Capital formation in farm households of Kerala - a study in Nemom block panchayat of Thiruvananthapuram district

Abstract

The present investigation on capital formation in farm households of Nemom Block Panchayat of Thiruvananthapuram district was aimed to assess the extent and nature of capital formation and to identify the constraints faced by farmers in capital formation. Two stage random sampling and stratified sampling in the third stage was adopted for the selection of 150 respondent farmers based on their size of holdings. The socio economic features, capital formation and constraints faced by farmers on the basis of income, expenditure, savings and asset structure of the farmers were studied using tabular analysis. Income from crop formed the major share of total farm income. Material expenditure and expenditure on feed formed the major share oftotal crop expenditure and livestock expenditure respectively. Out ofthe total investment in farm households, major share was occupied by land residential buildings. When land, residential buildings, vehicles and household durables were excluded, the asset structure showed that largest share of investment was on wells and tanks. The average gross capital formation in farm households was Rs.34450.44 and average net capital formation was Rs.3290.54. Major share of gross and net capital formation was on land improvement. The income, expenditure, savings, value of assets, gross capital formation and net capital formation increased with farm size. It was low (0.71) in the sample farm households because of the high value of existing asset structure. Among the Panchayats, the rate of capital formation was maximum in Kalliyoor, where farming was the major source of income of majority of sample respondents. High wage rate was the most important constraint faced by farmers followed by high cost of living. Non - availability of labour, low product price, incidence of pest and diseases, lack of interest and negative attitude of younger generation towards farming were also identified as major obstacles in capital formation in sample farm households.