Credit Constraint Impacts on Farm Households: Survey Results from India and China

40 Pages Posted: 4 Apr 2012

See all articles by Chandra Kumar

Chandra Kumar

affiliation not provided to SSRN

Calum G. Turvey

Cornell University - School of Applied Economics and Management

Jaclyn D. Kropp

University of Florida

Date Written: April 4, 2012

Abstract

India and China have the largest farm-household populations in the world and in many areas also the poorest. Among the many factors that affect farm livelihoods access to credit has been identified as a significant barrier. While there has been a significant literature on credit constraints in developing countries there is surprisingly little information as to the actual impacts of credit constraints on household well-being. The objective of this paper is to investigate the impact of credit constraints on various livelihood choices such as, physical and human capital formation, agricultural inputs application, consumption smoothing, and wage seeking behavior. This paper contributes to the literature and policy debates by comparing the effects between China and India using direct elicitation. The analytical results 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 inputs applications, and health and educational attainments.

Keywords: Credit Constraints, Agriculture, China, India

JEL Classification: O12, O13, O16, Q14, Q12

Suggested Citation

Kumar, Chandra and Turvey, Calum G. and Kropp, Jaclyn D., Credit Constraint Impacts on Farm Households: Survey Results from India and China (April 4, 2012). Available at SSRN: https://ssrn.com/abstract=2034487 or http://dx.doi.org/10.2139/ssrn.2034487

Chandra Kumar

affiliation not provided to SSRN ( email )

Calum G. Turvey (Contact Author)

Cornell University - School of Applied Economics and Management ( email )

248 Warren Hall
Ithaca, NY 14853
United States

Jaclyn D. Kropp

University of Florida

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