Abstract:
This study on capital productivity and role of finance in technological changes in agriculture was carried out using data collected from sample holdings selected from the second and fifth wards of Chettivilakam panchayath and first and fourth wards of Ulloor panchayath under Trivandrum Rural Block in Trivandrum district, Kerala, through multistage random sampling technique.
Two samples of size 35 each were selected, the first being that of beneficiaries of agricultural loans and the second being that of non-beneficiaries. The data collected from the two samples were analysed size group wise using production function analysis and Linear programming to estimate the productivity of capital and to generate optimum crop plans under existing and improved technologies.
Fertilizer followed by irrigation came out to be the most productive forms of capital. Labour was found to be less productive. Productivity was found to be more in the smaller farms of the beneficiary category.
Optimal crop plans developed using Linear programming had shown the potential for increasing the farm income even under the existing technology, by the re-allocation and judicious use of the existing resources. Provision of additional dose of capital showed the possibility of increasing the net farm income in substantial levels even in the existing level of technology. Adoption of improved technology with adequate capital has shown much higher potential for increasing the farm income and this increase was more in the non-beneficiary category. The credit gap for the adoption of the improved technology was also found to be more for the non-beneficiary category and in both the categories the credit gap was found to be the highest for the smallest size group.
