Abstract

Agriculture is a backbone of any economy most of the population of Pakistan is directly depend
on the occupation of farming. In developing country it is major sector of economy if they want to
grow and progress they have to improve their agriculture sectors because it is base of industrial
sector. In Pakistan agriculture sector provide raw material for industrial sectors. Horticulture is
major part of agriculture citrus and many other fruits export every year. The demand of citrus is
increasing day by day in Pakistan and also in many countries. The orchard owners facing
constraints of credit for the protection their orchards from the insects and diseases. Many formal
and informal institutions are trying to help them. These institutions are commercial banks,
cooperatives, NGOs and many other government and private banks are working for provide
credit to the farmers. The main object of this study will to evaluate the impact of credit on the
productivity of citrus orchards in district Sargodha, and to find out the revenues from citrus
orchards. This proposed research is conducted through primary data of citrus orchard farmers of
district Sargodha. The sample size was 130 respondents that were used in this study. Multiple
regression models were used for analysis. The results showed that credit has positive and
significant impact on the productivity of citrus orchards in district Sargodha. And after
analyzing the data trough this econometric techniques, policy implementations of credit for citrus
orchard farmers are suggested.

Keywords: citrus, credit, orchards, productivity, commercial banks Governments, formal

institutions
Chapter-1
INTRODUCTION
Agriculture is backbone of any economy. Most of population in developing countries is directly
depend on the occupation of agricultural farming. Pakistan is blessed with abundant of natural
resources like mountains, lacks, rivers, fertile land etc. Agricultural production is based on the
best irrigation system in country Pakistan has access on the best irrigation system in all over the
Punjab. Agriculture sector provide raw material to the industrial sector for the development of
country. 66 percent population is living on the rural areas and they have dependent on the
agriculture for their livelihood.

Agriculture sector is contributing 19.8 percent in total gross domestic production (GDP).
Agriculture sector is absorbing the large unemployment labor force. Out of total labor force 42.3
percent labor are absorbing in agriculture sector in Pakistan (GOP, 2016). Small farmers have to
face many challenges in agriculture farming in inputs, seeds, irrigations etc. Government of
Pakistan is focusing to improve the productivity of agricultural crops to provide better quality of
inputs, advance technology. These facilities will increase the profit of farmers and improve their
quality of production and stander of living of lower farmers (GOP, 2016). Government of
Pakistan has announced (The Kissan Package) in September 2015 for the improvement of
agriculture productivity. In this package the prime minister has announced a mega relief package
of Rs 341 billion for the small farmers it was including the cash support and soft agricultural
loan (GOP, 2016). The farmers who are cultivate rice and cotton on the land up to 12.5 acre that
were given cash support of rupees 5000 per acre. In this relief government is bearing 20 million
costs on the cotton and rice yield (GOP, 2016). In this package also given relief on the on the
fertilizers Rs 20 million and also reduce prices of 500 per bag potassium and nitrate fertilizers. In
this relief package government has also focused on agricultural loans that will increase the
benefits around 0.3 million of household farmers. Government and state bank of Pakistan are
working on reducing the mark-up rate as 2 percent that will increase the benefit 11 billion per
annum to farmers (GOP, 2016). Zarai- tarqiati banks and commercial banks are working to
provide one-widow to facility of farmer’s loans (GOP, 2016).

The overall growth of agriculture sector in the year of 2016 was negative (-0.19) percent it was
very low growth rate as compare to the last year 2015 there was agriculture growth rate 2.53
percent. This growth rate was decline due to the decline in the important crops (-7.18) percent,
other crops decline (-0.31) percent and cotton crops decline by (-21.26) percent this decline the
overall decline and negative growth in agriculture sector (GOP, 2016-2017). Agriculture plays a
significant role in the economy of every nation as it provides basic requirements of life like food
fiber and shelter for individual.it also provide raw materials for the industries of an economy like
the many others developing countries of world agriculture in the leading causes of employment
in Pakistan.
The contribution of agriculture production in GDP has decline over many years in 1970 it was 39
percent contribution of agriculture in GDP know it is 19.8 percent contribution in the year 2015-
2016. It clearly shows that decline around 19 percent in forty five years. This decline in the
contribution in GDP cannot be neglected. This will cause the poverty and hunger in all over the
country. Importance of agriculture sector cannot be denied in the economy as it provides the raw
material for the industrial sector. The dream of strong industrial sector in any country would be
achieved to prosperous and improve in agriculture productivity. Majority of our farmers produce
at subsistence level this is a reason we cannot compete developed countries.

Pakistan is heavily based on the production of important crops that are wheat, rice, cotton and
sugarcane. These crops are 23.55 percent value added in overall agriculture and their
contribution in GDP is 4.67 percent. The other crops that are producing in Pakistan are 11.36
percent value added in overall agriculture and its contribution in GDP are 2.25 percent.
Livestock contribute in overall agriculture in 58.55 percent and contribution in GDP is 11.61
percent forestry and fisheries contribute in GDP 0.41 percent and 0.43 percent (GOP, 2016). In
Pakistan agriculture sector is consist of horticulture, agronomy and live stocks. In agronomic
crops are include cotton, wheat, sugarcane, rice and maize. These crops shares are very high in
GDP than the other crops. There are produce many other crops in Pakistan like pulses vegetables
and fruits. These crops contribution in GDP are also very high. In recent year the growth of
horticulture crops was positive as compare to the last year. The growth rate of fruits and
vegetables was 0.9 and 2.5 percent the reason of this growth was increase these prices and also
due to the better quality of seed, irrigation facility agricultural inputs and credit facility.

Horticulture crops are most important crops in agriculture sector. The environmental conditions
are more important for the cultivation of different kinds of fruits. Pakistan exports fruits in many
quantity and earned high profit from it. More than 5 billion were earned through exports of fruit
and in all fruits citrus was on third number that was exported. Pakistan has considered best
climate conditions for the cultivation of citrus fruits especially the variety of mandarin citrus
reticula (kinnow) (syed et al, 2007). Citrus fruit is cultivating in whole the world. A tree of that
variety includes oranges, lemon and grapefruits. Citrus trees are cultivated in hot countries. In
Pakistan there are various forms of citrus fruits produced in some provinces. Most of citrus fruits
are cultivated in Punjab province. Citrus has included grapefruit, mandarin, kinds of musambi,
Washington navel, succri, red blood, Jaffa, ruby red. In Punjab citrus is producing more than 95
percent and kinnow is producing 70 percent (Nawaz et al, 2007).

There was 1st study on the citrus at the University of California. Later in Punjab the research was
conducted in Faisalabad in agriculture institute and applied it on all sub-continents in 1940.
Kinnow is the sub form of oranges. The taste of kinnow and oranges are same and also have
same nature but they have some different in size and taste. Brazil is also big cultivator country
in citrus all over the world follow by china and USA. Pakistan becomes 6th largest producer of
citrus in all over the world. Because Pakistan is also hot country so it become largest producers
of citrus reticula it is a variety of kinnow .Pakistani kinnow is most famous in all over the world
and Pakistan export many verity of kinnow in the world. Ninety-five percent of the total kinnow
cultivated in Pakistan.

In Punjab which is famous for the production of citrus orchards that are district Sargodha,
Faisalabad, Lahore, Multan and Gujranwala. In Sindh province district sukkur, Nawab shah and
khairpur cultivate citrus. In province Baluchistan citrus produce in sibbi and makran. The main
area where citrus is produced in large quantity it is district Sargodha. In this area citrus is
producing in sahiwal, kotmomen, bhalwal, jhang , mianwali, multan, Rahim-yar-khan and toba
take Singh. The kinnow of Sargodha is famous in all over the world. The main earning of of
farmers of this area is to cultivate orchards. It is lees develop district of Punjab most of people
are uneducated and they are living in the rural area and they are engaged in agricultural farming.
It was main reason to select district Sargodha for this research study because there are abundance
of citrus orchards. The major varieties of citrus that are grown in this re are succri, Musami, Red
blood, mandarins which include kinnow. There are also produces other citrus fruits like
grapefruits, lemon (kaghzi lime and sweet lime). Citrus fruits cannot grown on heavily sandy
land, clay, and waterlogging land. It has required suitable land and hot temperature. Pakistan has
ideal land and weather for the cultivation of all types of fruits. Citrus session starts from
November and till end of April. In Pakistan harvesting method that used for citrus fruits is
picking method. The labors hired for piking of fruit when it will be ripe they pick the fruit with
the help of hand. It is estimated that the average yield of citrus is 500 to 1000 fruits from on tree.

