculture for their livelihood. Paddy is the major crop being cultivated in the valley. While due to poor agricultural productivity in the income of the farmers of the valley is also very depressed. Due to frequent flooding and sometimes scarcity of water during pre and post monsoon period also affect the agricultural output. However Agriculture in Barak valley is primitive in nature and low per hectare consumption of plant food and pesticides which again generates a low productivity in the vale. Due to inadequate irrigation facilities, a high rate of productivity is difficult to expect in the valley. While HYV seeds, still calls for awareness among the most farmers around its high pace of productivity. The New Agricultural Strategy, which is popularly known as the Green Revolution fails to establish its presence fully in the study area. Hence the question of efficiency in resource allocation in agriculture is important and is widely held that efficiency is in the middle of crop farming output. This is because the range of agricultural production can be extended enormously and maintained by farmers through sufficient usage of natural resources (Udoh 2000). For this understanding, efficiency has continued as an important matter of experimental investigation, particularly in the agricultural backwardness of the study area.

 

Meaning of Efficiency:

The farm level efficiency has been conventionally assessed through the concept of efficiency. Farrell (1957) initiated the term efficiency and is specified in a number of related ways, including the utilization of resources in such a manner as to maximize the production or the comparison of what is actually grown with what can be accomplished with the same grade of resources (land, labor, capital and so on). A farm is efficient if its objective of maximization of production is met and inefficient if they are not (Fare et.al 1985). Hence, the efficiency of the farm is measured by comparing any given situation with or the situation that satisfies the farm to reach maximum output level.

 

Rane and Deorukhkar (2007) stated efficiency as to get the maximum possible output from the given resources, however a farm generally means an area of land under single ownership and is devoted to agriculture and thus farm level efficiency‘ means the efficient utilization of production resources (land, labor, capital and many other inputs) to get sustainable output.

 

Still, efficiency is only defined as the relationship between a set of inputs and output (Eureval-C3E 2006). As such, in agricultural output, which is output per land area under cultivation, is widely used as a touchstone of how efficient land is used in production. It hence brings up to the degree of success with which a definite device is employed to accomplish a definite intention.

 

Efficiency and Productivity:

By the term productivity, we mean the changing relationship between the agricultural production and the major inputs such as soil, labor, etc. This most usually used term for representing agricultural productivity is the mean output per hectare of land (Dhar 2010). Kumbhakar and Lovell (2000) defined productivity as the ratio of the output that it grows to the inputs that it employs. A change in productivity can be induced not simply by a change in efficiency, but also by a change in the production technology and the environment in which the production unit operates (Lovell 1993). The efficiency of a farm is thus its success in producing as large an amount of production as possible. From the given sets of inputs, maximum efficiency of a farm is reached when it becomes impossible to reshuffle a given resource combination without decreasing the entire production. Subsequently the first appearance of advanced agricultural technique along with the adoption of hybrid seeds, extension of irrigation facilities and application of intensive methods of cultivating the efficiency has recorded a steep rising trend (Dhar 2010).

 

Nevertheless, the efficiency calculations reveal significant differences among regions and peasants. Various works such as (Kalirajan 1990) indicate that the productivity of a farm is determined by technical knowledge and intellect, as well as by the socio-economic environment within which the farmers must make determinations. The study of Xiaosong Xu and Scott R. Jeffrey (1998) discloses a confident relationship between efficiency and productivity and therefore stressing the importance of considering peasants abilities to obtain and interpret information pertaining to new agricultural methods. The field also finds that farm size is a plus element in explaining the efficiency of modern farming.

 

In the illumination of all these facts, it is quite clear that an increase in agricultural production can come from an increase in production efficiency. Hence it is indispensable to appraise how the existing inputs are being applied and what possibilities exist for improving efficiency of agricultural output, moved over the resource constraints.

 

REVIEW OF THE LITERATURE:

The relevant studies in this field have great value in identifying the problematic situation and insurance implications. The several theoretical and empirical statements are offered to explain the efficiency of farming output.

 

Kalirajan (1984), examined how the effective role of latest technology affected agriculture production levels in a big number of paddy farmers (based on 81Phillipine paddy farmers) and concluded that the fresh technology was not fully seen by the cultivators. While in another study of Kalirajan and Shand (1985), a sample of 91 agriculture farmers from the Coimbatore district of Tamil Nadu and found that the point of schooling as their understanding of latest technology had a significant optimistic role in productivity.

 

Kumbhakar et.al (1989) employed a systematic approach to estimate technical, allocative and economic inefficiencies for farmers. The estimation specifically included both endogenous variables as labor and capital and exogenous variables included level of conventional education, measures of farm size for the farmers affected. Both cases of variables were found to cause large effects on the unpredictability of farm output. Technical competence of farms was found to be optimistic linked to farm size.

