Impact of Agricultural Investments on Profitability of Farm Firms in Coimbatore District of Tamil Nadu

The study has looked into different sources and pattern of investment in farm firms, factors influencing farm investments and returns to investment in farm firms in Annur block of Coimbatore district. To determine the factors influencing farm investment, three-stage least square analysis was conducted for borrower and nonborrower farms. It was inferred that the coefficients of independent variables such as size of farm holding, institutional credit in borrowers and owned capital in non-borrowers, livestock unit, labour usage in borrowers and family labour utilization in non-borrowers, cropping intensity, lagged net returns, and non-farm income have a positive and significant impact on farm investments. The coefficient of family size in borrower farms was found to have a negative impact on farm investments. The study has also determined the factors influencing returns to investment. The study has suggested to increase the access of farmers to institutional credit through farmer-friendly schemes like kisan credit cards (KCCs), mobile banking, e-information, etc.