The varieties of citrus that are producing in Pakistan are same variety that is producing in India.
It conquers that out of total land there are forty percent area in which citrus are cultivated in
India. The cultivation of citrus fruit in internal and western portion of India is rising each and
every year. According to the research of agriculture statistics of Pakistan produce kinnow in
thousand tons in quantity. The main charges of kinnow production is includes seed, irrigation,
environment, soil productiveness and technology. The land and climatic situation in Pakistan
have given the Kinnow at different taste which differentiates it from other associated citrus
produced in all over the worlds. Kinnow is one of the best kinds of pure and fresh mandarins.
Mostly Kinnow is in close to orange and it is same in taste. Unique quality for growing kinnow
which are producing in Pakistan include provision of water, rich nitrogen satisfied in the soil and
also cool climate. The winter session in the Punjab province is most appropriate for the citrus
and resulting fruit is sweet and it has a very special taste.
Pakistani kinnow has potential prospective of export to many countries. Pakistan exports to the
countries Saudi Arabia, Gulf state, Philippines, Sri Lanka, Afghanistan and many other countries
that are supposed as usual markets. East Europe, Iran and China are major marketplaces for
Pakistan. Vitamin C in citrus fruit muscularly improves the attraction of iron in food. kinnow and
other citrus fruit provide Vitamin C quandary to iron in the digestive zone and the iron-vitamin C
complex are absorbed together. Citrus flavonoids are also antioxidants that can resolve free
radical and may save from harm. In order to improve the quality of basic cultivation item like as
seeds, land power, fertilizer, atmosphere .government should take decision to grant better
cultivation and marketing services of citrus goods. They have to need of private support for the
progress of this agriculture zone which leads to our national income. Government should be
funding to farmer and grow up latest technology .for usage of technology country can get
maximum profit and also save the time for this former living style will be change.

With all importance of cultivation of citrus fruits it is estimated that the growth of citrus
production is going to be low in every year its quality is also decreases. The main reason of low
productivity of citrus is lack of fertilizers used in proper time, high prices of inputs which are
used in citrus. In Pakistan most of the farmers are facing allot of challenges because of budget
constraints, lack of adoption of new technologies, high prices inputs that are used in farms. The
farmers of Pakistan are poor they cannot save money in the session. This lack of budget
generates many problems for the farmers. Mostly farmers borrow some loan from their relatives
and friends this is very easy process for the farmers. Mostly farmers have need credit but they
avoid formal sources because it has many constraints like high interest rate and it is time taking
process. Agriculture sector growth is depend on these things which are increased in used of
inputs, adoption of new technologies and technical efficiency it may be achieved with the help of
proper information, better infrastructure, managerial skills (Bashir at al 2010). When citrus
orchard is cultivated in the first five years it cannot give any yield at that time farmers have more
need for credit as compare to the other farmers that are producing other crops. Credit plays
significant role in the productivity of anything.

Credit is a backbone of any business. Agriculture sector can boost up only with the help of
credit. Only rural credit is not a direct tool of production it can help to break the vicious circle of
poverty. The financial credit for agriculture can remove financial constraints and accelerate the
production and adoption of new technologies to commercialize the rural economy in overall the
world. Credit facility is necessary to adopt the new technologies. The quickest way to boost the
agriculture productivity is to access easy and cheap credit facility to the farmers. It is a prime
policy to all successive government that to provide credit to the farming community’s credit is
also necessary for the capital formations to reduce poverty and for the diversified agriculture
productivity and use new technologies better quality of seed and all other inputs. The
Agricultural productivity will increase when credit increase the income of farmers will increase
and their saving will increase also investment will increase which lead to improve in the welfare
and consequently reduction in their poverty and food insecurity. Credit provides the opportunity
to the farmers to improve their standard of living (Vogt, 1978). Credit is providing the relief of
the farmers to purchase new quality of seeds fertilizers (Yusuf, 1984). The impact of institutional
credit on the productivity is positive and significant that is found in developing countries (Iqbal
et al., 2003).
Table1.1: Credit disbursement in agriculture sector
Indicative Targets and Actual Disbursement of Agriculture Loans (Rs.
Billion) of 2015-16:
Flows
Target July-
march
2015-
Name of banks 2014-15 2015-16 2014-15
16
5 Major Comm. Banks 252.5 305.7 167.4 198.8

ZTBL 90.0 102.0 56.2 55.3

15 Domestic Private Banks 115.1 131.8 72.1 84.8

P.P.C.B.L 11.5 12.5 5.8 6.1

9 Microfinance Banks 28.2 40.1 20.7 34.5

5 Islamic Banks 2.8 7.9 3.8 6.0

Total 500.0 600.0 326.0 385.5
Sources: state bank of Pakistan

A positive development in the agriculture sector is due to the financing of different institutions
that are providing credit. The actual credit disbursement in the agriculture sector was Rs. 515.88
billion in the year 2015 there was target of credit disbursement is Rs. 500 billion. In the year
2016 the target of credit disbursement in this sector was Rs. 600 billion. This year credit
disbursement was recorded Rs. 385 billion as compare to the last year that was 326.0 billion.
There was growth in credit disbursement recorded 18.25 percent. During last 3 quarter the
agriculture credit disbursement was 64.25 percent annual as compare to the last year in this year
there was 65.25 percent. Five major commercial banks were giving credit to the farmers Rs.
195.8 billion or 65 percent of total credit that are giving formal institutions (GOP, 2016).

1. Informal Credit Source

The informal source of credit has a major role in facilitating small farmers and includes parents,
friends, dealers of the village, traders, agents of the Commission for informal source of credit etc
generally pay for a short period and responsible for interest rates very high in relation to official
sources. Loans from informal sources are inadequate and insufficient to meet the needs of
farmers.
The problem with loans from informal sources is that there is no record of such loans from
informal sources cannot be estimated. The Census of Agriculture in 2000 estimated that 65% of
the outstanding debt of all rural households have been provided by sources of non-institutional or
informal. At present, it is estimated that the requirements of 50 percent loan are met through non-
institutional sources. Commission officials and local lenders charge different brand utilization of
different products. For example, agents of the Commission by 20 percent in the case of fertilizers
and 30 percent in the case of petroleum products. Commission agents and dealers of the village
farmers operate this way and the cost of production increased by several times of poor farmers.
This is the case with the moneylenders and merchants of the village.
The informal source of credit in spite of its drawbacks is attractful to farmers for the simple
reason that there is no documentation, easy access to credit, no collateral and the availability of
credit over time.
1.2: Formal or Institutional Sources of Credit
Institutional credit in Pakistan is provided to farmers by Zari Tarqiati Bank Limited (ZTBL),
Punjab Provincial Cooperative Bank, Taccvvi (government) loans, commercial and domestic
private banks. The government has made to the growing demand for credit and allocated Rs 200
billion for 2015-2016, which was 25 percent higher than the allocation of the previous year.
On the objective of total credit of Rs 200 billion, Rs 96.5 billion has been allocated to
commercial banks, a sum of Rs 60 billion ZTBL, an amount of Rs 8 billion to Rs 35.5 billion and
PPCBL for banks national private commercial. A large amount of Rs 151.9 billion was disbursed
during 2015-016 (July-March) as it was Rs 138.6 billion during the same period last year, an
increase of 9.6 percent. Main source of credit in the country, from ZTBL has increased up to 30
percent during this period. However, the share of commercial banks has exceeded ZTBL and was
about 49 percent in the same period. The share of DPBS and PPCBL decreased and remained at
18.9 and 2.3 percent respectively (GOP, 2016).

1.2.1: Government or (Taccavi) Loans

The government has made efforts in the past to reduce the difficulties of small farmers and the
poor and small. Before independence, institutional credit was available to farmers, either in the
form of loans Taccavi, initiated by the government before the participation of cooperatives and
commercial banks in the cultures and other loans in the agricultural sector. Loans were disbursed
through Taccavi departments of provincial government revenues. They were paid to poor
farmers for production, such as buying seeds, fertilizers, etc., by agencies of income. Loans
Taccavi were also in the case of crop damage in the event of natural disasters. There was an
element of interest on loans Taccavi, and in the case of a delay in repayment, penal interest was
also taken.
1.2.2: Cooperatives
Cooperatives have been another source of credit in the formal sector. Credit unions were
established by the British government in India under the Companies Act 1904 Credit
Cooperative. The objective was to establish cooperatives to provide loans to small farmers
through their own local associations on favorable terms from other sources and to release them
from the clutches of moneylenders and grain merchants. At the time of independence,
cooperative banks failed finance companies and cooperatives have been engaged in financing
business. To further improve the lending activities and facilitate the farmers, the government
created the Federal Bank for Cooperatives (FBC) and provincial Cooperative Banks (PCBs) in
the 1970s. This was done by introducing an Ordinance 1976 entitled "Establishment of the
Federal Bank of Cooperatives and Regulation Ordinance cooperative banks." The Federal Bank
of Cooperatives (FBC) was established to meet the credit needs of the cooperative banks and
societies. It was designed as a development bank and served as an authority to regulate
provincial cooperative banks.
Cooperatives underwent various tests, such as uneven coverage, with no presence in most
villages, the lack of accountability and professional management, corruption, poor portfolio
management, and weak monitoring capacity of provincial departments of cooperation.
Cooperatives have not achieved the expected results because of the politicization and domination
by rural elites. Punjab Economic Research Institute (PERI) conducted an evaluation of credit
unions in Punjab in August 1986. One of its main findings was that only four percent of the
cooperative societies were genuine. An estimate of the subsidy dependence index (SDI), which
measures the average percentage increase of the financial institution interest rates on loans
needed to fully compensate for the removal of subsidies, found that the Bank Punjab province
has been heavily dependent on subsidies. It would have to increase interest rates on loans to 25
percent instead of 14 percent to completely eliminate the subsidy in 1994-1995.

