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Agricultural Credit and Agricultural Productivity in Bangladesh: An Econometric Approach

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  • Islam, Mohammad Mohidul

Abstract

For a developing country like Bangladesh, ensuring food security through increased agricultural production is one of the important development goals. Providing agricultural credit to poor farmers (small, marginal and landless farmers) from formal credit sources can facilitate the timely and sufficient supply of agricultural inputs in order to promote the food production and improve the livelihoods of poor farmers. This study aims to investigate the impact of agricultural credit on agricultural productivity in Bangladesh. The empirical analysis employed annual time-series data that have been collected from Bangladesh Bank (BB), Ministry of Finance (MoF), and Bangladesh Bureau of Statistics (BBS) for the period of 2000 to 2019. This paper examined the short run and long run relationships between agricultural credit and agricultural productivity along with other control variables applying the autoregressive distributed lag (ARDL) bounds test approach. The findings of the study revealed that the short run and the long run relationships exist between the agricultural credit and agricultural productivity while the productivity of the agricultural sector also influenced by other dynamic variables like inflation, interest rate, and government expenditure on agriculture. This paper concludes that agricultural credit growth should increase to boost up the agricultural production, which would definitely be helpful in fostering economic growth in Bangladesh.

Suggested Citation

  • Islam, Mohammad Mohidul, 2020. "Agricultural Credit and Agricultural Productivity in Bangladesh: An Econometric Approach," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 8(3), July.
    • Handle: RePEc:ags:ijfaec:305327
    DOI: 10.22004/ag.econ.305327
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    References listed on IDEAS

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    1. I. Omosebi Ayeomoni & Saheed A. Aladejana, 2016. "Agricultural Credit and Economic Growth Nexus. Evidence from Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(2), pages 146-158, April.
    2. Sudha Narayanan, 2016. "The productivity of agricultural credit in India," Agricultural Economics, International Association of Agricultural Economists, vol. 47(4), pages 399-409, July.
    3. Marup Hossain & Mohammad Abdul Malek & Amzad Hossain & Hasib Reza & Shakil Ahmed, 2016. "Impact Assessment of Credit Program for Tenant Farmers in Bangladesh: Evidence from a Field Experiment," CIRJE F-Series CIRJE-F-1025, CIRJE, Faculty of Economics, University of Tokyo.
    4. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    5. Bidisha, Sayema Haque & Khan, Akib & Khondker, Bazlul Haque & Imran, Khalid, 2015. "Returns to Agricultural Microcredit: Quasi-experimental Evidence from Bangladesh," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 38(4), pages 31-46, December.
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