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D ISCUSS ION

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C h a p t e r -XIIT

DISCUSSION AND TESTING OF HYPOTHESES

The r e s u l t s of t h e p r e s e n t s t u d y p r o v i d e a n i n s i g h t i n t ofa rm s t r u c t u r e , i nv es tm en t i n f i x e d c a p i t a l , c r op p in g p a t t e r n ,i nc om e a nd c o s t on c o s t c o n c e p t s o n b o r r o w e r a n d n o n- b o r ro w e r f a r m s ,u nd e r d i f f e r e n t c a t e g o r i e s o f f a r ms . The v a r i a t i o n s i n t h e economice f f i c i e n c y o f t h e saruple f a r ms , a r e t h e r e s u l t of t h e i r r e s o l i r c e s ,t h e i r u t i l i z a t i o n , a v a i l a b i l i t y of c r e d i t f a c i l i t i e s and m a n a q c r i a lc a p a c i t y . T t , t h e r e f o r e , c a l l s f o r t h e i d e n t i f i c a t i o n o f t h e p r ob le msand i s s u e r e l a t i n g t o t h e d i f f e r e n c e s i n p e r f ar m a nd p e r h e c t a r ey i e l d , i nc om e a n d i n v e s t r r e n t o n s a m p l e b o r r o w e r a n d n o n - b o r r o w e rEarms.

A f t e r t h e n a t i o n a l i z a t i o n o f 1 4 C o mm erc i al R an k s i n 1 9 6 9 ,t h e Lead Bank Scheme w a s i n t r o d u c e d on t h e r e co mm e nd a ti o n o f 9 e s e r v e

I Dank o f T nd l a f o r s t r e n g t h e n i n 5 t h e ~ n s t i t u t i o n a l C in an ce h a s ei n t h e r u r a l a r e a s . T he ba nk w hi ch ha d t h e l a r g e s t number o f b r a n c h e si n d i s t r i c t h a s g ~ v e n h e r e s p o n s i b i l i t y of Lead Bank Eor t h e d i s t r i c t .The Lead Bank Scheme was s t a r t e d i n t h e d i s t r i c t i n l u l y , 1969.The main r e s p o n s i b i l i t i e s of o pe ni ng t h e r u r a l b r a n c h e s w e r e , p r e p a r i n gt h e c r e d i t p l a n s and su pp ly o f a g r i c u l t u r a l c r e d i t t o t h e r u r a lm a s s e s .

The main i s s u e s r a i s e d f o r d i s c u s s i o n a r e a s f o l lo w s .f ( i ) What i s t h e 1.ead Bank s t r u c t u r e a nd f l o w of c r e d i t i n

d i s t r i c t Budaun ( U. P . ) ?

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( i i ) W he th er t h e Le ad Bank F i na n c e h a v e r a i s e d t h e l e v e l of7 p r o d u c t i o n , a v e r a g e y i e l d a nd i ncome i n a g r i c u l t u r e oil

s a m p l e b o r r o w e r f a r m s 7

( i i i ) Whether t h e c o s t of c r e i d t i s h i g h ?

( i v ) What a r e t h e main c o n s t r a i n t s t o t h e Lead Rank f i n a n c e. i n t h e s t u d y a r e a ?