1.2.3: Zarai Taraqiati Bank Limited (ZTBL)

In the 1950's two special schools namely the Agricultural Development Corporation Finance and
the Agricultural Bank were established in Pakistan. These two institutions were merged to form
the Agricultural Development Bank of Pakistan (ADBP) in 1961. Historically, ADBP has been
used by successive governments, loans to customers with interest rates that are below the interest
rate and competent. The Bank has revolutionized its mechanism and introduced a new village
and a customer-centric approach through the expansion of its program of supervised credit by
providing credit services to farmers by the Mobile Credit Officers (MCO). Throughout the
country to provide access in rural areas, a national network of branches and OLS has been
developed. The Agricultural Development Bank of Pakistan (ADBP) was converted into a
limited company and renamed Zarai Taraqiati Bank Limited (ZTBL) in 2002. The entire system
and structure of work ADBP has been changed. The mechanism of restructuring included the
process, system and re-engineering products, with the main emphasis being on the program
better training of current employees of the bank, the induction of a professional management
team. ZTBL restructuring was part of the reform agenda of the ADB-funded program to finance
the rural development sector. At the same time, the government also liquidated the Federal Bank
of Cooperatives (FBC). The Punjab Provincial Cooperative Bank is now the only scheduled
cooperative bank, which further operations on the ground. Other provincial cooperative banks
may be liquidated as they currently exist only on paper.

ZTBL plays key role in transforming the traditional agricultural sector into a modern and for that
purpose, he works for the transfer and dissemination of modern technology and the creation of
productive assets on farms. ZTBL offers various credit programs for lifting the agricultural
sector in countries outside of various credit schemes, some are as follows.

 Micro Credit
 General Finance
 Revolving Finance
 One Window Operation
 Development Loans
 Production Loans

1.2.4: Commercial Banks

State Bank of Pakistan takes a keen interest in providing credit facilities for agriculture, both
through the development of credit and credit lines to banks by providing development and
incentives for banks business. After the agrarian reform of 1972, the Government of Pakistan has
decided to increase the participation of commercial banks in agricultural lending. For this
purpose, the State Bank of Pakistan set specific targets for each credit that was mandatory for all
banks to complete. Currently private commercial banks compete with other institutions and
ZTBL agricultural loans and it is interesting to note that commercial banks have exceeded and
the share of commercial banks was around 49 percent in 2009. This shows that commercial
banks importance is increasing day by day and in the future commercial banks play a major role
in the agricultural loan.

Objectives

1. To find out the impact of credit on productivity of citrus orchard.

2. To find out the revenues from citrus orchard.
3. To suggest some policy recommendations according to the result.
Chapter-2

REVIEW OF LITERATURE

Maning et al. (1996) examined the informal credit market for the rural development
financing in developing countries like Pakistan. He found that informal credit is of great
importance in any rural areas of Pakistan. Government had given subsidies for organizations who
given the loans. The informal credit relations are embedded in the economic, political, and
social interaction networks of the inhabitants in the rural areas this was main fact of informal
credit. The direct relationship of farmers had become low cost of informal credit. He concluded
that the national development policy underestimate the importance of informal credit even
negated the significant importance of the informal credit. He suggested that that government
should improve the informal market in rural areas. Political action would be required for the
initiative change for this market.

Faruqee et al. (2003) studied the impact of agricultural farms credit in Pakistan. They said
both formal and in forma loans are more important factors of productivity in agriculture. Formal
lenders provide more credit as compare to informal lander however, formal loans have high cost.
The agricultural development bank (ADBP) provided 90% formal loans to the farmers in
Pakistan. There was high risk of payback of agricultural loans but government of Pakistan had
support to the formal credit schemes and was subsidies the auricular loan to the farmers in rural
areas. The secondary data was used from the large household survey data from rural Pakistan
(Rural Financial Market Studies or RFMS) to estimate the effectiveness of credit scheme of
(ADBP). A two-stage method that takes the endogeneity of borrowing into account was
used to estimate credit impact. They concluded that (ADBP) contributed to household welfare
and that its impact was higher for smallholders than for large holders. Large numbers of farmers
get bulk of loan from the (ADBP). They also concluded that (ADBP) was not cost effective
institution it can be can be improved by reducing its loan default cost
and partially by targeted smallholders in agriculture where credit yields better results.

Koenig et al. (2003) stated that the market segmentations in farm credit markets.
According to the agricultural credit market was dominated on the two institutions the retailer
lender group or the cooperative frame credit system (FCS) and second institution commercial
banks. About 70% credit was supplied from these two sectors to the farmers. The secondary data
was used from 2001-2002 from agriculture resource management survey. The market
segmentations were influenced on regulatory, legislative, structural and competitiveness of
agricultural credit. To compare these two credit institutions they used binomial logit model for
analysis of the data. When thy compared the commercial banks lending’s and (FCS) they
concluded that farm credit system was more focused on the full time commercial farms, that
were less heavily indebted, more profitable, and had greater debt repayment capacities. They
also suggested that the (FCS) was more likely to supply credit to young and beginning farmers
and to farms located in areas having access to a FCS office, but where few agricultural banks
were located.

Chaudhary and Ishfaq (2003) analyzed the credit worthiness of rural borrowers in
Pakistan. For this research they collected data from 224 rural households for the analysis of data
they used logit technique. The aim of this study was to estimate the probability of loan
repayments by borrowers. They found that interest rate do not affect the repayment behavior
significantly.

Sharma et al. (2005) examined the production and consumption of credit constrains in the
pulpiness economy. This study explores the credit constraints which are affected on the decisions
of production and consumptions of household. Rural household that were faced the credit
constraints was 65%. If the credit constraint removed the agricultural production was increase
37%. Lack of credit is also constraint for the family business production of 31% of the
households operating such businesses. They studied that the credit constraints also limited to the
consumption of household by 21%. They found that the presence of credit programs operating in
the village and proximity to commercial banks and rural banks reduced the probability of credit
constraints in production decisions. Some type of households had experienced of credit
constraints these households were with little education, households that own little or
no titled land, and sugar-producing households.

Javed et al. (2006) examined the impact of micro-credit scheme of NRSP on the socio-
economic conditions of female technique. Munity in District Rawaalkot, Azad Jamu and
Kashmir, Pakistan For this study data was collected from100 females selected from simple
random sampling and pre testing interviews were held and results were found by using SPSS
software. It was found that 48% of the respondents had received information about credit scheme
from field. 87% respondents received credit from organization and 42% of the respondents were
credit for livestock. It was concluded that micro-credit scheme had impacts” to some extent” on
the socio-economic conditions of female community. NSRP was served as a better tool for
empowering female.
Bashir et al. (2007) examined the impact of credit disbursed by commercial banks on
the productivity of sugarcane in Faisalabad District. For this purpose, they collected data from
114 loanee and non-loanee farmers from Faisalabad District. The objective of this research was
to see the impact of credit disbursed by UBL on the productivity of sugarcane. For this analysis
they used Cobb Douglas production function .From this research, they found that credit had a
positive impact on productivity of sugarcane.

Bashir and Azeem (2008) demonstrated that agriculture sector was the largest donor to
the national income (GDP). It donated 21% to the GDP and affords 43% employment to the
worker .It provided raw material to the industries of Pakistan. Credit played an important role for
achieving inputs in time and increased the production especially at a small scale. The aim of the
current study was to highlight the hurdles tackled by the small farmers. The main findings of this
study showed that small farmer faced many constraints in receiving and returning the debt which
must be eliminated for better consequences and for the betterment of the quality and quantity of
products in agricultural fields.
Michal et al. (2008) reported that agricultural loan increased the productivity in the
state of Nigeria. The study based on primary data which was collected from local government
areas. Four villages were selected randomly from these areas. Structural questionnaire were used
for collection of data 150 respondents were used for information. The study used simple
descriptive statistic for instance percentage counts, tables and frequencies. Chow test were used
for the analysis and regression analysis categories in two equations which are beneficiaries and
non-benefices of agricultural loan. The findings revealed more than 63% farmers had access of
agricultural loan and there age was 40-49 and they had educated and farming experience is 11-15
years. There are 93% farmers are non-benefices of loan from informal sources there age was 50-
59 years and they was uneducated people and they had 20 years of farming experience. They had
not aware of agricultural credit guarantee scheme. They had recommended that highlight and
expanded the awareness of auricular credit guarantee scheme to the rural farmers.

