Pratidhwani the Echo

A Peer-Reviewed
International Journal of Humanities &
Social Science

ISSN: 2278-5264 (Online) 2321-9319 (Print)

Impact Factor:
6.28 (Index Copernicus International)

Volume-IV, Issue-II,
October 2015, Page No. 45-51

Published by Dept. of
Bengali, Karimganj College, Karimganj,
Assam, India

Website: http://www.thecho.in

Role of Assam Gramin Vikash Bank in changing the economic condition of
the farmers in the Nalbari District

Dr. Amarendra Talukdar

Associate
Prof., Dept. of Commerce, Gauhati Commerce College, Guwahati, Assam, India

Abstract

The
Royal Commission on Agriculture quoted that “The Indian Peasant is born in
Debt, lives in Debt, dies in Debt and bequeaths Debt”. Thus need for credit
arises as it injects life into lifeless agriculture, resulting in enhanced crop
productivity which benefits both the farmers and the country.

Nalbari District is situated in the North
West part of Assam. In 2011, the percentage of rural population was 89.28%. The
district has 18 branches of Assam Gramin Vikash Bank ( AGVB), the only
restructured Regional Rural Bank (RRB) of the North Eastern Region was set up
on 12th January, 2006 by amalgamating the erstwhile Pragjyotish
Gaonlia Bank, Lakhimi Gaonlia Bank, Cachar Gramin Bank & Subansiri Gaonlia
Bank as per provision under section 23 (A) of RRB Act, 1976. The Assam Gramin Vikash Bank also
has been trying to help the farmers by catering to their financial needs for
the development of agriculture.

Under
such circumstances, we feel the necessity to study the impact of agricultural
loans by the Assam Gramin Vikash Bank in changing the condition of the farmers
in the said district. This paper is an analytical and a descriptive one.
Data collected were basically from the primary sources with the aid of
structured questionnaire.

Key Words:
Agricultural loan, Debt, Credit, Regional Rural Bank (RRB), Assam Gramin
Vikas Bank.

Introduction

Agriculture plays a predominant role in a developing country like India
where above 50% of people are entirely` dependent on agriculture. It is the most backward sector of the economy
inhabited mostly by the very deprived section of our society. This source of livelihood thus becomes
the backbone of the economy of our country. Moreover it provides
livelihood to a major portion of the population directly and indirectly. There is no doubt about the
efficiency of the Indian farmers, yet due to the lack of adequate finance for
the development of agriculture they remain very poor generations after
generations. Credit plays an important role in the economic development of
developing countries like India as it infuses life into stagnant economic
activities. Credit is required for both traditional agriculture and new farm
technology. The requirement of credit under new farm technology is more than
the traditional agriculture as new technology is no doubt, size-neutral but,
not capital-neutral.

West part of Assam. The district consists of 7 Development Blocks namely, Tihu,
Madhupur, Barbhag, Barkshetri, Barigog-Banbhag, Pub Nalbari and Paschim
Nalbari. In 2011, total population of the district was 7,71,639.  The percentage of rural population was
89.28%. The main occupation of the people living in the district is
agriculture. They grow mainly Paddy, Wheat, Pulses, Mustard, Sugarcane, Jute,
Tobacco, Potato, Ginger, Turmeric, Vegetables, Horticultural crops, etc. The
district has 18 branches of Assam Gramin Vikash Bank. Assam Gramin Vikash Bank (AGVB), the only
restructured Regional Rural Bank (RRB) of the North Eastern Region was set up
on 12th January, 2006 by amalgamating the erstwhile Pragjyotish
Gaonlia Bank, Lakhimi Gaonlia Bank, Cachar Gramin Bank & Subansiri Gaonlia
Bank as per provision under section 23 (A) of RRB Act, 1976. The Head Office of
the Bank is situated at G.S. Road, Bhangagarh, Guwahati-781005,  Assam. The operational area of the Assam
Gramin Vikash Bank consists of the entire area of operation of the aforesaid
four pre-amalgamated RRBs which cover 25 districts out of 27 districts in the State
of Assam, barring only the two hill districts, viz. Karbi Anglong and North
Cachar Hills. The Bank has been included in the second schedule of RBI Act 1934
vide Notification No. RPCD.CO.RRB No. 7430/03.05 100/2008-09 dated 27.01.2009.

