Utilisation and Repayment of Agricultural Credit-The Case of Madurai District, Tamil Nadu

The present paper attempts to examine and analyse the extent of utilisation and the repayment of agricultural credit by the farmers in Madurai district of Tamil nadu. It was carried out with both the primary and the secondary data. Secondary data required for the present study were collected and compiled for a period of 13 years, that is, from 2000 to 2012. A well designed interview schedule was developed and used to collect the required data from 350 sample farmers selected from the study area by adopting the convenient sampling technique. The Percentage Analysis, Linear Trend Model, Semi-log Trend Model and the Factor Analysis Approach were employed to analyse the data. The results of the paper show that a large proportion of the respondents have fully and properly utilised the loan amount and the delay in getting loan was identified as the main reason for misutilisation of the loan amount. Though full and proper utilisation of the loan amount is made by a vast majority of the sample farmers, the other side of the coin presents a gloomy picture as full and prompt repayment is made by only less than 30 per cent of beneficiaries. The fall in income from agriculture is cited as the primary reason for the partial repayment made by most of the farmers. Of various factors leading to the non-repayment of the agricultural credit, exorbitant irrigational expenses, monsoon failures, crop failures, low returns for agricultural produce, and high cost of inputs are found to be the most influencing ones.