Farmer’s Access to Agricultural Finance through FPOs in Kurnool District of Andhra Pradesh, India

Abstract

In recent times, FPOs in partnership with state governments involves the small & marginal farmers for providing ease of access to credit, marketing facilities, technical advisory, and collective bargaining. Kurnool district has actively performing FPOs under different departments and was purposively selected as there is a good spread of crops across the mandals and potential scope exists for setting up of multi commodity FPOs in the district. Multi staged stratified random sampling technique was adopted. The sample size constituted of 100 FPO members and 50 Non-FPO members in the study area. The current study examined the sources of finance, credit utilization pattern of FPO and Non-FPO members in the study area. Sources of the finance for the FPO farmers were the public banks, owned funds, credit access through FPOs and the informal sources. For Non-FPO sources of finance were public banks, owned funds and informal sources. Tabular analysis revealed that major part of the credit requirements were met by public banks for both FPO and Non-FPO members and dependency on the informal sources was low among FPO members compared to Non-FPO members to meet their working capital requirements. Alternate sources of formal finance were more for FPO members than the Non-FPO where the credit through FPOs is lacking for Non-FPO members apart from many other collectivized benefits. The availed credit amount was utilized more towards the farming related activities than the personal activities by the FPO farmers. The more returns to the FPO members than the Non-FPO members were noticed due to the optimum and wise per rupee expenditure on farm activities by the FPO members.