Shah et al. (2008) examined the impacts of agricultural credit on farm productivity and
income of farmers in mountainous agriculture in Northern Pakistan: The objectives of this
research were to find the impact of agriculture credit from productivity and income of farmer in
research area. A case study that was selected villages in district Chitral. They collected data were
collected from both borrowers and non-borrowers from the selected villages in the district of
Chitral during the year 2007. They used t-test for the analysis of data used SPSS software for the
analysis of data. They found from the research that there was positive relationship between
productivity and agriculture credit.
Jalil and Ying (2008) investigated that the financial development and economic growth
from Pakistan and china. This study explored the relationships of economic growth and financial
development in Pakistan and china. Secondary data was used for this study over the time period
of 1960-2005. The methodology that was applied on this study was the bound testing (ARDL)
approach to co-integration is conducted to establish the existence of a long run relationship. This
study used as proxy variables was deposit liability ratio (DLR) and credit to private sector (CPS).
They find out different results from this study the (DLR) and (CPS) both had a significant impact
on the economic growth of Pakistan where as in the case of China, (CPS) was an insignificant
impact while DLR has an insignificant effect on growth. This result may be attributed to the
inefficient allocation of Pakistan.

Adebayo and Adeela (2008) investigated the source and uses of Agricultural credit by
small scale farmers in Surulere local Government Area of Oyo state. For this research they
collected data from 120 respondents were randomly selected from twenty villages and were
interviewed structural questionnaire. From this study they found that most of respondents
obtained loans through informal sources with co-operative societies being the most popular
source. Also mobilization of farmers into formidable groups in order to enjoy the benefit of
collective investment of group saving was also recommended.

Waheed (2009) studied that does the micro finance improve the well-being of farmers in
Pakistan? He studied that consumption of farmers increased when credit facilities will increase.
The productivity increase also consumption increase when Punjab rural support programs
supports were increase to the farmers. The secondary data of six years (1999-2004) were used for
this study. Also primary data was used year of (2005). The techniques that were applied for
collection of primary data was stratified random sampling of variables credit, income, assets
education and family size. The multiple regression models were used to analysis. He concluded
that micro loans were largely given to the poor farmers and also this loan were given to the non-
poor farmers. The results showed that micro loans improve the income and education of the
farmers.

Featherstone et al. (2010) examined the effect of credit constraints on the productivity and
household income to the farmers of china. Agricultural production was converted to input to the
output it have allot of time and balance budget required during the session where high
expenditure on the purchasing of inputs and revenues was few. With Limited budget the
productivity was lower to expand the production farmers need to access the credit. Like other
developing countries the chines economy was also suffering from the lack of capital. China had
most depend on the agriculture economy it had big area of agriculture fields. Secondary data was
used to examine the impact of credit on the productivity and the income of the chines
households. They concluded that that under credit constraints, production inputs, along with
farmers’ capabilities and education, cannot be fully employed. They suggested that to remove the
credit constraints can improve the household income and productivity of farmers of china.

Tang et al. (2010) explored the formal and informal credit market and rural credit
demand in china. Credit market had essential economic institution. Credit required all economies
especially developing countries that were rapidly growing they need more credit for the
development. It should be necessary to provided credit in a time of cropping sessions. This
research focused on the evolving rural credit market in China, where borrowing from the social
network had been common but the recent economic transition had made this informal credit
market inadequate in addressing rural credit needs. The objective of this study was to identify the
social and economic factors which switched the farmers to informal credit to the formal credit
markets. The data was used from household survey and they applied methodology on this data
was both binary choice probit models and a multinomial probit model to explore the
determinants of credit market choice and credit constraints. They concluded that demand for
credit was significant on household production capacity. They also concluded that transaction
costs have a significantly negative effect on formal credit demand. They suggested that there
were three constraints off-farm employment, land size and the cost of the credit were the three
most important factors that increase the probability of being constrained.

Hassan et al. (2010) examined the impact of agricultural credit on productivity of wheat
in Pakistan. The requirement of finance in agricultural field was increasing in last few decades
due to the use of fertilizers, biocides, improved seeds, mechanization etc. the object of this study
was to check the impact of credit on the production of wheat crops in district Lahore. Primary
data was used and constructed a structural questionnaire to the data collections. United Bank
Limited (UBL) was selected to the representative of institutional credit sources to get the credit
list of the farmers of that area. The district was divided into the three strata and selects two
villages from each stratum ten credit user select from each village and non-credit user also
selected randomly for the comparison. The multiple regressions model was applied on the
collected data for analysis. They concluded that agricultural credit plays an important role in
facilitating the transformation of agriculture and raising the participation of farmers in
production process.

Kumar et al. (2010) studied that the institutional credit to agriculture sector in India. The
institutional credit played a vital role in the agriculture and development in any field. Many
agencies were involved in the disbursement of agricultural credit. The money landers had major
concern in the field credit distribution of rural area in India. The main objective of this study was
examined the performance of agricultural credit flow and had identified the determinants
of increased use of institutional credit at the farm household level in India. This study was based
on secondary data that compiled from several sources, had revealed that the institutional credit to
agriculture in real terms has increased tremendously. The major source of credit was commercial
banks in this year. They concluded that the institutional credit flow to the
agriculture had been increasing for the past four decades. The agricultural credit increased in the
agricultural field and decreases the share in the investment.

Turvey and Kong (2010) explained the association between formal and informal
loaning in China and informal loaning might influence microcredit. Lending association had
been connected with trust. The data were collected from 1500 household. Econometric technique
approved that there was a relationship between expectations and informal lending.67% of
farmers had been borrowed from their families and relations

Ayaz et al. (2011) examined the study role of agricultural credit on production of
farming sectors in Pakistan. The main objective of this study was to identify that the sources of
production of farming sectors in district Faisalabad. Primary data was used from 300 respondents
selected randomly through questionnaire in year 2009. Data envelopment analysis (DEA)
technique was used. They concluded that overall mean efficiency score was 0.78 percent. There
was 22 percent inefficiency of sample farmers. All the efficiency scores were calculated and
applied Tobit regression analysis on it. The variable that were used are farming experience,
education, access of farming credit, herd size and number of cultivation practices showed
significant effect on the farmer technical efficiency.

Ahmad (2011) studied on the impact of institutional credit on agricultural output. The
main objective of this study was to look at the role of credit in the agriculture production. He
studied that credit is indirect input in agriculture production.it helped to the farmers to
purchasing new technologies like tractors, tube wells etc. the secondary data was annual data for
the period of 1972-2008. All the data were obtained from the Ministry of Finance Division
Statistical year Book of Pakistan, Agriculture Statistics of Pakistan, and World Development
Indicators. Unit root test, Augmented Dickey-Fuller (ADF) test, (ARDL) model specification
techniques were used to analysis. They concluded that credit has positive relation with
agricultural output but has insignificant impact of credit on agricultural output and, practically,
there is no sense of the direct use of credit. Credit always helps to buy various inputs for this
sector, therefore it has indirect role.

Ayaz and Hussain (2011) demonstrated the productivity of production of the farming
sector in district Faisalabad in the Punjab province of Pakistan. The data were collected from 300
farmers for the year 2009. To analyze the data, Stochastic Frontier Analysis (SFA) method had
been applied. The total mean productivity score was 0.84 that had been indicated that 16 percent
ineffectiveness founded in farmers sample. The SFA technique also showed the limits for the
effectiveness. The experience of farmers regarding farming, awareness, availability of farming
credit and farming performs displayed positive and vital impacts on the technical efficiency of
farmers. The highest coefficient value was (-0.14) that indicated the importance of credit in the
field of agriculture and showed that the access of credit availability played a significant role in
the improvement of efficiency than any other factor.
Khan et al. (2011) examined the review of past literature on agriculture credit in rural
areas of Pakistan. The review was conducted in December 2009. The aim of this study was to
examine 25 agriculture credit studies impacts in rural areas of Pakistan ii) to observe the shortfall
and success in the field iii) to study the monitoring cell of the institution to what extent they were
working properly in the project areas iii) suggestions and recommendations for further
improvements. The study was based on secondary data and was obtained from books and
journal. Due to lack of time, 23 studies were selected for critical review on random basis from
sampling frame in District, December 2009. From this study, they found that credit not only
solve the problems of food crisis but also increase the economic growth, saving employment and
industries etc. in the country.
Aliyu and Ammani, (2012) explored that the investigation and relationship of agricultural
credit supply and productivity in Nigeria. Nigerian agriculture was basically traditional and
subsistence. Limited access to credit facility of credit had been decrees the productivity. The
federal government of Nigeria established the Agricultural Credit Guarantee Scheme Fund
(ACGSF) in 1977 to promote the formal credit for the farmers. Nigerian government had given
guarantee of the loan returns to the banks. The main objective of this study was to investigate the
relationship of between agriculture production and formal credit supply. The time series data was
used for the period 1981-2009 with SPSS results were conducted. The methodology used three
simple regression models were used to find out the relationship of output of formal credit while
all other explanatory variables constant. They concluded that formal credit was positively and
significantly related to the productivity of the crop, livestock and fishing sectors of Nigerian
agriculture. They recommended that government should continue to encourage the expansion of
formal credit sources to reach as much farmers as possible.