Ashok Rudra (1980) set up in his studies various types of relationship in explaining farm‘s efficiency that irrigation intensity was higher in small farms, but from mid-sixties it is positive in bigger farms. Intensity of cropping, the strength of labor inputs is also higher on small farms than on the large farms. Total input application can be found negatively associated with farm size, but all will depend on how the input values are assigned. Yet his work reveals that particularly in green revolution belt, the size of the inputs and the size of the farms was found to be positively related.

 

Ekanayake (1987) examined efficiency in a sample of 123 Sri-Lankan paddy farmers and the results indicated that there was no significant technical inefficiency for farmers. In his analysis, he found that literacy, experience, etc. has a significant positive impact along the technical efficiency level of the farmers. This was too true when analyzing the farmer’s allocative efficiency as the proportion of profit at predicting output to maximum gain. In increase, technological efficiency was found to be significantly related to allocative efficiency. Kumbhakar et.al (1989) employed a systematic approach to estimate technical, allocative and economic inefficiencies for farmers.

 

The estimation specifically included both endogenous variables as labor and capital and exogenous variables included level of conventional education, measures of farm size for the farmers affected. Both cases of variables were found to cause extensive effects on the changeability of farm output. Technical effectiveness of farms was found to be absolutely linked to farm size.

 

The study of Battese and Coelli (1995) based on an analytic thinking of technical inefficiencies in production of paddy crop by the farmers. The attempt has been induced to investigate farm specific technical efficiency for paddy farmers in Haryana. The survey also tries to look into the influence of farmers‘ specific variables on the technical inefficiency of paddy production. Trying out a theoretical account for farm level efficiency for paddy farmers from an Indian village showed however that older farmers are more ineffective than the younger ones. Many other subjects at international levels also reported similar results, suggesting that older farmers are unwilling to accept a higher degree of efficiency. In a study of Jose R. Vicente (2004), found out that farm‘s efficiency is influenced principally by the measure of allocative efficiency rather than technical efficiency is nearly all examples of agrarian output. The outcomes of the study also pointed out that the importance of agro-ecological zonings, as well as investment in education are likewise critical in increasing the farm level efficiency in agricultural output.

 

In the illumination of all these facts stated above, it is quite clear that an increase in agricultural production can come from an increase in production efficiency. Hence it is indispensable to appraise how the existing inputs are being applied and what possibilities exist for improving efficiency of agricultural output, moved over the resource constraints.

 

METHODOLOGY:

To identify as to which elements are responsible for keeping farmers from effective use of improved practices to reach higher productivity and agricultural growth, it is felt necessary to take the investigation to the micro level. Accordingly, a field survey is held up in the selected fields of the valley. The field study has been settled on the footing of the sampling design where a pilot survey has been conducted and for this, three Agricultural Extension Officer (AEO) circles of the three districts of the Valley were selected as the broad location for the field work. From these AEO‘s circle three villages, namely-Haritikar, Katigorah and Harinagar of Cachar district, while Sunatula, Srimantakanishail and Kudrakandi of Karimganj district and Saidbond, Matijuri and Boalipar of Hailakandi District were selected and a total of 106 farm Households taking 36 from each ADO‘s circle has been considered. On the base of these samples, an analysis has been prepared by applying several statistical techniques such as co-efficient of variance, linear regression analysis, t-test and statistical software for social science (SPSS).

 

RESULT AND DISCUSSION:

Let us go through the following tables for obtaing the results.


 

Table1.1: Variation of inputs used in Karimganj District

Model

Unstanderdised co-efficient

Standerdised co-efficient

B

Standard error

Beta

t-test

 Significance

Constant

13.445

8.242

1.632

0.114

Labour

0.357

.109

0.487

3.244

0.003

Pesticides

0.005

0.004

0.298

2.101

0.042

Fertilizer

-0.147

0.051

-0.426

-2.787

0.008

Irrigation

0.072

0.066

0.155

1.081

0.288

 

Table1.2: Variation of inputs used in Hailakandi District:

Model

Unstanderdised co-efficient

Standerdised co-efficient

B

Standard error

Beta

t-test

 Significance

Constant

51.921

9.855

5.268

.000

Labour

-.039

0.147

-.048

-.256

0.798

Pesticides

0.003

0.004

0.091

0.443

0.662

Fertilizer

0.008

0.087

0.022

0.102

0.918

Irrigation

-0.082

0.095

-0.162

-0.857

0.397

 


Dependent variable: output:

The table 1.1 indicates that the constant is insignificant, while the project is found significant at the 1 % level (003). The variable labor has a positive significant impact on output, i.e. if the labor is increased by 1%, then the end product will increase by 0.357%. While it is seen that fertilizer has a negative significant impact on output, i.e, if the usage of fertilizer is increased by 1%, then the yield will decrease by. 147%. The co-efficient of the variable pesticide is found positive and also it is significant at 5% (0.042) level, thus it indicates that if the role of pesticide is increased by 1% then productivity will be increased by. 005%. The role of irrigation is found insignificant (0.288).