T he s t r u c t u r e of L ead Bank ( P. N . B. ) B ud au n may b e s t a t e dt h a t t h e t o t a l number o f i t s 32 b ra nc h e s a r e o p e r a t i n g i n d i s t r i c tBudaun ( U . P . ) . Out o f w hi ch 23 b r a n c h es e x i s t i n r u r a l a r e a a ndt h e r e s t 9 a r e i n u r ba n a r e a of t h e district. R ur a l p o p u l a t i o ns e r v e d p e r b r an c h w hi ch was a b o u t 2 , 5 0 , 0 0 0 j u s t o ne y e a r b e f o r en a t i o n a l i z a t i o n i n 1 9 68 , s u b s t a n t i a l l y number come down t o 3 2, 0 00p e r b r a n c h i n 1 98 0 a nd f u r t h e r t o 1 7 , 8 0 0 i n 1 992 . S h a r e o f r u r a ld e p o s i t h a s g r a d u a l l y i n c r e a s e d from 6 . 4 p e r c e n t i n 19 69 t o 1 1 . 3p e r c e n t i r . 1980 and 1 5 p e r c e n t i n 1 99 2. T h e l e n d i n g was a l s oi n c r e a s e d Eron 3 p e r c e n t i n 1969 t o a b o u t 1 0 p e r c e n t i n 1 9 8 0a nd 1 4 . 5 p e r c e n t i n 1992 ( 2 s . 1 24 c r o r e s i n 1 96 9 t o R s . 2124 c r o r e si n 1 9 80 a n d Us. 20587 c r o r e s i n 1 9 92 ) b y t h e s c h e d u l e d c o mm e r ci a lb an ks i n c l u d i n s R e g io n a l R ur al B an ks . I n t h e s t u d y a r e a t h e p o p u l a t i o ns e r v e d p e r b r a n c h d e c r e a s e d fr om 27562 p e r b r a n c h i n 1 98 4- 85 t o20672 i n 1 9 5 3 - 9 1 .

The main q u e s t i o n t h a t now a r i s e s t o be an s w er ed i s w h e t h e rt h e c r o p and d a i r y i n g on t h e s a mp le h o us e h ol d s a r e t r a d i t i o n s 1o r modern i n s t u d y a r e a ? The t r a d i t i o n a l a g r i c u l t u r e i m p l i e s away o f l i v i n g r a t h e r t h a n a b u s i n e s s p r o p o s i t i o n , w he re p r o d l ~c t i o l :i n s u b s i s t e n c e o r i e n t e d , t h e p ro du ce b e i n g m ai n l y i n t en d ed f o r

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t h e c o ns u mp t io n by f a r m f a m i l y . T he l e v e l o f i n p u t u s e d i n s u c hs i t u a t i o n an d t h e co m b in a t i on o f c r o p and m i l k p r o d u c t i o n a r e c ho os enm ai n ly on t h e b a s i s o f what t h e sa mp le h o u se h o ld s a nd t h e i r f a m i l i e sl i k e an d owns. T h us , d u r i n g s t u d y p e r i o d i t was o bs e r v e d t h a t t h es am pl e ho u s eh o l ds w er e u s i n g m odern f ar m i n p u t s a t e x i s t i n g l e v e lo f c r o p a n d m i l k p r o d u c t i o n w hi ch w e r e l o w e r t h a n t h e re com me nde dp r a c t i c e s . T hu s, t h e a g r i c u l t u r e i n t h e s t u d y a r e a was i t s a t i n t e r -m e d i a r y s t a g e .

The i n t r o d u c t i o n o f Lead Rank i n d i s t r i c t Rudaun i n t h ey i e l d of a g r i c u l t u r a l l e n d i n g i s a new d im en si on i n t h e i n s t i t u t i o n a ls t r u c t u r e of t h e r u r a l c r e d i t . As r e g a r d s , t h e i n c e p t i o n o f P un ja bN a t i o n a l Bank ( L e ad Bank o f d i s t r i c t B u d a u n ) , t h e m ai n c- on ce ptwas t o f i l l up t h e c r e d i t n e e d s c r e a t e d a s r e s u l t of t h e s t e p st o wa r ds modern c r o p p r o d u c t i o n an d r e a r i n g q u a l i t y m i l c h b r e e d sof b u f f a l o e s . P r o v i s i o n of c r e d i t a t low c o s t , e a s y a p p ro a ch a b leand ne ar b y t h e b e n e f i c i a r i e s h o u s eh o l d . A r o l e o f c r u c i a l importancea s s i g n e d t o P .N .B ., Budaun t o b u l t a s t r o n g l i n k b et we en ba nk a ndu l t i m a t e co n s um e r , i n c a t e r i n s e f f e c t i v e l y t h e ne e ds o f r u r a l c r e d i tof t h e weak er s e c t i o n o f t h e r u r a l s o c i e t y i n d i s t r i c t Rudaun.

