Some basic conflicts in rural credit (with reference to farmers' service co-operative societies)
Padki, M.B.; Gajarajan, C.S.
Indian Journal of Agricultural Economics 33(4): 84-91
1978
Document Number: 264412
This study identifies some of the basic conflicts in co-operative rural finance using data from a case study conducted in 1977 of a farmers' service co-operative society (FSS) in Karnataka, India. The study indicated that large and medium farmers reaped the benefits of the lendings of FSS, though it was meant to cater specifically to the weaker sections. While it is emphasized that the FSS has to be a business organization, the working results showed that their debts amounted to 32% with undercapacity utilization of services like that of warehouses and tractors, which seriously undermined its break-even possibility. Three alternatives are suggested to resolve difficulties: (i) setting up separate independent institutions responsible to a state institution for collecting subsidies, implementing concessions and assistance provided by the government; (ii) taking the market to the farmer's door-step, with adequate provision of credit to those who are stimulated by remunerative prices; (iii) making the borrowers feel more responsible to the lending institutions by following a policy of guided creation of co-operatives or of selective admittance of responsible members.