The Assam Gramin Vikash Bank also has been trying to help the farmers of
Nalbari district by catering to their financial needs for the development of
agriculture.

Significance of the
Study

The significance of the study lies in the
fact that it enquires about the role played by the Assam Gramin Vikash Bank
towards the development of agriculture in the Nalbari district. This study is
an attempt to find out the involvement of the Assam Gramin Vikash Bank in the
development of agriculture in the Nalbari district.

Objectives of the
Study

The
objectives of the research work are to study the following aspects.

ü  To study about the changes in the
economic conditions of the farmers after the use of the loan sanctioned by
Assam Gramin Vikash Bank.

ü  To study the contribution of the
Assam Gramin Vikash Bank in improving the ability of the farmers to enjoy some
basic facilities in their day to day life.

Research Methodology

Ø  Nature
of Research: The
method adopted for the study is both descriptive and analytical in nature.

Ø  Manner
of selecting the sample units:
Sample units have been selected from the branches of Assam Gramin Vikash Bank
and members of farming community (randomly selected) of 3 selected Development
Blocks of Nalbari District, Assam. The sample beneficiaries have been selected randomly from the villages
from three development blocks, namely, Paschim Nalbari Development Block, Tihu
Development Block and Barbhag Development Block. The list of sample
farmers has been taken from the concerned branch of the Assam Gramin Vikash
Bank.

Ø  Size
of the Sample:  The individual respondent constitutes of 200
samples taken from the 3 selected Development Blocks of Nalbari District on
random sampling basis.

Ø  Sources
of information: The information and data for the
study have been collected by making a sample survey with the help of a
structured questionnaire and some personal interviews among the sample beneficiaries in the Nalbari
district.

Ø  Analysis
and interpretation of Data: The analytical study of the conditions
of the farmers before and after taking the loans have been made on the basis of
the information and data collected after interviewing the sample farmers. The Primary data collected
through structured questionnaire are presented with the help of table, graphs
etc.

Periodicity
of the Study

The
periodicity of the study is from January, 2013 to December, 2014, i.e. the
study covers a period of two years.

Limitation of the
Study

The present study is mainly confined to the role
played by the AGVB for the development of agriculture sector in the
Nalbari District of Assam.

The present study is confined to only 200 sample
farmers of the Nalbari District of Assam.

The study covers only 3 Development Blocks and 25
percent of the branches of the AGVB in the Nalbari District. The 25
percent representation of the branches of the AGVB and 3 Development
Blocks in the district may not be adequate to bring out a true picture of
the role played by the AGVB for the development of agriculture sector in
the district.

There were some difficulties faced by the
interviewer at the time of interviewing the beneficiary farmers for
getting correct data because all of them do not maintain records of various
expenditures in relation to agricultural activities.

Some beneficiary farmers are reluctant in
providing data relating to their income, etc.

The number
of selected sample beneficiaries is not equal due to the variation in the
sizes/ levels of the business of the Bank branches and in the area under
the blocks.

Results and
Discussions:

1. Changes in the economic conditions of
the farmers

To have a clear picture about the changes in the economic condition of
the sample farmers a comparative analysis of their economic condition before
and after taking the loan is a must. The economic condition of the farmers in
the Nalbari district is not so good. The average land per farmers is also
nominal. The size of the holdings is very small in case of small and marginal
farmers and as such they are economically very weak. Had the farmers have
adequate irrigation facilities, their production would have been improved. The
size of holdings in case of medium and big farmers are to some extent big but
they are also lacking adequate irrigation facilities, agricultural-machineries
and equipments and technical know-how which also influence in the production of
output. Thus, due to low income the economic condition of the farmers are very
poor. If various types of agricultural-implements in relation to agricultural
development could have been sufficiently made available then economic condition
of the farmers would have been strong. Though the position of big farmers is
too some extent good still there are enough scope for further improvement.