The t o t a l amount o f l o a n d i s b u r s e d d u r i n g t h e s t u d y p e r i o damong t h e s a m p l e h o u s e h o l d s c am e t o R s . 2 0 52 0 0. 0 0 p e r h o u s e h o l damount of l oa n was R s . 4 6 2 0 . 0 0 , R s .2 0 53 . 00 a n d R s . 1 95 3 . 00 t o m a r g i n a l ,s m a l l R medium h o u s e h o l d s , r e s p e c t i v e l y . T h e l o a n s a n c t i o n e d t ot h e s e ca t e K o r i e s of t h e s am pl e h o us e ho l ds was q u i t e i n s u f f i c i e n tf o r t h e p u r po s e .

C o n s i d e r i n s t h e i m pa c t of Pun j a b N a t i o n a l B a n k' s l e n d i n g

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on r e s o u r c e u s e , farm s t r u c t u r e , c r o p and m i l k p r o d a c t i o n , t h ev a v e r a g e s i z e of h o l d i n g was 1 .8 2 h a. i n no n- bo rr ow in g s i t u a t i o n

end 1.98 h a - d u r i n g b or ro wi ng s i t u a t i o n . T h e ave rage number OF ni1r.ba n i m a l s p e r h o u s eh o l d d u r i n g n o n- b or r ow i ng a nd bo rr ,> wi ng 3 i t u n t i o n swas 1 .26 and 1 .41 r e s p e c t i v e l y . T h i s in c r e a s e was obser ;. ed maximumon m a r q i n a l h o u s e h o l d s w hic h r o s e f ro m 0 . 9 1 t o 1 . 3 1 . An i n c r e a s i n gt r e n d was o b se r v e d i n c a s e of d r a f t a n i ma l s a l s o d u r i n g b or ro wi ngs i t u a t i o n . The p e r c e n t a s e i r r i g a t e d a r e a was 68.99 p e r c e n t on

-. b o rr o wi n q a nd 6 4 . 5 3 p e r c e n t on no n- bo rr ow in g s i t u a t i o n . T o t a li n v e s t m e n t i n f i x e d c a p i t a l was h i g h e r on b o r r ow i n g s i t r l a t i o n on+ t h e s am pl e h : u s e h o l d s . P er ha u se h ol d a v e r a q e v a l u e i n I i x e d c a p i t a lexc l .ud ing l and came to As. 37582 .62 f o r non-bor rowing and i t wasAs. 5 22 75 .4 5 f o r b o r r o wi n g s i t u a t i o n . On p e r h e c t a r e b a s i s , i twas Rs .38141 .84 and Rs .4 6 , 550 .& 4 on non-bor rowing and bor r owi ngf a m i l i e s r e s p e c t i v e l y . A l l t h e p r o d uc t io n a s s e t s i n c re a s e d d u r i n gb or ro wi ng s i t u a t i o n s . I t was du e t o t h e i mp act of c r e d i t a d r ~ a n c e iby Lead Bank ( P u n j a b N a t i o n a l B a nk ) . T h e s e f i n d i n g s a r e a l s o co nf i rm ed' w i t h t h e F i n d i n q s o f Si n gh and Mi sh r a ( 1 9 7 1 ) ~ ~nd Dadhi (1981133.

