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Utilization of Specialized Agricultural Credit on Onion and Garlic Cultivation in Selected Areas of Bangladesh

M. Khatun
Scientific Officer
Agricultural Economics Division, Bangladesh Agricultural Research Institute (BARI), Gazipur

Tanvir M. B. Hossain
Scientific Officer
Agricultural Economics Division, Bangladesh Agricultural Research Institute (BARI), Gazipur

S. Khandoker
Scientific Officer
Agricultural Economics Division, Bangladesh Agricultural Research Institute (BARI), Gazipur

M. E. A. Begum
Senior Scientific Officer
Agricultural Economics Division, Bangladesh Agricultural Research Institute (BARI), Gazipur

A. F. M. S. Anowar
Lecturer
Department of English, BMTTI, Gazipur, Bangladesh

Abstract/ Executive Summary:

Specialized Agricultural Credit (SAC) policy implemented by the Bangladesh Bank played a significant role to increase agricultural production specially spices. But documentation in this regard is scarce in Bangladesh. Therefore, this study captured the impacts of specialized credit on onion and garlic cultivation at Faridpur and Natore district respectively. The survey was conducted on two hundred farmers of which fifty were credit recipient farmers and fifty were non- recipient farmers of each district. Credit recipient farmers received on an average Tk. 26,255 for spices cultivation. Average cost to complete the process from receiving to repaying credit was Tk. 515. Farmers in the study areas utilized their maximum part of credit for spices cultivation (96.2%) followed by other crop cultivation (2.15%), family expenditure (1.4%) and business (0.25%). Due to getting credit facility farmers cultivated 16 decimals more land compared to previous years for spices, 42% of the farmers increased number of spices crop for cultivation, and farmers also increased amount of input use with better quality. For these, credit recipient farmers harvested spices with higher yield which finally helped in getting higher farm income. Credit recipient farmers received 7% higher net return from onion and 16% higher net return from garlic cultivation. Highest percentage of farmers (82%) mentioned that lack of information about spices credit was the main reason behind not receiving credit facility by large number of farmers. Specialized credit facility for farmers need to be widened through spreading information of spices credit facility among the farmers and increasing amount of credit.Therefore, domestic production of spices will increase and imports of spices from abroad will decrease.

Keywords: Specialized agricultural credit, Onion, Garlic, Impact, Utilization pattern, Spices production.

Location: Faridpur and Natore districts

Start Date: 00-02-2014

End Date: 00-03-2014

Program Area: Socio-economic and Policy

Commodity: Onion, Garlic

Objectives:

The objectives of this study were as follows.
i.   To explore the utilization pattern of specialized credit for spices cultivation;
ii.   To measure the impacts of specialized agricultural credit on spices cultivation;
iii.   To find out the limitations of access to specialized agricultural credit; and
iv.   To suggest policy options for the improvement of credit policy.

Methodology:

Description of the study areas
Faridpur and Natore districts were purposively selected according to the high intensity of onion and garlic production (BBS, 2012). Nagorkanda upazila from Faridpur and Gurudaspur upazila from Natore district were selected according to the availability of specialized credit users.

Sampling technique
A multi-stages sampling procedure was followed to collect sample farmers for this study.Two spices crops, namely onion and garlic were purposively selected for this study. Fifty credit recipients in spices production was selected from each upazila. An equal number of credit non-recipients (50) were also selected from each district for the sake of comparison. Thus, the total number of respondents was 200.

Period of the study
The study was mainly based on primary data collection through face to face interview which was conducted through field survey during the month of February to March 2014.

Analytical techniques
The collected data were edited and managed to fit with proposed analytical technique of the study. Descriptive statistics such as averages and percentages were used in this study. Profitability of onion and garlic was analyzed to compare the return received by the credit recipient and non-recipient farmers. To measure the significant difference between recipient and non-recipient farmers Z- test was used.

Source of Information: Bangladesh J. Agril. Res. 42(2): 233-247, June 2017 ISSN 0258-7122 (Print), 2408-8293 (Online)

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Specialized credit facility for the spices farmers has created a wide range of impacts among the farmers. Due to getting credit facility farmers increased their cultivable land for spices cultivation, increased number of spices crop for cultivation, increased input use in quantity and quality. For these, the yield of cultivated spices increased in the farmer’s field which finally increased the income of farmers. Net return of credit recipient farmers for both crops was higher. Most of farmers mentioned lack of information about spices credit as a reason behind not getting credit. According to the farmers’ perceptions credit facility for farmers can be widen through spreading information of spices credit facility among the farmers and increase amount of credit.
Since this policy has positive impacts on the increasing of area and production of spices, Bangladesh bank and government authorities should increase the total amount of credit under specialized credit scheme. To increase the number of farmers under this credit policy, government and banks should take initiatives to disseminate the information about special credit facility for spices cultivation among the farmers. Bank should increase the amount of credit according to the land size or production cost. Credit disbursement system should make easy and transparent. Bank should disburse collateral free credit and repayment system should be yearly. If these initiatives are undertaken each farmer would get opportunities of receiving more amounts and the number of beneficiaries will also be increased. Therefore, domestic production of spices will increase and imports of spices from abroad will decrease which is the ultimate goal of this specialized credit policy.

Knowledge Management: Journal