Challenges and Constraints Faced by Potato Growers Regarding Farm Credit Acquisition

Abstract

Potato (Solanum tuberosum L.), widely considered as 'The king of vegetables', has been the most commonly cultivated food crop after rice, wheat and maize [1]. Potato growers were unable to meet the large expenses for cultivation from their own sources and they are bound to take credit from different sources due to high capital intensive nature of the crop [2]. They borrow credit in cash and kind from a number of sources. Coochbehar –II block has been selected purposively and a total of 100 potato growers were selected randomly from 5 villages. Primary data were collected using a pre-tested structured schedule. Ranking method and Garrett Ranking method were adopted to determine the problems and challenges encountered by potato growers with regards to farm credit acquisition. Among the institutional borrowers the main challenge is the unavailability of farm credit on time followed by insufficient credit limit, high interest rates charged by the financial institutes and delay in loan approval/disbursement, respectively. From the study area it was found that still lots of small and marginal farmers meet their credit needs from the non institutional sources and they are forced to pay a very high interest rate. For non institutional borrowers the major challenge is the fear of repayment/becoming defaulter followed by no proper land records, Small land holdings/no extra income source and collateral issues, respectively. The study suggests that financial institutes should come forward to meet the credit constraints and challenges faced by the potato farmers. Necessary steps must be taken care to reduce the rate of over-dependence on non-institutional sources by expanding its outreach to the corner most villages. The co-operative societies need to be expanded and strengthen to achieve maximum outreach to the small and marginal farmers. Repayment behavior needs to be inculcated to the borrowers to reduce willful default. Banks and co-operatives must regularly render counseling to the distressed farmers, which could sort out many of their constraints.