Girabi and Mwakaje, (2013) studied that the impact of micro finance of the small farmers
in the productivity in Tanzania. The main objective of this study was to investigate the impact of
microfinance on the agricultural productivity of small holder farmers. Over the last few decades
there was promoted to the micro finance institutions (MFI). In 1990 there were only 825 (MFI)
in 2005 which were increased in 1875. They believed that easy accesses to credit were reducing
the poverty of poor farmers. Now 5000 (MFI) were working in all over the country. 98
respondents were selected randomly to collect Primary data. These respondents were credit
beneficiaries and non-credit beneficiaries. Multiple regression models and descriptive analysis
techniques were used. They concluded that (CB) have high agriculture productivity as compare
to (NCB). Credit beneficiaries have better access of good fertilize, seeds and technologies as
compare to the non-credit users so the productivity were increased credit users. Many constraints
that were reported for the small farmers lack of information, inadequate credit supply, high
interest rates and defaulting.

Saeed et al. (2013) explored that the Islamic and conventional banks in agriculture
fencing of Pakistan. The main objective of this study was to find out the financial agri-products
that had been offered to the farmers in Pakistan by different Islamic financial institutions (banks)
and conventional banks also. This study was discussed that the facility of agricultural financing
to the farmers from the conventional and Islamic banks in Pakistan. The main purpose of these
agri-financial products to is to facilitate the farmer to develop and manage their agricultural
projects. Thy collected secondary data from the one Islamic bank and four conventional banks
randomly the data was taken from their website and also personal interviewed from these bank
managers. They concluded that the lower availability of credit they had low quality of seeds and
per acre yield would be low.

Akram et al. (2013) examined that the study of credit effect on the production of
agricultural crops. In this study they explored that economic efficiency of credit users and non-
credit users in agricultural farming was estimated in form of production. The primary data was
collected through 152 respondents from district Sargodha, technique that was applied for data
collection simple random sampling. The methodology was used frontier production function
approach. They concluded that the technical efficiency of mean of credit user was 0.90percent
and non-credit user was technical efficiency 0.79 percent in this region. The result showed that
there was high technical efficiency of credit users because of inputs availability was timely
managed. They suggested that credit had to provide farmers at a time.

S.O.W and Apata (2013) examined the impacts of farmer’s cooperative on agricultural
productivity in Ekiti state, Nigeria. For this research, they collected data from multistage random
sampling technique to select three government areas from which two villages were selected. For
the analysis of data, they used descriptive analysis tools, t-test, and correlation analysis to
determine the cooperative on farmer’s productivity. From this research, they found that farmer’s
cooperative was a viable tool towards improving farmer’s productivity.
Saad (2014) analyzed the Socio-economic effects of Micro-finance on agricultural sector:
An analysis of farmer’s standard of life Multan. For this study he collected data from 120
respondents with the help of systematic random sampling. Interview scheduled was used as a
tool of data collection. The survey method was used to study the reason that presented study
respondents were of explanatory nature than of exploratory. For the analysis simple percentages
were calculated and hypotheses were test for this purpose and it was found that micro-finance is
the source of socio-economic development of farmers.
Alam et al. (2014) examined the effect of microcredit on social, economic level and
living style of rural farmers in district Gujranwala. Majority of the people of Pakistan belonged
to the agricultural sector. Due to this reason, there was highly need to develop rural areas for the
economic development. The data were collected from the farmers who acquired the loan from
the Punjab Rural Support Program in district Gujranwala for agricultural aims. Random
sampling technique had been used to collect the data from 185 farmers. Descriptive and statistics
techniques had been applied to analyze the data. The descriptive analysis showed that there was a
positive relationship between the microcredit and socio-economies rank of farmers after getting
the loan. The microcredit availability had played a positive role in the improvement of living
standard. Chi square technique was applied to check the proposed hypothesis of the study. The
results of the chi square also demonstrated that the microcredit was very beneficial for
improvement of farmer’s Living standard.
Pervez et al. (2015) examined the impact of credit on the productivity of wheat in district
Jhang. Agriculture had a backbone of any economy it has major contribution of GDP, in
generation of employment and export earnings in the Pakistan economy. Credit has significant
importance on the productivity of any production it had increased the productivity due to
increase the credit in formal and informal sources. This study was based on the primary data
which were collected in eight villages of district jhang Pakistan. The villages were divided in
different zone and ten respondents were selected in each zone in equal number of beneficiaries
and non-beneficiaries of credit. 160 respondents were selected randomly, and Cobb Douglas
production function was used for the analysis of data. The results of this study showed that credit
has positive impact on the productivity of wheat. They concluded that 30 percent of the farmers
of credit user spend the credit on the fertilizers and seeds. 70 percent credit user farmer pended
credit on the other purposes like marriages purchased land and tractor etc. Most of credit users
borrowed from the ZTBL. Thy suggested that government should expand the institutions of
credit and should minimized the credit constraints for the farmers.

Daniel et al. (2015) studied that the contribution and assessment of commercial banks to
agriculture finance of the Nigerian economy. This study examined the contribution of
commercial banks in agricultural financing to the farmers of Nigeria. The commercial banks had
significant role of agriculture credit. They also discussed the number of challenges that had to
face the farmers for getting loan. Secondary data was used from (2002-2014) on the sectorial
distribution, liquidity ratio, loans and advance to agriculture sector, cash reserved ratio of
commercial banks and money market minimum discount rates etc. the collected data was
analyzed with statistical model using multiple regression model of ordinary least square. They
concluded that the parameter of cash reserved and discount rate was not statistically significant,
and also the parameter of liquidity ratio is not statistically significant. They also discovered that
agriculture credit was found as a decreasing function of discount rate liquidity ratio and cash
reserve, this lower the volume of agricultural credit. The y suggested that commercial banks
should rediscount their discount rate reserved ratio.

Yuan and Xu (2015) explained the conditions and limits regarding formal credit
market. The author said that poor were often disqualified for formal loaning. The resent study
was conducted in rural China to replay this statement. An active variable technique was used to
explain the possible endogeneity problems. The findings of the study highlighted that the poor
households had lower chances to inter and get informal credit. The results also revealed that the
poor people had imperfect social networking. The poor people had not any form of financial
resources to finance in their public capital to enhance their public network.
Narayanan (2015) examined the productivity of agriculture credit in India. For this
research, he collected data from period 1995-96 to 2011-2012. They used medination analysis
framework map the pathways through which institutional credit relates to agriculture GDP,
relying on a control function approach to tackle the problems of endogenity. They found that
over this period, all the inputs are highly responsive to an increase in institutional credit to
agriculture.
 Shah et al. (2015) studied the impacts of microcredit on agriculture development in
District Mastung Balochistan: A case study of Balochistan rural support programme (BRSP0.
For this research they collected data from 90% male and 10% females. The objectives of this
research were to investigate the BRSP micro credit scheme on agriculture development, to study
the role of micro credit in increasing agriculture production in the study ara and to examine the
appropriate utilization of micro credit. Pre-testing questionnaire was used for this research. For
analyzing the data social sciences (SPSS) software 17.0 was used and to examine the relationship
between dependent and independent variables. From this research they found that microcredit
had positive impact on agriculture production, household living and economic status of the
farmers.
Noonari et al. (2015) examined the impact of credit on agriculture productivity: A case
study of Zarai Taraqiati Bank Ltd (ZTBL) Loans in District Kashmore at Kandh kot, Sindh,
Pakistan. For this research they collected data from 30 loanee farmers to three selected (ZTBL)
branches and 30 non-loanee farmers in the same villages For this purpose, they used pre teting
questionnaire and 5 loanee and 5 non-loanee farmers were selected to check the sensitivity of
questionnaire.. They used regression technique to check the results by using SPSS software from
this study they found that credit had a positive impact on agriculture productivity and loanee
farmers had more margins than non-loanee farmers.
Quaye et al. (2015) studied the farmer credit delinquency in Southeastern US: Factors
and behavior prediction. For this research they collected data 10 years (3003-2012) cross-
sectional data from the USDA ARMS survey data 9phase iii). A probit approach was used to
regression delinquency against different borrowers-specific, long-specific, lender specific,
macroeconomic and climatic variables for the first part, while logistic approach was used to
regress farmer’s coverage ratio on financial variables. From this research they found that
particular farmers in what satiates are more likely to be credit worthy based on their financial
variable information.
Abdullah et al. (2015) studied the Agriculture credit in Pakistan: Post trends and future
prospects. The aim of this study was to delve the historical trend of agriculture credit flows from
formal banking and informal sector to Pakistani farmers. For this study they collected data from
the data were collected from secondary sources since 1960-61 till 2012-13. For the analysis they
used t-test to check the significance of results. They found that credit played a significant role in
the development of the economy, adoption of new technology, farm mechanization, increase in
productivity, increase in standard of living of farmers and eradication of poverty with respect to
Pakistan.
Soeleman (2015) investigated the the role of Sukut financing for sustainable development
of smallholder farmers. For this study they collected data from primary and secondary sources.
The primary data was obtained specially designed for the purpose of study such as direct
measurement of diameters and heights of teak trees whereas the secondary data was used from
the existing information such as research publications. For the analysis, they used NPV and AEV
values. They concluded that Sukruk-based profit sharing among the stakeholder’s i.e. investor,
skilled-worker, farmers, and land-owners give a better output than common fully-paid
arrangement.
Hossain et al. (2016) examined the assessment and Impact of credit program for tenant
farmers in Bangladesh. This study discussed the small marginal and landless tenant farmers that
were used credit in agricultural productivity for their livelihood based on the randomized control
trial (RCT) field experience in the Bangladesh. The secondary data were used for analysis. 20
percent of eligible household from the treatment of credit utilization and 60% loans were utilized
on the agricultural production. They concluded that credit increased the adoption of modern
seeds variety and farming productivity and income of tenants would be increased.
Chapter-3

