Why do farmers take long term loans?

Long Term Loans It encourages technological upgradation resulting in increased production, enhanced productivity and incremental income to farmers and entrepreneurs.

Why should farmers be helped to take loans from banks?

To encourage our farmers, banks in India offer loans to farmers to help them cultivate their land so they may earn a living out of it. They can also use these farming loans to purchase land and agricultural tools for the cultivation and harvesting of crops.

Why does Sapna not repay the loan?

Swapna is a small farmer and she grows groundnut on her three acres of land. She took a loan from the money lender inorder to do cultivation on her land. She is unable to repay the money lender due to crop failure and the debt grows over the year into large amount.

What was the risk in Salim’s case?

she had to sell the part of the land to repay the loan. credit instead of helping her in improving her earnings left her worse off. this is a debt trap. in salim’s case if he would not be able to prepare the shoes than he would have to pay a lots of money to bank and he would be caught in a debt trap.

What are the problems of agricultural financing?

covariance of production, market, and price risks. absence of adequate instruments to manage risks. low levels of demand due to fragmentation and incipient development of value chains. lack of expertise of financial institutions in managing agricultural loan portfolios.

Why swapna takes loan from the money lender?

Swapna is a small farmer in a village. She grows groundnut in her three acres of land. In order to meet the expenses of cultivation, she takes a loan from the moneylender with the hope that her harvest would help her in repaying the loan.

What is Swapna problem?

The reasons for Swapna’s situation being risky are (a) Failure of crop due to either poor rainfall (climate problem) or attack on the crop by pests. Pesticides will reduce or eliminate the attack by pests and good rainfall will eliminate the risk due to climate.

Why did Salim needed credit?

Salim needed credit to purchase the raw materials for the manufacture of shoes.

Why do farmers need agricultural credit?

Credit is vital to agricultural businesses because it gives farmers access to capital that might not otherwise be available to them. It helps them secure the seeds, equipment, and land they need to operate a successful farm.

What is agricultural lending?

Agricultural lending includes loans to fund the production of crops, fruits, vegetables, and livestock, or to fund the purchase or refinance of capital assets such as farmland, machinery and equipment, breeder livestock, and farm real estate improvements.