Impact of Agricultural credit on yield and Income of Paddy in Andhra Pradesh

An attempt has been made to assess the impact of agricultural credit on yield and income of paddy in Chittoor district of Andhra Pradesh. Andhra Pradesh is basically an agrarian economy and by producing one-tenth of India total output of food grains. Initially the agriculturists depend more on non-institutional sources for their credit requirements which used to squeeze the blood of the poor peasants by charging high rates of interest. Cooperatives are considered as the agencies for mobilization and development of rural resources in a planned and cost effective manner besides providing inputs, services and marketing facilities to the rural economy. The Cooperative Credit Societies Act 1904 permitted only to form PACS, which laid more emphasis on the promotion of agricultural credit. The Cooperative Credit Societies Act of 1912 removed the defects of 1904 Act and was made applicable to both credit and non-credit cooperative societies. The study shows the major contributor of input to the total cost was human labour, fertilizer & manure and irrigation charges for both borrower and non-borrower farmers in Chittoor district of Andhra Pradesh. The findings also showed that the cost of cultivation as well as the yield was higher in the case of borrower category compared to non-borrower category. It also confirmed that agricultural credit had positive impact on the crop production in the study area. Based on the results, appropriate policies were suggested to improve the lending system in the study area.