Implications of Cashless Transactions in Tamil Nadu Agriculture

This study examines the adoption of cashless transactions among agricultural stakeholders in Tamil Nadu. It evaluates its welfare implications in terms of time saving, labour efficiency, risk reduction, and cost benefits. The research focuses on three districts—Coimbatore (highly developed), Madurai (medium developed), and Ariyalur (low developed)—selected based on a Development Index constructed from secondary data on agriculture, health, infrastructure, and telecommunication. Primary data were collected from 570 respondents, including farmers, landless agricultural labourers, input dealers, and traders, using structured interview schedules. A two-stage stratified random sampling method was employed for sample selection. The Logit Model was applied to identify socio-economic factors influencing the adoption of cashless transactions, with variables such as access to technology, digital literacy, social participation, and infrastructure proving significant. An Adoption Index was also constructed to assess the level of digital transaction usage. The findings reveal that knowledge of electronic gadgets, smartphone ownership, and internet access are key drivers of adoption, while social participation and internet expenditure have supportive roles. Welfare analysis indicates that all stakeholders benefit from adopting cashless transactions, though the extent varies, with input dealers and traders gaining the most due to higher transaction volumes. Farmers and labourers experience moderate benefits, constrained by limited access and awareness. The study underscores the need for targeted interventions to enhance digital infrastructure, promote financial literacy, and ensure equitable access, particularly for smaller stakeholders, to achieve inclusive rural development through cashless systems.