A field of work in which people aim to improve the access of
the
agriculture industry, including farmers and all related enterprises, to efficient, sustainable
financial services.
Agricultural finance generally means studying, examining and analyzing
the financial aspects pertaining to
farm business,
which is the core sector of
Pakistan. The financial aspects include money matters relating to production of agricultural products and their disposal.
Definition of Agricultural finance:
Murray (1953) defined agricultural. Finance as “an economic
study of borrowing funds by farmers, the organization and operation of farm lending agencies and of
society’s interest in credit for agriculture.”
Tandon and Dhondyal (1962) defined agricultural. Finance
“as
a branch of
agricultural economics, which
deals with and
financial resources related
to individual farm units.”
Nature and Scope:
Agricultural finance can be dealt at both micro level and macro level. Macro- finance deals with different sources of raising funds for agriculture as a whole in
the
economy. It is also concerned with the lending procedure, rules, regulations, monitoring and controlling of different agricultural credit institutions. Hence macro-finance is related to financing of
agriculture at aggregate level.
Micro-finance
refers to financial management
of
the individual farm business units. And it is concerned with the study as to how the individual farmer
considers various sources of credit, quantum of credit to be borrowed from each
source and how he allocates the same among the alternative uses with in the farm.
It is also concerned with the future use of funds. Therefore, macro-finance
deals with the aspects relating to total credit needs of the agricultural sector, the
terms and conditions under which the credit is available and the method of use
of
total credit for the development of agriculture, while micro-finance refers to
the
financial management of individual farm business.