T he ma in c r o p s s r own on t h e s a m p l e h o u se h o l d s we r c wh e a t ,b a j r a , moong, g r o u n d n u t . The m a i n c a s h c r o p s Trown i n s t u d y a r e aw er e p o t a t o , g r o u n d n u t , t o r i a , moong. W ith t h e l e n d i n g f ro m Le adB an k, Budaun t o t h e s a mp l e h o u s e h o l d s , t h e r e h ad b e en a n i n c r e a s ei n t o t a l c ro ,: pe d a r e a f rom 138.80 h e c t a r e s o n n on -b or ro wi ng e i t u a t i o nt o 17 6 . 03 h e c t a r e d ur i n g b or ro wi ng s i t u a t i o n . I n c a s e of i n t e n s i t y

b o f c r o p p i n g , i t was n o t e d t h a t i n t e n s i t y of c r o p p i n g was h i gh e r' b e i n g 1 7 5. 7 7 p e r c e n t on bo r r o wi n g s i t u a t i o n an d n o n- b or r ow i on ,s i t u a t i o n , i t s t o o d a t 1 71 .4 2 p e r c e n t . T hu s, t h e c ro y? in g i n t e n s i t

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i n c r e a s e d o n b o r r o w i n g s i t u a t i o n . T h e g r e a t e r u s e o f f a r m i n p u t ss p e c i a l l y t h o s e o f f e r t i l i z e r s , i r r i g a t i o n , q u a l i t y s e e d s , c r e d i ta n d o t h e r s , h e l p e d t h e s a m p l e h o u s e h o l d s i n r a i s i n g t h e i r i n t e n s i t yo f c r o p p i n g .

T h e c r o p p i n g p a t t e r n h a s a d i r e c t i n f l u e n c e o n t h e l e v e lo f e m p l o y m e n t , w i t h t h e i n c r e a s e i n t h e p e r c e n t a g e a r e a u n d e r H . Y . V . ,c a s h c r o p s a n d i n t e n s i t y o f c r o p p i n g . T h e r e h a d b e e n a c o r r e s p o n d i n gi n c r e a s e i n t h e l e v e l o f e m pl o y m en t d u r i n g b o r r o w i n g s i t u a t i o n .O n a n a v e r a g e , t h e r e w a s 3 6 .2 3 p e r c e n t i n c r e a s e i n e m p l o ym en td u r i n g b o r r o w i n g o v e r n o n - b o r r o w i n s s i t u a t i o n i n t o t a l f a r m b u s i n e s si n c o m e . T he f i n d i n g s o f t h e s t u d y a r e a l s o p r o v e d w i t h t h e f i n d i n g so f p a s t r e s e a r c h e r s o f S i n g h c. 1 9 7 5 ) % 0 , S i n g h a n d S a i n i ( 1 9 8 8 ) 4 3 ,S h a rm a a n d Ram ( 1 9 8 8 ) 4 5 a n d S h a r m a a n d Ram ( 1 9 9 1 ) 6 0 .

As r e s a r d s , p r o d u c t i o n a n d p r o d u c t i v i t y , t h e s e w e r e d i r e c t l yr e l a t e d t o t h e l c v e l o f r e s o u r c e u s e w i t h t h e h e l p 0 6 L e a d B a n k ' sl e n d i n g i n s t u d y a r e a , t h e s a m p l e h o u s e h o l d s d u r i n g b o r r o w i n q s i t u a t i o np o s s e s s e d b e t t e r r e s o u r c e s i n c o m p a r i s o n t o n o n - b o r r o w i n g s i t u a t i o na n d mad e h i g h e r e x p e n d i t u r e o n w o r k i n g i n p u t s . T h i s r e s u l t e d i n t oi n c r e a s e d p r o d u c t i o n o f f o o d g r a i n s a n d m i . l k w h i c h i n t u r n l e a dt o h i g h e r i n co m e w h ic h r o s e f r o m R s . 1 1 2 2 5 . 2 0 d u r i n g n o n - b o r r o w i n gs i t u a t i o n t o R s . 15567.02 d u r i n q b o r r o w i n g . I t wa s t h e h i q h e s ti n c a s e o f m i l k p r o d u c t i o n d u r i n g b o r r o w i n g d u e t o t h e f a c t t h a tt h e y r e c e i v e d c r e d i t f a c i l i t i e s t o p u r c h a s e b e t t e r m i l c h b r e e df o r t h e p u r p o s e . T h e l i v i n g e x p e n d i t u r e w as a l s o o b s e r v e d t o b eh i g h e r d u r i n q b o r r o w i n s s i t u a t i o n , t h e r e b y i n d i c a t i n g b e t t e r m e n ti n l i v i n g s t a n d a r d o f t h e s a m p le h o u s e h o l d s . O n a n a v e r a g e , t o t a le x p e n d i t u r e p e r f a m i l y ca m e t o R s . 5 6 6 9 . 0 1 a n d R s .6 3 8 3 . 2 9 d u r i n g