Increase in the income of the farmers is natural after the investment of
the loan. Due to the investment of loan in agricultural activities changes in
agriculture takes place which is again results in more production whereby the
income of the farmers increases. The Table -1 clearly depicts the position of
the sample farmers before taking the loan from the Assam Gramin Vikash Bank.

Table
- 1

Position of the Farmers before the
Investment of the Loan. (Area in Acre, Income and Cost in Rs.)

Crops
Season

Area
cultivated

Cost*
for the Area cultivated

Gross
Income from the cultivated Area

Net
Income from the cultivated Area

1

2

3

4

(4-3) = 5

Kharif

5.0

28,500.00

48,000.00

19,500.00

Rabi

1.5

15,200.00

31,600.00

16,400.00

Summer

1.0

9,100.00

20,300.00

11,200.00

Total

7.5

53,300.00

99,900.00

46,600.00

*Cost of feeding
of Bullock/Cost of Plough, Cost of Seeds/Fertilizers, Opportunity cost of the
farmer, Wages and Miscellaneous expenses.

Source: Primary data collected through
questionnaire.

From the Table-1 above it is clear that a farmer earned an amount of Rs.
99,900.00 as gross income from the cultivated area. The total cost for the area
cultivated amounted to Rs.53,300.00. Thus, before taking the loan yearly net
earnings/ income of a farmer was Rs 46,600.00 on an average.

Finance is the livelihood of all economic activities. As such for the
proper development of this agriculture finance is a must to carry on various
agricultural activities. The Assam Gramin Vikash Bank has been helping its
beneficiaries by providing adequate amount of loan thereby making them capable
of investing adequate amount of finance for applying new technology for the
development of agriculture. Application of new technology in the agriculture
increases cost of agriculture but at the same time the volume of production is
also increased.

Table -2 shows the position of the surveyed sample farmers after taking
the loan from the Assam Gramin Vikash Bank.

Table -2

Position of the Farmers after the
Investment of the Loan. (Area in Acre, Income and Cost in Rs.)

Crops
Season

Area
cultivated

Cost
for the Area cultivated

Gross
Income from the cultivated Area

Net
Income from the cultivated Area

1

2

3

4

(4-3) = 5

Kharif

5.0

38,500.00

75,000.00

36,500.00

Rabi

1.5

22,800.00

55,100.00

32,300.00

Summer

1.0

12,200.00

31,300.00

19,100.00

Total

7.5

73,500.00

1,61,400.00

87,900.00

*Cost
of feeding of Bullock/Cost of Plough, Cost of Seeds/Fertilizers, Opportunity
cost of the   farmer, Wages and
miscellaneous expenses.

Source: Primary data collected
through questionnaire

From the Table -2 above it is clear that after the investment of the
loan the total gross monetary value of the total production of a farmer from
the same cultivable land increases to a total of Rs. 1,61,400.00 on an
average.  Due to the application of the
new technology the cost of production of the produces increases to Rs.73,500.00.  Thus, after taking the loan yearly net
earnings/ income of a farmer increases to Rs. 87,900.00. From the above it is
seen that after taking the loan the position of the farmers have changes
positively. If we compare the Table-1 and Table-2, we found that before the
investment of the loan yearly net earnings/ income of a farmer was Rs. 46,600.00
(after adjustment of all expenses) which increases to Rs. 87,900.00 (after
adjustment of all expenses) after the investment of the loan. So, it is seen
from the comparison of the net earnings/ income of a farmer before and after
the investment of the loan that the farmer earned an additional earnings/income
which equals to Rs. 41,300.00. Thus, we can conclude that after taking the loan
from the Assam Gramin Vikash Bank the economic condition of the farmers have
improved on an average.

