Government Policy Regarding Agricultural Loans and Its Impact upon Farmers’ Standards of Living in Developing Countries

Abstract

Orientation-This empirical research explores the impact of agricultural loans provided by the Government on the standard of living of the small farmers in developing countries where the Pakistan is taken as a case.

Purpose – The aim of the researchers in this endeavor is to identify the role of agricultural loans provided to the small farmers in the developing countries and the outcomes of these loans with respect to the standard of livings of the farmers.

Design/ Methodology- Researchers have interviewed the 300 small farmers who are all the clients of an agricultural bank (ADBP) and collect the primary data. Data was analyzed in terms of percentages and researchers investigate the impact of credit facility on the purchasing patterns of these small farmers.

Findings- Researchers analyzed the consumption patterns of the farmers in 4 sectors i.e. Structure of households before and after availing the credit facility,Change in consumption of electricity and electronic appliances, Change in education of farmer’s child, Transportation and assets and change in food and health. Research results indicate that there is increased trend in all of these 4 sectors after availing the credit facility by the small farmers.

Practical implications- Current research may be use by the other developing countries to investigate the role of agricultural loans on the well being of their farmers. It also elaborates the role of agricultural banks in enhancing the standard of living of the farmers.

Keywords: Agricultural loans, economic well being, farmers, developing countries