Role of credits in agricultural marketing

Abstract

The study indicates the importance of credit facilities to improve agricultural production. At present non institutianal lenders pay a major role in providing credits in agricultural production. Rural and urban level dealers act as one of the major components in non institutional lenders. Most of the present rural agricultural production is either stagnated or deterriorated due to indebtedness of the farmers to these rural and urban money/credit lenders. In some cases the market margin retained by dealers is higher than the price received by the producers. Also with an increase in producer prices, the margin retained by the dealers increases very significantly. This clearly indicates that the open market phenomena is being obstructed by rural and urban level money lenders. The indebtedness of the farmers reduces their bargaining power. Therefore, price level received by the farmer is being mainly decided by the dealer and not by the open market interactions