Role of Institutional Agriculture Credit on Doubling Farmer's Income: An Empirical Study in Madhubani District of Bihar

The study has been conducted in the Madhubani district of Bihar. The district is enlisted among the 100 ‘Agriculturally less-developed and distress districts of India’ on the basis of lower productivity of agriculture, lower credit-deposit ratio and lower proportion of urban to rural households. The role of institutional agriculture credit has been estimated by comparing the costs and returns in crop cultivation of loanee farmers in situations before and after institutional agriculture production credit-use. Paddy, wheat, maize and potato crops were selected for the study, as these crops together accounted for more than 82 per cent of gross cropped area of sample farmers. It was observed that the farmers could obtain more output and realized better price for their output and consequently higher net income from cultivation of paddy, wheat, maize and potato in after credit-use situation. It can be inferred that the institutional credit support extended to the farmers allowed them not only to use more inputs, but also substitute the inputs for one another. The increase in net farm income has been observed as of 37.0 per cent, 31.8 per cent, 33.0 per cent and 31.6 per cent in paddy, wheat, maize and potato, respectively after credit-use situation. The study has suggested to provide farmers better access to credit to enhance their income.