DATA AND METHODOLOGY

This study was carried out through survey method. The discussion is mainly focused on various
aspects such as study design, sample selection, construction of measuring instrument, pilot study
or pre-testing and measures adopted during development of questionnaire to ensure its validity A
good study depends on applying suitable analytical techniques and methodology. Main objective
of developing methodology is to define or describe the tools and techniques that are used in the
collection of data. It also describes the analysis and interpretation of data related to research
problems. The scientific methodology gives us a clear guideline upon which research is based. It
should be necessary to select the study area, select sample size, data collection, application of
statistical and econometrics techniques to analyze, verify the results, carefully applied all these
practices. The major aim of this chapter is to describe all those tools and technique along with
statistical test that are used and applied in this research study. The research methodology used in
this study is as under.

3.1 Study area

Study area was selected purposively as per researcher’s suitability and relevance to research
objectives. It includes district Sargodha because it is famous for growing citrus orchards. In this
area occupation of most of populations is farming and they are growing citrus (kinnow). About
70% citrus of Punjab is produced there so this is selected for research study. District Sargodha
has seven tehsils and 186 unions.

Out of all the tehsils of district Sargodha 3 tehsils are more famous of growing of citrus orchards.
These tehsils are Sargodha, Kotmomin and Bhalwal, so these tehsils are selected for data
collection for this research study. Data was collected from those farmers who are using
credit/loan and who are not using credit or non-credit user farmers through a structural
questionnaire.
3.2 Population

The population of area will be known in which research study is conducting. The definition of
population is as including all the people that are living in specific area or place. It is very default
to get information from whole population.it will take allot of money and time taking process. So
we select sample from whole population of specific study area. This sample will be selected
randomly from the population and this sample will be representing the whole population.

The study also selects credit user and non-credit farmers in this study area. Many formal and
informal institutions give loan to the farmers for the production of citrus orchard. These
institutions are Zarai-Tarqiati-Banks, commercial banks, commission agents and factories that
are working in this area. They give loan to the farmers before session of citrus under different
securities. These institutions were selected on the basis of their credit disbursement of last year.

3.3 Sample size

Sampling is part of statistical practice, in which the selection of subset of individuals from whole
population. Sample represents the characteristics of whole population. Researchers cannot survey
the whole population because of two reasons: 1. the cost of survey is very high and 2. The
population is dynamic in the way that individuals making up population may change over time.
So the easy process is to select the small sample that will represent the whole population.

There are three most important advantages of sampling are The cost will be low, Data collection
will be faster, and data will be smaller these advantages improve the accuracy and quality of
data. The sample was taken for this study from top three tehsils of district Sargodha in which
citrus are more producing. Top producing tehsils are Sargodha, Kotmomen and Bhalwal the data
collected in these tehsils through structural questionnaire and well plan interviewed. 130
respondents were selected from this area 65 respondents are credit user and 65 respondents are
non-credit user. The list of borrowers was obtained from representative branch of banks of these
tehsils.
3.4 data collection

To achieve the aim the primary data was collected with the questionnaire and interviewed.
According to the objectives of the present study a well design questionnaire or interviewing
schedule was prepared to collect the information from the respondents. The questions that are
included in this questionnaire were covered the main issues like socio-economic characteristics
of respondents and the impact of credit on the productivity of citrus orchards in district
Sargodha.

The information was collect with the help of interview and save in the questionnaire. In the
interview schedule both qualitative and quantitative data or questions were formulated to get
required information. The questionnaire was written in the English however the questions were
asked from respondent in their local language i.e. Urdu and Punjabi. The researcher has most
effort on that not to change the meaning of questions. Before asking the question to the
respondent it will be clearly define the object of this research study that it is only use for
educational propose, So the respondents might not have any doubt in their minds in this way the
researcher won the confidence of respondents. During the interview it will be frank environment
provide for the respondents to get actual information from them. However researcher face allot
of difficulties which are not explained in words.

3.5 Interview schedule

An interview is another technique of primary data collection that involved the oral questions
which are asked to the respondents. Collection of primary data was based on the questionnaire,
but the questionnaire was written in English most of the rural farmers are illiterate so they could
not read questionnaire, so answers to the question posed during study were recorded by
interview.

3.6 pre-test of questionnaire

Pre-testing is essential for trial and error procedure in which the trial are repeated and error are
avoided in the final questionnaire. Before proceeding of this questionnaire in the field for actual
data collection it was necessary to fill some questionnaires to check the accuracy and validity of
this interview schedule. This is very important step for the data collection to pre-testing of the
questionnaire. In the light of pre-testing the errors and difficulties were avoided for the
respondents. After avoiding all mistakes and errors the questionnaire was finalized for collection
of data. Five loanees and five non-Loanees were interviewed to check the sensitivity of the
questionnaire. Another objective of this pre-testing was to ensure whether respondent really
understand the questions and yield true response. The ambiguities encountered during this trial
and error stage were carefully rectified on revision and modification of the questionnaire.
Question on the cost and production of wheat were rephrased in the light pretesting

3.7 Field experience

Data collection is very difficult task for researcher because most of the people were uneducated.
The researcher has to face much uncertain condition to get accurate information from the
respondents. The researcher had to introduce herself to the each respondent individually. He
explained the purpose of survey of the study that it was only used for educational research. Most
of the respondents are not willing to give information about them. They feel hesitation because
they think that researcher is a government agent and want to get information of their income and
expenditure. Sometime they considered that researcher will be might create problem for them by
giving the correct information about their income level to the income tax department so they give
false information of their income. The researcher has to win their trust and explain the purpose of
his educational research.

3.8 Limitations

During this study many problems and constrained were face to the refresher. Some limitations
are given below as:

1. Resources constraints

2. Time constraints
3. Lack of farm records

4. Social and psychological Barriers

3.9 Descriptive Analysis

In order to analyze the descriptive results from the collected data was find out the basic factors of
respondents. These factors are called Scio-economic factors that are analyzed by descriptive
analysis. The table was constructed through SPSS and excel. The data was collected and
tabulated in the form of percentages frequency of each individual factor.

3.10 Socio-economic characteristics of the respondents

Some of the Scio-economic characteristics were used in this study as indicators which are as
follows:

1. Gender
2. Age
3. Education
4. Marital status
5. Family size
6. Income
3.10.1 Gender

Gender is important indicator of Scio-economic characteristics of any research activity.it showed

that the comparison of household head responsibilities between male and female. In this
research study hundred percent respondents were male. In the study area the citrus grower or
producers were male so for the collection of data males are selected in this area.
3.10.2 Age

Age of respondent is also important factor of Scio-economic indicator. Household head has
different age and has different experience according to the age in production of any crepe. The
age was asked on the time of interviewed.

3.10.3 Education

Education is measured to be very important indicator which influenced respondent behavior as it

is a method of influencing the human behavior. For the present study the level of education was
determined by the number of years completed by the respondents in the educational institutions.
The education of the respondents has been categories as under:

1. Illiterate

2. Primary

3. Middle

4. Matric

5. Intermediate

6. Graduation

7. Masters

3.10.4 Marital status

The marital status of the respondents has been categories as under:

1. Single
2. Married
3. Divorced
4. Widow
3.10.5 Family size

Family size is important indicator as it is affected the socio-economic activities. It means how
many members are in households. As how much it affects the health expenditure of the
households.

3.10.6 Income

Income level of respondent is also played an important role in socio-economic characteristics of

households. Income level of the respondent plays significant role of household also impact health
expenditures. Households whose income level is high spent more money on health expenditure.

In the resent research income means the total gross earnings of respondents from all sources, as
well as from other subordinate sources if any. The income of respondents and household head
was income categories as follows:

1. Less than 15000

2. 15000-25000
3. 26000-30000
4. More than 30000

Data analysis

On the basis of objectives the data was collected from the respondents of the study area. This
data is collected from credit user farmers and non-credit user farmers. The collected data was
statistically analyzed and converted into the tables these are called descriptive analysis. The
technique that applied was averages, percentages, Mode, and standard deviation.

