The Impact of Agricultural Credit on Agricultural Productivity in Dera Ismail Khan (District) Khyber Pakhtonkhawa Pakistan

Abstract

Agriculture is not only the backbone of our food, livelihood and ecological security system, but is also the very soul of our sovereignty. In Pakistan population density is high and has been increasing day by day and agricultural land has been decreasing because of fragmenting or converting it into residential plots. To meet the domestic food requirements use of improved production technologies developed by research is must. In this behalf government of Pakistan has been extending loan to poor farmers for adoption of new farm technology, a capital intensive technology. Therefore objective of the paper was to see impact of credit on agricultural gross domestic product. Data regarding disbursement of credit from different formal sources for different purposes and agricultural gross domestic product of major crops in study area D.I.Khan from 1990 to 2008 was collected from statistical office for crop reporting services DIK. Data was analyzed using linear regression model on The Cobb-Douglass type. Credit disbursed for seed along with fertilizers and pesticides, irrigation and tractors were found strongly correlated to agricultural gross domestic product with values 0.87, 0.58 and 0.42 respectively. Above 80% impact was of credit on agricultural gross domestic product with F = 10.752 significant at 0%.Only credit for seeds, fertilizers etc had greater role in this collective impact. At the end it was concluded that availability of credit increased agricultural production.