Socio-economic profile and determinants of credit borrowing among cotton growers in Amravati district

Introduction

Agriculture plays an important role in the economic development and livelihood of rural households in India. Cotton is one of the major commercial crops cultivated in Maharashtra and provides an important source of income to farming households. However, cotton cultivation requires substantial expenditure on land preparation, seed, fertilizers, plant protection, labour and other farm operations. Due to the high cost of cultivation and seasonal nature of agricultural income, farmers often depend on borrowed funds to meet their production and household requirements. Agricultural credit plays an important role in supporting farmers by providing timely financial resources for purchasing agricultural inputs and carrying out farm operations. The availability and accessibility of credit may differ among farmers depending upon their socioeconomic and farm characteristics. Factors such as age, education, family size, landholding and annual income may influence farmers' borrowing behaviour and their access to credit. Amravati district is one of the important cotton-growing regions of Maharashtra. Understanding the socio-economic characteristics of cotton farmers and the factors influencing their credit borrowing behaviour is therefore important for improving the effectiveness of agricultural credit services. Hence, the present study was undertaken to examine the socio-economic profile and determinants of credit borrowing among cotton growers in Amravati district of Maharashtra.

The collected data were analysed using frequency, percentage, averages and multiple regression analysis. Frequency and percentage analysis were used to study the socio-economic characteristics of the selected farmers. Multiple regression analysis was used to identify the factors influencing the amount of loan borrowed by the farmers. Age, family size, annual income, total net cultivated area, rate of interest and purpose of loan were considered as explanatory variables, while the amount of loan borrowed was taken as the dependent variable. The age-wise distribution shows that the majority of the selected cotton farmers (95.56%) belonged to the 31-60 years age group. The proportion was highest among large farmers (97.06%), followed by small farmers (96.15%) and medium farmers (93.33%). Only 1.11 per cent of the farmers were below 30 years of age, while 3.33 per cent were above 60 years. Thus, most of the selected cotton farmers were in the 31-60 years age group. The educational status of the selected cotton farmers indicates that the largest proportion of farmers (33.33%) had higher secondary education, followed by high school education (25.56%). About 15.56 per cent of the farmers had middle school education, while 13.33 per cent were illiterate. Only 7.78 per cent of the farmers were graduates and above, whereas 4.44 per cent had primary-level education. Thus, the majority of the selected cotton farmers had education up to higher secondary or high school level. The gender-wise distribution shows that male farmers were predominant among the selected respondents, accounting for 95.56 per cent of the total farmers, while female farmers accounted for 4.44 per cent. Among small farmers, 95.65 per cent were male and 4.35 per cent were female. In the medium farmer group, male farmers constituted 97.06 per cent and female farmers 2.94 per cent. Among large farmers, 93.94 per cent were male and 6.06 per cent were female. Thus, cotton farming in the study area was predominantly carried out by male farmers. The family size distribution shows that the majority of the selected farmers (66.67%) had 3 to 6 members in their families. This group accounted for 65.22 per cent of small farmers, 67.65 per cent of medium farmers and 66.67 per cent of large farmers. About 22.22 per cent of the farmers had up to 3 family members, while 11.11 per cent had more than 6 members. Thus, most of the selected cotton farmers belonged to the medium-sized family group of 3 to 6 members. The landholding size of the selected cotton farmers indicates that 37.78 per cent of the farmers belonged to the large farmer category, followed by medium farmers (33.33%) and small farmers (28.89%). The average landholding was 1.05 ha for small farmers, 2.69 ha for medium farmers and 5.80 ha for large farmers. The overall average landholding of the selected farmers was 3.40 ha. Thus, the majority of the selected cotton farmers belonged to the large landholding category. The annual family income distribution of the selected cotton farmers shows that the largest proportion of farmers (47.78%) belonged to the income group of ₹50,000 to ₹2 lakh. This was followed by 41.11 per cent of farmers having an annual income below ₹50,000, while 11.11 per cent of farmers belonged to the income group above ₹2 lakh.

Among the different farmer categories, the highest proportion of large farmers (50.00%) was in the ₹50,000 to ₹2 lakh income group. Overall, the findings indicate that most of the selected cotton farmers had an annual family income between ₹50,000 and ₹2 lakh. The regression analysis indicates that the model had a Multiple R value of 0.91 and an R-square value of 0.84, showing that 84 per cent of the variation in loan borrowing was explained by the variables included in the model. Among the explanatory variables, annual income was positive and significant at the 1 per cent level, indicating that higher-income farmers were more likely to borrow loans. The rate of interest was negative and significant at the 5 per cent level, suggesting that higher interest rates discouraged farmers from borrowing. The purpose of loan was also negative and significant at the 1 per cent level, indicating its significant influence on loan borrowing. Age, family members and total net cultivated area were found to be non-significant. Overall, annual income, rate of interest and purpose of loan were the significant factors influencing loan borrowing among the selected cotton farmers.

Factors influencing loan borrowing among cotton farmers

Conclusion

The study was conducted to examine the socio-economic profile of selected cotton growers and to identify the factors influencing loan borrowing among cotton farmers in Amravati district. The study was based on primary data International Journal of Agriculture and Food Science https://www.agriculturaljournals.com collected from 90 selected cotton farmers from three talukas of the district. The findings revealed that the majority of farmers belonged to the 31-60 years age group and had education up to higher secondary level. Most of the farmers had family sizes of 3 to 6 members, while a relatively higher proportion belonged to the large landholding category. The majority of farmers had an annual family income between ₹50,000 and ₹2 lakh.

The regression analysis showed that the model had good explanatory power, with an R-square value of 0.84. Annual income had a positive and significant influence on loan borrowing, whereas rate of interest and purpose of loan had a negative and significant influence. Age, family members and total net cultivated area were found to be nonsignificant. Thus, the findings suggest that the economic position of farmers and the cost and purpose of credit play an important role in influencing loan borrowing decisions among cotton farmers.

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