Averages

Average is current study were calculated through following formula:

Avg. = ∑xi /n

Where
∑xi = sum of individuals variables

n= number of observation in a particular activity

Percentages

The percentage that are used in to calculate by using following formula:

P= n/N

Where

P= percentage

n=Number of observation

N=total number of respondents

Chapter no 4
Results and discussions:
In social scientific research the interpretation, analysis and discussion have more importance.
The data has leading role in social scientific research. The main objective of this research was to
identify the impact of agriculture credit in productivity of citrus in district Sargodha. The second
objective of this study was to find out the revenues from citrus orchard and also some policy
recommendations will be contributed according to the results of this research study. The
results described in different chapters, first part of the results will be socio-economic
characteristics of credit user and non-credit users second will be agriculture profile of
respondents.

Social characteristics of credit users and non-credit users

Descriptive Statistics Results

Demographic information of respondents

Demographic Information
Minimum Maximum Average SD
Age of
Respondents(Years) 25 65 41 10.48
Education Level
(Years) 0 16 8 4.96
Family Size
(Numbers) 3 10 6 1.41
Farm Size (Acers) 2 65 18.5 12.21
Source: Authors Calculation
Age of respondents
there are 130 respondent were include In this research they are belong to distract Sargodha
and they lived in rural area where citrus are produce and also they are producing citrus in their
land minimum age of respondent who produce citrus is 25 years and maximum age of
respondent who produce citrus orchard is 65 year. Mostly farmer who produce citrus orchard
there age is 41 year this is average age of producer of this area and there standard deviation is
10.48.

Education level of farmers

The farmers have average education is middle 8 year education. There are minimum education
in this area farmers are zero this show illiterate farmers and maximum education of farmers
are 16 years education.

Table No 1:

Education level Frequency Percent

Illiterate 24 18.5
Primary 15 11.5
Middle 13 10.0
Matric 38 29.2
Intermediate 14 10.8
Graduation 19 14.6
Masters 7 5.4
Total 130 100.0
Source author own calculations:

This table shows that mostly farmer’s lies in education middle to matric about 29 percent
farmers are middle to metric. Illiterate farmers are 18.5 percent. Primary or below primary
education in farmers are 11.5 percent. Intermediate educated farmers are 10 percent.
 Education level of farmers
250

200

150

100 Percent
Frequency
50

Figure show distribution of farmers on education level

Distribution of farmers on the basis of education illiterate farmers is 18.5 percent and 11.5
present farmers have education is primary are below primary. This show that most of farmers
are uneducated and they are not aware of credit facility. Mostly farmers who has education of
matric and middle they use credit in financial institutions. Very few farmers are masters who
are working in farms.
Family size of respondents
There are minimum members of family of farmers are 3 persons and maximum family members
of farmers are 10 people. The average family members of this area are 6 members.

Family size
Table no :2

Family size Frequency Percent

24 18.0
2-4

5-7 86 64.7

8-10 23 17.3

Total 133 100.0

Source author own calculation:

This table shows the frequencies and percentages of different groups of family members of
farmers. In first group 2-4, percentage of family members show about 18 percent respondent
lies in this group. in second group average numbers of family size are lies in this group
maximum farmers family size is lies in age group (5-7). 64 percent farmer’s family size is 5-7
members according to the results. 17.3 percent farmer’s family size lies in age group 8-10
persons.
 Family size of respondents

140

120

100

80
Frequency
Percent
60

40

20

0
2-4 5-7 Total

Source author calculation:

Farm size in acre

Distribution of area in acre shows that minimum area of farmers is 2 acre and maximum area is
65 acre. The mean area in acre is 18.5. This shows that most of farmers are holding 18 acre in
this area that are producing citrus orchards.

Table No 3:

Citrus Farm Size (Acers)

Minimum Maximum Average SD

 2 65 18.5 12.5

Source author calculation:

Citrus Farm Ownership

Table No 4:

Citrus Farm Ownership

Frequency Percentage %

Owned Farm 124 95%

Hired Farm 6 5%

Total 130 100%

Pakistan is sixth largest country that produces citrus in all over the world and Pakistan is export
citrus to different country. District Sargodha is a major area were citrus is produce more here
some farmers have own land and some are hired for the production of citrus. 95 percent
farmers have own land for the production of citrus. Only 5 percent farmers hired the land for
productivity of citrus orchards. Total respondent were selected from this area are 130.this
shows that most of farmers have own land for the production of citrus.

Soil Type

Table No 5:

Soil Type

Frequency Percentage %

Sandy 1 1%

Mara 42 32%

Clay 87 67%
 Source author calculation:

This table to show the distribution of soil type of the area of this research in district Sargodha.
The results show that sandy type of land in this area is only one percent and Mara land is 32
percent and its frequency is 42. Most of the land of this area is clay. This land is most important
for the growing of citrus orchards. Clay type of land is ply significant roll on the productivity of
citrus fruits specialty for the kinnow.

Diagram:

Soil Type

1%
32%
Sandy

67% Mara
Clay

This diagram show the distribution of soil type 1 percent land is sandy research area.32 percent
land is Mara and clay land is 67 percent of research area.
Residential status of farmers
Table No2:

Residential Status

Frequency Percentage %

Owned House 125 96%

Hired House 5 4%

Total 130 100%

Source author calculation:

According to this table the residence of the farmers is distributed in to two categories first is
owned houses or their personal house and other is hired house like rented house. Mostly
people of this research area is living their own houses there percentage is 96%. And only few
people of this area are living on rented houses their percentage is 4%.
Marital status of farmers
Table No3:

Marital Status

Frequency Percentage %

Single 19 15%

Married 110 84%

Divorced 1 1%

Total 130 100%

Source author calculation:

The above table shows the marital status of farmers who were interviewed in this research
study. The single farmers are 15 percent who are growing citrus orchards and married farmers
are 84 percent in this area only 1 percent divorced farmers according to this data.

Marital status of farmers

140

120

100

80 Series1
Series2
60
Series3
40

20

0
Marital Status Single Married Divorced Total

Sources author calculation:

 Household’s characteristics:

Table No 5:

Household Characteristics
Minimum Maximum Average SD

No of School Going Kids 0 3 1 0.95

No of collage going 0 3 1 4.96

Family workers (Numbers) 1 4 1.6 0.77

Plot Size (Marla’s) 3 40 15.44 7.21

Sours: author calculation

According to this table result the minimum school going children’s of farmers is zero its mean
that most of people who are farmer their children are not going to school and maximum school
going children are 3 and average or mean of this area is one. No of college going children of
farmers minimum one chilled and maximum children are 4 and their average is 1.6. Plot sizes of
the house in Marla’s of farmers of this area are minimum 3 Marla and maximum 40 Marla’s
house in this area. The average sizes of house working farmers are 15.44 Marla’s.
Source of Credit/Loan
Total No 10:

Source of Credit/Loan
Percentage
Frequency %

Formal 80 61%

Informal 50 39%

Total 130 100%

Sources: author calculation

This table shows the distribution of source of credit in two categories first is formal sources which are
belong to some institution and banks. The other category is informal source this include the relatives
friends commissions agents or some other factories’ which are working in this area. The farmers of this
study mostly credit borrow from formal sources.61 percent farmers used banks to get loan or credit.
And 39 percent farmers are getting credit from informal sources this may be relative’s friends,
commission agents or any cooperatives source.

Diagram No 1:

Source of Credit for Citrus Farming

70%

60%
61%
50%
Percentage%

40%
39%
30%

20%

10%

0%
Percentage %
Formal 61%
Informal 39%
Loan/ Credit Information
Table No 9:

Loan/ Credit Information

Frequency Percentage %

Non-Credit User Farmers 63 48%

Credit User Farmers 67 52%

Total 130 100%

Sources: author calculation

The above table shows the frequency and percentage of farmers that get information about
loan in different sources. These sources are electronic media, print media, and from their
relatives. Credit user farmer’s percentage is 67 percent and non-credit user farmer’s
percentage is 48 percent. This shows that most of the credit user farmers gets loan from formal
or informal sources on the basses of information that he gets from different ways. This
information may help for the formers to get loan and increase their productivity of citrus
orchards.

loan/credit information
Loan/ Credit Information Frequency Loan/ Credit Information Percentage %
130

63 67

48% 52% 100%

Credit User Farmers Non- Credit User Farmers Total

Sources: author calculation

Cost of irrigation
Any agricultural activity needs irrigation facility for the better productivity. The frequent
availability of water will insure to improve the productivity and better quality of any crop. The
table shows the cost of irrigations that bear to the farmers for citrus orchards. The credit user
farmers spend more income on the orchards as compare to the non-credit user farmers group.
Irrigation cost has different cost group due the different sources of water availability. Some
farmers have an access of canal water for irrigation they are fortune because canal water has
allot of minerals that are necessary for the crops or especially for citrus orchards. Some farmers
depends their own private tube wells for the irrigation of orchards. Some have both facility of
canals and tube well for source of irrigation activity. Those farmers who have not sources of
canal water they have to need credit for private tube for the irrigation purpose. If these farmers
have not credit facility they will hardly to continue their agriculture activity. If the farmers have
both facility of water from canal and tube wells they can produce citrus more efficiently.