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n on -b or ro wi ng a nd b o rr o w in g s i t u a t i o n s . T he f i n d i n g s a r e f u l l yi n c o n f i r m i t y o f A n g e l ' s l aw o f c on su mp ti on . T h us , t h e r o l e o fP u n j a b N a t i o n a l B ank ( L e a d B a nk , B ud au n) l e n d i n g on s t a n d a r d o fl i v i n g was i n p o s i t i v e d i r e c t i o n . The f i n d i n g s a r e a l s o c on f i rm edw i t h t h e f i n d i n g s o f S h a n k h a y a d J o s h i ( 1 9 7 5) 1 8 , S i n gh a nd S a i n i( 1 97 8 )2 9 , S a i n i --t a l . ( 1 9 8 8 ) & 3 , T r i p a t h i ( 1 9 8 8 ) ~ ~nd V a i d y a ( 1 9 9 1 1

As r e g a r d s c o n s t r a i n t s i n r e c ov e r y o f l o an , i t w as o b s e r v edt h a t t h e r e a s o n s f o r po or p e r f or m a nc e w er e two f o l d i . e . b o r r ow e r sa nd P u nj a b N a t i o n a l B a nk ' s b ra n ch l e v e l s t a f f . On b o r r o w e r ' s s i d e ,t h e r e we r e s o many c omplex F a c t o r s l i k e n a t u r a l c a l a m i t i e s , p o o rr e t u r n s , f a i l u r e o f c r o p s , u n r e a l i s t i c r ep a yme nt s c h e d u l e , a nno u n c e-ment o f W r i t e - o f f o f l o a n , e nd em ic d i s e a s e s l i k e f o o t a n d m ou th ,r i n d e r - p e s t a nd h a e mo r rh a gi c s e p t i c a m a i e t c . i n c a s e o f d a i r y l o ane t c . On t h e o t h e r s i d e , i . e . P u nj a b N a t i o n a l B a nk 's b r a nc h l e v e ls t a f f , i t was o b s er v e d t h a t t h e r e was un - n e c e s s ar y d e l a y i n d e l i v e r yo f l o a n , wrong i d e n t i f i c a t i o n o f b e n e f i c i a r i e s , p r e s e n c e o f c o r r u p tp r a c t i c e s a t b r an ch l e v e l , u n s u i t a b l e r e c o ve r y p e r i o d f o r c r o pl o a n , a b s e nc e o f p r e and p os t v i s i t t o e v a l u a t e t h e r e p a y i n g c a p a c i t yan d en d - u s e o f l o a n . S t u d y h ad shown t h a t t h e b a n k s t a f f a t branc.hl e v e l was b i a s e d a nd a g a i n s t t h e p oo r and t h e i r n e e d s .

To overcome t h e s e c o n s t r a i n t s , t h e r e i s a n eed o f s t r u c t u r a lch an g e i n P u n j a b N a t io n a l B a nk ' s , a t b r an c h , d i s t r i c t and s t a t el e v e l , p r o p e r p r om ot io n a nd t r a n s f e r p o l i c y may h e l p i n r ed u c i n gt h e s e c o n s t r a i n t s w i t h c o o r d i n a t i o n . The c r e d i t p l a n m u s t b e b e n e f i c i a r ys p e c i f i c and n o t a r e a o r b l o c k s p e c i f i c w i t h t h e i n t e g r a t i o n oft h e i r n ee d s. O v e r a l l t h e p ro bl em of r u r a l pe o p l e p r e s e n t l y i s n o tt h e qu an tu m of c r e d i t ( Th ou gh t h a t i s i m p o r t a n t ) b u t t o make s u r e

