Analysis of institutional credit for dairy farming in Karnataka: A study of Shimoga Milk Zone

Abstract

Rising income and population has led to increase in demand for milk. However, with present rate of growth in dairy sector, it is not possible to reach the estimated demand. Therefore, to lift the growth to higher trajectory, there is an urgent need to increase the productivity of animals. One of the strategies which can help achieve this task is adequate institutional credit support, which enables the farmers to invest in modern technologies. In this context present study was conducted in Shimoga Milk Zone of Karnataka to examine the pattern of dairy credit disbursement recovery performance and utilization. The study found that credit extended to dairy sector was critically low in comparison with its contribution to the economy. There was fifty per cent shortfall in achieving their set targets of credit disbursement to this sector. The recovery of the credit was also very much low in comparison to any other sectors. Analysis of utilization pattern clearly brings out that large amount of credit was diverted for unproductive purposes. Therefore, the study brings out the need of strategic policy for providing higher credit to dairy sector and also monitoring of the credit for better utilization which will further lead to better recovery.