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Impact of Access to Credit on Rental Markets of Agricultural Capital Goods: Evidence from Assam of North-East India

Author:Anup Kumar Das

Rental market of farm capital goods plays an important role in farm operations and in enhancing production and productivity of agriculture. However, owing to financial constraints, farmers, especially the small and marginal farmers, fail to participate in such markets. Therefore, the paper examines the impact of credit on participation in rental markets of agricultural capital goods. Based on the primary data collected from 232 farm households in Assam, it is found that access to credit has a primary role in encouraging the farmers to participate in rental markets of agricultural capital goods. However, different forms of credit make the rental market participation also different. Institutional credit helps in extending such markets by encouraging the suppliers of services of farm capital goods. On the other hand, non-institutional credit promotes participation in rental markets of farm capital goods both from the supply and the demand side. 

Keywords: Rental Markets, Credit, Agriculture
JEL Classification: Q12

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