Disparity of agricultural credit in India: field data evidence from farmers across social groups

Purpose - This work aims to examine the access and disparity of institutional agricultural credit for small and marginal farmers across various social groups from three Indian states. Design/methodology/approach - Field data on socio economic variables were collected using multi-stage stratified random sampling and purposive sampling through a structured questionnaire by interviewing about 400 cross sectional small and marginal farmers belonging to various social groups such as general caste, other backward caste, scheduled castes and scheduled tribes. Disparity of agricultural credit across different social groups is assessed using measures such as credit access, credit adequacy ratio, credit gap and newly constructed Agriculture Credit Disparity Index (ACDI). Findings - The credit access, credit access ratio and newly constructed ACDI suggest that, by and large, farmers belonging to socially advantaged groups have better access to institutional agricultural assistance than farmers belonging to socially disadvantaged groups. Practical implications - The agricultural credit policy of the government needs to incorporate measures to eliminate credit disparity primarily by correcting the poor socio-economic profile (especially lower asset ownership and higher illiteracy) of socially disadvantaged farmers compared to the farmers' counterparts. Originality/value - This study contributes to the existing work by providing fresh evidence from the field across social groups for both kharif and rabi crops using recent survey data from small and marginal farmers which have important policy implications.