IMPACT OF INSTITUTIONAL CREDIT ON FOOD GRAIN PRODUCTION IN BANGLADESH

This study is aimed at developing a theoretically consistent methodology to measure the impact of institutional credit on food grain production in Bangladesh using time series data from various government and non-government sources. This paper has made use of a multi equation model consisting of a production function and a set of input demand function to determine the impact of credit on food gain production. Elasticities of production with respect to institutional credit were found to be positive for all food grains excep Boro paddy. This suggests that credit is a catalyst in production, the increasing flow of which may result in improving the per acre productivity. The increasing flow of credit and proper utilization of the same in buying necessary inputs can bring about favourable responses in crop production.