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Analysis of Agriculture Credit Contribution in Cotton Production of Southern Punjab, Pakistan

Analysis of Agriculture Credit Contribution in Cotton Production of Southern Punjab, Pakistan

Dilshad Ahmad1* and Muhammad Afzal2 

1COMSATS Institute of Information Technology Vehari, Pakistan; 2Faculty Department of Economics, Preston University Islamabad, Pakistan.

dilshad@ciitvehari.edu.pk  

ABSTRACT

Cotton has major contribution among cash crops in provision of raw material to local textile industry, exporting cotton lint and livelihood of cotton farmers in Pakistan. Potential productivity in agriculture is possible with introduction of advanced mechanization, which is only feasible with financial injections in this sector. The study in hand has focused the role of credit in the cotton production of southern Punjab. Simple Random Sampling technique was used in the study for selecting the respondents in both districts of cotton area. Pre-tested questionnaire was developed for the collection of data 320 cotton farmers’ respondents for the year of 2015-16 including 160-credit user and 160 non-credit users. The study employed stochastic production frontiers function for the empirical estimates of credit on cotton production. Empirical estimates of study have denoted, significant and positive coefficient of credit has positive impact on the production of cotton in both districts Rahim Yar Khan and Muzaffargarh. Credit can also play a significant role an increasing overall agriculture growth and particularly the cotton production of cotton areas. The lower mean technical efficiency in both study areas is 0.78 and 0.72 indicates cotton is not produced at potential level due to technical inefficiency of cotton farmers. Policy measures of the study will supportive to extenuating the problems concerning to small farming community in securing farming institutional credit. 

 

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Sarhad Journal of Agriculture

June

Vol. 35, Iss. 2, Pages 320-662

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