Publication Date:
2013-11-22
Description:
India and China have the largest farm-household populations in the world—populations that are also among the poorest. Among the many factors that affect farm livelihoods, access to credit has been identified as a significant barrier preventing the escape from poverty. While there has been significant research on credit constraints in developing countries, there is surprisingly little information pertaining to the actual impacts of credit constraints on household well-being. The objective of this paper is to investigate the impacts of credit constraints on various factors affecting farm households, such as physical and human capital formation, agricultural inputs applications, consumption smoothing, and wage-seeking behavior using direct elicitation. This paper contributes to the literature and policy debates by comparing the effects of credit constraints in China and India as surveyed in 2008–2009. The analytical results and data demonstrate that binding credit constraints adversely affect a broad range of production and livelihood choices. We empirically show that credit constraints negatively affect food consumption, farm input applications, and health and educational attainments.
Keywords:
O13 - Agriculture
;
Natural Resources
;
Energy
;
Environment
;
Other Primary Products, O17 - Formal and Informal Sectors
;
Shadow Economy
;
Institutional Arrangements, Q12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets, Q13 - Agricultural Markets and Marketing
;
Cooperatives
;
Agribusiness
Print ISSN:
2040-5790
Electronic ISSN:
2040-5804
Topics:
Agriculture, Forestry, Horticulture, Fishery, Domestic Science, Nutrition
,
Economics
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