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Nature and Extent of Capital Requirements of Landless Households: a Cash Flow Analysis

M. F. Alam
Department of Agricultural Finance, Bangladesh Agricultural University, Mymensingh.

S. Alam
Department of Cooperation and Marketing, Bangladesh Agricultural University, Mymensingh.

Abstract/ Executive Summary:

Income and expenditures of selected landless farm households has been investigated by following a monthly cash flow approach. Landless farm households spend about 30% more than what they earn. Cash differences were negative in 9 months out of 12. Only Dec.-Jan. Nov.-Dec. and Apr-May are characterized with positive balances. The cash flow approach shows that external capital (credit ) is necessary in almost all the months of a year for maintaining a subsistence level. Credit for both consumption and production should be provided if they are to be uplifted.

Keywords: Cash Flow, Landless, Households

Location: Two villages of Mymensingh

Start Date: 00-04-1985

End Date: 00-04-1986

Program Area: Socio-economic and Policy

Non-commodity: Credit

Objectives:

The cash flow approach to arrive at capital requirement of the landless farm families.

Methodology:

The study was conducted in two villages of Mymensingh. The villages were purposively selected on the bas of degree of exposure to modern falsities of farming. Village Boyra , Sadar Uoozilla was the most expose area in terms of road communication and market, access to irrigation facility. Dohakhola, another village, of lshwar ong Upazilla of the same district is about 13 kilometers away in the south ea! from the district headquarters. Farmers of this village have facilities to produce Bora paddy under Deep Tube well irrigation. A total of 16 landless farms, 8 for each village were selected. Data o different items of income and expenditure were collected fortnightly following a cost accounting method. Th investigation started in April-May '85 and completed in March-April1986 to obtain a full year data. Twenty four visits were paid to get the require, data from a single household. Data on income includes i) value of crops produced including wages, ii sale proceeds of livestock, poultry and fishes; iii) sale proceeds, of capita assets (disinvestment ) and iv) non agricultural income. Borrowing, though comes under inflow cash stream in cash flow approach, has not been considered.

Source of Information: Bangladesh J. Agril. Sci. 18 (1): 29-34 January,1991

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

Cash flow difference was the lowest -situation implying the fact that they need credit almost all the month in a year just for maintaining subsistence livelihood. Thus timing of providing external fund to them is not an important matter. Instead of operating with this meager and uneconomic holding, they may switch over from crop production to other agricultural and non-agricultural activity. But irrespective of options chosen, external financial assistance is essential in order to make them financially viable. The amount of external fund to be provided should sufficiently reflect both the production and consumption need. Otherwise the given external fund will be diverted for consumption leaving nothing or very little for productive use.

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