 

Dependent variable: output:

The table 1.2 indicates that there is no any independent variable which is found significant while only the constant is found significant. The variable fertilizer and pesticides are positively related, means if we increase their function, the output will increase by. 008% and. 003%, respectively. While the variable labor and irrigation are found negatively related to the dependent variable and hence with an increase in the role of labor and irrigation, the output will go down by 0.39% and 0.82%.

 


Table1.3: Variation of inputs used in Cachar District

Model

Unstanderdised co-efficient

Standerdised co-efficient

B

Standard error

Beta

t-test

 Significance

Constant

4.075

0.545

 

8.621

.000

Labour

-0.196

0.126

-0.274

-1.546

0.133

Pesticides

-0.001

0.007

-0.035

-0.178

0.855

Fertilizer

0.012

0.013

0.185

0.918

0.364

Irrigation

.011

.010

.181

1.025

0.312

 

 

Table1.4: Descriptive Statistics of Key Variables

Variables selected

Average

CV

Cachar

Karimganj

Hailakandi

Cachar

Karimganj

Hailakandi

Productivity

49.78

35.6

49.13

0.08

0.15

0.14

Fertilizer

60.74

59.05

38.21

0.41

0.28

0.46

Pesticides

618.56

632.85

487.85

0.51

0.53

0.75

Irrigation

8.77

9.13

17.01

1.21

1.37

0.83

Source: Compiled collected data from field survey .

 


Dependent variable: output:

The table 1.3 explains that the constant is significant. The variable labor is negatively related to the dependent variable (-.196) and it is insignificant, means if labor increases, output will decrease. The co-efficient of the variable fertilizer and irrigation are found positively related, but are insignificant, indicating that with an increase in the usage of plant food and irrigation by 1%, the output will also increase by 0.12% and 0.11% respectively. While pesticides are negatively related to the dependent variable and hence with an increase in the use of pesticides, the output will go down by 0.001%.

 

It is observed from the table 1.4 that with regard to the productivity of winter rice, Cachar district registers the highest productivity, i.e., 49.78qtls/hectare in comparison to the other districts of the vale. In Hailakandi district it is in an average of 49.13qtls/hectare and the lowest is 35.60qtls/hectare only in Karimganj district. In achieving the highest in productivity, the Cachar district also topped the list in the use of fertilizer with an almost maximum use of pesticides but with a really poor utilization of irrigation facilities. While in using the irrigation facilities, Hailakandi district is at the upper side, however, with a comparatively low use of plant food and pesticides i.e. 38.21 kilos/hectare and 487. 85gm/hectare respectively the district registers 49.13 Qtl/hectare, indicating that the Hailakandi district showed a healthy production rate. With respect to the variance in productivity, which is below 1% mark, showing that the Cachar district registers more consistency in comparison to the other districts of the vale. In the use of fertilizer, Karimganj district showed much consistency, while Cachar showed much better consistency in the use of pesticides and showing Karimganj at such a consistent level in the role of irrigation.

 

FINDINGS:

On the basis of the collection of primary data and analysis made above, the following findings are summarized:

 

1. The technology has been using in agriculture not upto the satisfactory level.

2. Low level use of production and productivity are not upto the satisfactory level.

3. The level of education of farmers is very poor.

4. There is a huge loss of man-days due to lack of proper health care facilities.

5. There is a enough deficiencies in agro-infrastructure.

6. Irrigation facilities are not sufficient in the study area.

7. Enormous monocropping is found in Agri-business in the valley.

8. Lack of awareness of HYV seeds among the farmers in the valley.

 

CONCLUSION AND SUGGESTIONS:

Development of farming is directly related to resource use efficiency. However resource use and productivity in agriculture is largely determined by a number of genes. The pathetic land of agricultural infrastructure, especially on irrigation extension service, non-suitability of available technology and package, awareness among the farmers about the use of HYV seeds are the major constraints in the agrarian growth of the Barak Valley region of Assam. In such an underdeveloped agriculture, the availability of irrigation infrastructure lead to a significant positive impact along the rate of uptake of fertilizer on farms and also farm‘s decision regarding adoption of mechanized ploughing, practice of HYV‘s. If the irrigation infrastructure is stretched out, the majority of farmers want to cultivate more lands and thus greater adjustment in the own land and the desired cultivated land and thus may raise equity in the distribution of usable land. The average efficiency level of the farmer and agricultural development are found inconsistent. This outcome suggests that there exists some scope to improve the efficiency of the farmers with existing levels of inputs use and with the available technology.

 

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Received on 23.10.2020         Modified on 11.11.2020

Accepted on 29.11.2020      ©AandV Publications All right reserved

Res.  J. Humanities and Social Sciences. 2021; 12(1):37-42.

DOI: 10.5958/2321-5828.2021.00007.3