Agricultural credit and farm output linkages in India current status, issues, and prospects

This study examined trends and patterns in agricultural credit and farm output growth at the national level by using time series data from published sources from 1981-82 to 2020-21. Agricultural credit has been critical in improving farm production in India. Despite the fact that the scope and volume of agricultural lending have grown over time, even a number of flaws have crept in that have compromised the profitability and sustainability of the financial institutions. Further, a quiet transition is occurring in rural regions as a result of the changes in consumption and food habits from cereals to non-cereal items, demanding for diversification and value-adding in order to protecting jobs and incomes for rural stakeholders. There was a definite shift was identified from food grains to non-food grains, such as fruits and vegetables, oilseeds, meats, eggs and milk, whose part in output has been gradually increasing during the study period. In this context, dynamic, effective and successful agricultural financial institutions approaches are required to provide the financial needs to various areas of agricultural diversification, value addition and agro based-industries. Because, traditional approaches to agriculture that prioritized the production of food grains would only lead to agricultural stagnation, mono-cropping and distress sales in rural areas. Hence, it is important to support the production of prioritized food crops, encourage agricultural diversification, invest actively in rural infrastructure, promote food processing and value addition industries, which would open up new employment and income opportunities in rural areas.