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on Microfinance |
| By: | Pavel Ciaian; d'Artis Kancs |
| Abstract: | This paper analyses how rising agricultural prices affect heterogenous farm production and access to inputs under credit market imperfections in the CEE transition countries. Using the FADN farm level panel data, which contains 37416 observations for 2004 and 2005, we estimate a farm credit constraint equation and find that small individual farms (IF) are more credit constrained that large corporate farms (CF). Using the estimated parameters we simulate the effect of rising input and output prices on production and input use of IF and CF farms. Our results suggest that in the presence of credit market imperfections, the relatively less credit constrained CF tend to benefit more from higher output prices than IF. Given that farms in transition and developing countries are more credit constrained than farms in developed market economies, raising food prices may actually reduce their profits and income compared to the latter. Hence, not only consumers but also agricultural producers in the developing world may loose from the increasing food prices. |
| Keywords: | Credit constraint, food prices, firm level heterogeneity |
| JEL: | Q11 Q12 P23 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2008_02&r=mfd |
| By: | Singh, Lakhwinder |
| Abstract: | Economic development theory has recognized that access to finance enables economic agents of production to exploit growth opportunities. The governments of less developed countries since world war two have been striving hard to enacting suitable policies to enable rural households in accessing timely credit. This has led to a rise in the agricultural production and productivity. The pattern of economic transformation followed by less developed countries, which has squeezed agriculture sector surpluses without reducing the burden of population dependent in such economic activities. Consequently, the borrowing generally in such kind of economic transformation process becomes burden some. The modern development process in both the rural economies of Indian and Pakistani Punjab could also not able to replace the older money-lending system, which remained excessively exploitative. This process of financing rural economic activities can be called as double squeezing of agricultural households. An attempt has been made here to examine the growth, structure and deficiencies in the rural financial systems of two Punjabs during the period 1975-76 to 2003-04. Some suggestions related to public policy for providing timely and adequate credit have also been made. |
| Keywords: | Rural Finance; Indebtedness; Economic development; Two Punjabs |
| JEL: | O1 O17 O57 |
| Date: | 2008–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11195&r=mfd |