Further it is found from the survey that-

8.50 percent of the farmers are doing best,

12.50 percent of the farmers are doing better,

38 percent of the farmers are doing good and

41 percent of the farmers are not doing well.

The above scenario can very well be
depicted in the form of a table and a pie chart as shown below-

Table - 3

Changes in the
economic condition of the
farmers after the investment of the loan

Percentage of
improvement in the economic condition of the Farmers

No. of Sample Farmers

Percentage

No improvement

82

41.00%

1%-50%

76

38.00%

51%-100%

25

12.50%

Above 100%

17

8.50%

Total

200

100.00%

Source: Primary data collected through questionnaire

A pictorial representation of the above
scenario is depicted here in the form of a pie chart –

From the above Table as well as the pie chart, it is clear that after
the investment of the loan taken from the Assam Gramin Vikash Bank 41 percent
of the sample farmers are not able to improve their economic condition. The
economic condition of 38 percent of the sample farmers have been improved in
the range of 1-50 percent and that of 12.50 percent of the sample farmers, improvement
in the economic condition is 51-100 percent. Further it is clear from the Table
that the economic condition of 8.50 percent of the sample farmers has been
improved above 100 percent. Thus, we can conclude that after the investment of
the loan taken from the Assam Gramin Vikash Bank the economic condition of the
majority (59 percent) of the sample farmers have been improved.

It is also found from the survey that the farmers those who are not
doing well are mainly small and marginal farmers whose interest is not to use
the loan for the development of the agriculture rather to misuse the amount of
loan. Though, about 59 percent surveyed sample farmers doing positively (good,
better, best) only 47 percent surveyed sample farmers repay the loan after the
demand made by the Bank. About 53 percent surveyed sample farmers do not think
of repaying the loan already taken.

2.   Ability of the farmers to enjoy some basic
facilities

Every people have some desire in their life
to satisfy their mind. To fulfill these desire people always try to avail some
basic minimum facilities to be enjoyed by them. These basic minimum facilities
include a dwelling house in minimum good condition, capabilities to send all
children (above 6 years of age) to school, to meet up the
medical expenses, to use pure drinking water, to have sanitation facilities, to
have balance diet, to use electricity, etc. It is found from the primary survey
that before taking the loan most (66 percent) of the farmers were not able to
enjoy these facilities because majority of the farmers belongs to poor class.
But due to the improvement in the economic condition of the farmers after the
investment of the loan taken from the Assam Gramin Vikash Bank most (55
percent) of the farmers are now capable to enjoy the basic minimum facilities
stated above.

Findings

1.
After the investment of the loan taken
from the Assam Gramin Vikash Bank the economic condition of the majority (59
percent) of the sample farmers have been improved.

2.
Due to the improvement in the economic
condition of the farmers after the investment of the loan taken from the Assam
Gramin Vikash Bank most (55 percent) of the farmers are now capable to enjoy
the basic minimum facilities.

Conclusion

The Assam Gramin Vikash Bank is for the cause of the development of
agriculture. It has been helping the farmers for the development of the
agriculture like a mother who nourishes her children for the development of
their future.

References

Grewal P.S- Rural
Banking: Vidyapuri, Balubazar, Cuttuck, 1988, p-163.

Rahman R.I. Senior
Research Fellow at the Bangladesh of development Studies (BIDS), Dhaka.

The Gazzeter of Assam,
Govt. of Assam.

PLCP, Nalbari
District.

Report Regarding the
possibility of Introducing Land and Agricultural Bank, Madras Presidency,
vol-I, 1960, (Reprint).

John D.
Block- Contemporary Reading in Agricultural Economics”1955.

Annual
Reports of Assam Gramin Vikash Bank.