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t h a t t h e c r e d i t p r ov id ed i s u se d s e n s i b i l y and p r o b i t y .. T he l o q i c a l c o n c l u s i o n t h a t may b e drawn f ro m t h e f i n d i n g so f t h e s t u d y t h a t d i s t r i c t Budaun o f U.P. i s p oo r i n b a s i c i n f r a -s t r u c t u r a l f a c i l i t i e s , l a c k o f i n d u s t r i e s and t h e f a r m e r s w e r ee n sa g in g i n t r a d i t i o n a l o r i n t e r m ed i a r y a g r i c u l t u r e . They w er eo p e r a t i n g rlnder i n c r e a s i n s r e t u r n s t o s c a l e t o a l i m i t e d e x t e n t .R o l e o f P u n j a b N a t i o n a l B a n k ' s ( Le a d B an k, Budarln) l e n d i n q o n t h eu se of f e r t i l i z e r , i r r i g a t i o n , q u a l i t y s e e d s , p l a n t p r o t e c t i o n

7 m e as u re s an d p u r c h a s i n g h i g h y i e l d m i l c h b r e e d o f b u f f a l o was o b s e r v e d1 i n p o s i t i v e d i r e c t i o n i n a b s o l u t e t er m w hi ch r e s u l t e d m or e in co m e,

e mp lo ym en t a nd i m pr ov em en t i n l i v i n g s t a n d a r d . T he c r o p p r o d u c t i o nthough i n c r ea s ed i n a b s o l u t e t erm b u t t h i s i n c r e a s e was s t a t i s t i c a l l yi n s i g n i f i c a n t . M i lk p r o d u c t i o n , i nco me a nd em pl oym en t on m a r q i n a lh ou se ho ld s i n c r e a s e d i n b o th i n a b s o l u t e te rm and was a l s o s t a t i s t i c a l l ys i g n i f i c a n t . T h u s, t h e r o l e o f P u n j ab N a t i o n a l Bank ( Le nd H an k,Bu da un ) on c r o p p r o d u c t i o n a nd d a i r y d ev e lo p me n t was p o s i t i v e .

TESTING OF HYPOTHESES

On t h e b a s i s of f i n d i n g s and d i s c u s s i o n on d i f f e r e n ti s s u e s of t h e s t u d y , t h e h y po t he s es d ev el op ed f o r t h e p r e s e n t s t u d yw e re f o un d t o b e p r o v e d .1 . The f i r s t h y p o t h e s i s , t h a t ' t h e b o rr o wi n g f rom Lead Rank

( P u n j a b N a t i o n a l B an k) h a s b r o u g h t c h a n g es i n r e s o u r c eu s e , i nco me a nd em pl oy men t o f b e n e f i c i a r i e s " was c on f i r m e da s p c r t h e f i n d i n g s q i ve n i n C h ap t e r V I I I & X .T he se co nd h y p o t h e s i s t h a t " t h e i m p a c t o f P un ja b N a t i o n a lB a n k ' s 1e n d i ng on c r o p p r o d u c t i o n a n d d a i r y d e v el op me nt

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i s p o s i t i v e t o some e x t e n t " w as a l s o f ound t o b e v a l i da s p e r f i n d i n g s of C h a p t er X .

3 . The t h i r d hy p o t he s i s t h a t " t h e r e c o v er y p o s i t i o n o f c r e d i tadvanced by Lead Bank i s p oo r i n t h e s t u d y a r e a " waselso found t o b e t r u e a s p e r f i n d i n g s g i v e n i n C h a p t er V .

4 . The 4 t h h y po t h e s i s t h a t " t h e c r e d i t g a p be twe en t h e c r e d i tn ee ds and i t s a v a i l a b i l i t y t o b e n e f i c i a r i e s " was c o n f i r m e da s p e r f i n d i n s s g iv en i n Ch ap t er XI.