Table No:

Cost of Irrigation ( Per Acre)

I/Cost Range Credit User Non- Credit User

100-2500 19 30

2501-4000 24 19

4001-5500 14 14

5501-7000 4 10
Sources: author calculation

This table show that the comparison of credit user cost of irrigation and non-credit user cost of
irrigation. Per acre cost of irrigation divided into four group’s credit user bear more cost of
irrigation then non-credit user. Credit user gets credit for the irrigation purpose because they
have no facility of canal water for irrigation.
Figure:

Cost of Irrigation ( Per Acre)

10
5501-7000
4

14
4001-5500
14

19
2501-4000
24

30
100-2500
19

0 5 10 15 20 25 30 35

Non- Credit User Credit User 2 per. Mov. Avg. (Credit User) 2 per. Mov. Avg. (Non- Credit User)

This figure shows the comparison of credit users and non-credit user farmers who bear cost of
irrigation. Maximum cost bear credit user because they have not canal facility they use their
private tube wells for irrigation and the expanses of petrol going to be high o they have more
need for credit to produce citrus orchards.
Cost of Fertilizer (Per Acre)
Application of fertilizers is very necessary for the productivity of any crop, especially in current
circumstances where soil has lost its natural fertility due to extensive farming practices. So
fertilizers are applied on agriculture land for the purpose of nutrients that are being provided
through fertilizers. Many type of fertilizers are applied by the farmers, like DAP, many type of
spray were applying on orchards. The results of present study shows that maximum farmers
that are belongs to credit user group are spending different type of fertilizer on citrus orchards
and their cost is high compare to the non-credit user farmers. The farmers who are not availing
credit facility they are less in numbers and their cost is less because they spend little amount on
fertilizers.

Table No: Cost of Fertilizer (Per Acre)

Cost of Fertilizer ( Per Acre)

F/Cost Range Credit User Non- Credit User

800 10% 17%

1000 19% 33%

1200 24% 6%

1400 8% 12%
Sources: author calculation

The above table shows 10 percent credit user farmers cost of fertilizers and 17 percent non-
credit user cost of fertilizers bear 800 per acre. 19 percent credit user farmers and 33 percent
non-credit user farmers bear 1000 costs per acre. Credit user and non-credit user 24% and 6%
bear 1200 per acre cost of fertilizers.
Figure:

Cost of Fertilizers (per acre)

1400 8% 12%

1200 24% 6%
Average Cost

1000 19% 33%

800 10% 17%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

800 1000 1200 1400

Credit User 10% 19% 24% 8%
Non- Credit User 17% 33% 6% 12%

Percentage Share

Per acre cost of fertilizer

Transportation cost
Transportation cost bear to the farmers. The commission agents or middle man who purchases
the orchards from the farmers they bear the cost of transportation per acre. The conditions of
road are very poor in the research area so they have to bear high cost of transportation. The
citrus fruits are export to different big cities so the cost is increasing day by day. The fowling
results shows that both credit user and non-credit user face the cost of transportation but
credit user face high cost. 5 percent credit user and 7 percent non-credit user farmers bear
transportation cost 800 per acre.18 percent credit user and 16 percent non-credit user farmers
bear cost 1000 per acre.14 percent credit user and 19 percent non-credit user lies in 1200 cost
of transportation. Minimum farmer bear cost of transportation 1400 per acre. The detailed of
results show the following table.

Table No:

Transportation Cost (Per Acers)

T/Cost Range Credit User Non- Credit User

800 6(5%) 10(7%)

1000 22(18%) 18(16%)

1200 19(14%) 25(19%)

1400 14(10%) 16(11%)

Source: author calculation
Figure:

Transportation Cost (Per Acer)

1400 11%
10%
Per Acer T/Cost

1200 19%
14%

1000 16%
18%

800 7%
5%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Total Sample Size 130

Non- Credit User Credit User

Per acre transportation cost

Cost of harvesting (picking cost)
This is a last stage of expenses is harvesting of crops. The citrus orchards have different
production techniques and technologies. The harvesting of citrus means picking of the fruits
from the trees. This process needs more no of labor. If the citrus orchard is good in productivity
than number of fruits on one tree will more. Usually one citrus tree gives 500 to 1000 fruits.
More yelled required more labored for pick fruits from trees. It will ultimately increase cost of
picking or harvesting per acre. The table shows different cost groups for harvesting of citrus
orchard in per acre. The credit user group has maximum percentage of cost group is 5000-
10000. Non-credit user has maximum percentage at cost group of less than 5000. Its mean
credit user bear more cost of harvesting.

Table No: Harvesting Cost

Harvesting Cost

Harvesting Cost Credit User Non- Credit User

Less than 5000 9 (6%) 37(28%)

5000 to 10000 28(21%) 15(11%)

10000 to 15000 19(15%) 7(6%)

15000 to 20000 5(4%) 10(9%)

Sources: author calculation
Figure: Harvesting Cost

Credit User Non- Credit User

30%
28%

25%

21%
20%
Percentage%

15%
15%

11%
10% 9%

6% 6%
5% 4%

0%
Less then 5000 5000 to 10000 10000 to 15000 15000 to 20000
Total Sample Size 130
Area under Citrus Farms produces
Pakistan is sixth largest producers of citrus producer in the world and has a large share of
exports of citrus in many other countries. Overall production of citrus in Pakistan is 2458.4
thousand tons and area under cultivation is near about 192.3 thousand hectors. kinnow is
cultivated on area of 8.645 million hectors. The production from this area is 123.69 million tons
in Pakistan. In all over the Pakistan the major contributor of citrus is Punjab having 95 percent
share in citrus production. Almost 85 percent citrus of Pakistan is produced in Punjab.

The table shows the area of land in which citrus is produced in district Sargodha. 32 credit user
farmer produce citrus orchard in area below 10 acre and 29 non-credit user farmers grow citrus
below 10 acre. 16 credit users have 10-20 acre land in which thy produce citrus orchard and 22
non-credit user have same area of land for the production of citrus. 30 to acre are produce by
credit user only 3 credit users and 6 non-credit users. the area 40 to 50 acre have no credit use
produce and only four non-credit users farmer produce in this area.

Table No: Area under Citrus Farms

Area Under Citrus Farms

Area Credit User Non- Credit User

Below 10 Acre 32 29

10 to 20 16 22

20 to 30 10 8

30 to 40 3 6

40 to 50 0 4
Sources: author calculation
Area under Citrus Farms produces

Figure

AREA UNDER CITRUS FARMING

Credit User Non- Credit User

29 8
22
PERCENTAGE %

32 10
16
3

0
BELOW 10 ACRE 10 TO 20 20 TO 30 30 TO 40 40 TO 50
TOTAL FARMING AREA
Farming Experience of respondents
Experience of citrus orchards farmers play a vital role in increasing in total output of citrus and
ultimately income level. Experience, education, plant protection measures, fertilizers and land
preparation were contributing toward higher citrus yield and income of farmers. This table
shows farming experience of citrus farmers. The distribution among credit user and non-credit
users is quit cleared when we see the farming experience. The non-credit user are mostly those
farmers who have own land and having maximum years of experience as compare to the no-
credit users farmers.

Table No: Farming Experience

Farming Experience

Years Credit User Non- Credit User

Less than 10 18 30

10 to 15 15 20

15 to 20 9 12

20 to 25 6 2

25 to 30 7 3

30 to 40 5 3
Sources: Author calculation
Figure: Farming Experience

Farming Experiance (Years)

Credit User Non- Credit User

30
30

25

20
20
18
Number of Respondents

15
15

12

10 9

7
6
5
5
3 3
2

0
Less then 10 10 to 15 15 to 20 20 to 25 25 to 30 30 to 40
Years
Table No 1: Citrus Orchard per Acre Profitability Level:
Rate/
No of oprs/ unit
Operations/ Inputs unit/ acre (Rs.) Cost/ Acre (Rs.)
1 LAND PREPARION
1.1 Deep ploughing 0.5 3213 1606.6
1.2 Ploughing/ Cultivation 0.4 2540 1016
1.3 Planking 0.5 650 325
1.4 Leveling
2 PLANTS AND PLANTATION OPERATIONS
2.1 Number of Plants 90 35 3150
2.2 Plant Treatment Cost 90 10 900
2.3 Plantation Cost 90 10 900
2.3.1 Ploughing/ Cultivation 1 625 625
2.3.2 Planking 1 400 400

2.3.3 Charge for drill with tractor 1 625 625

3 FERTILIZER (bags)
3.1 Urea 0.3 1450 435
3.2 DAP 0.5 2500 1250
3.3 Transportation 2.5 20 50
3.4 Other Fertilizer 0.15 320 48
3.5 Potash 0.25 1800 450
3.6 FYM (# of Trolleys) 0.5 1000 500
3.4 Fertilizer application 0.5 200 100
4 PLANT PROTECTION 2 500 1000
4.1 Weedicide/ herbicide
5 IRRIGATION
5.1 Canal (water rate) 56.3
Private tube-well
5.2 (3hrz@Rs315) 2 300 600
6 LABOR FOR IRRIGATION
Labor Charges for
6.1 irrigation 1 250 250
TOTAL RS (1 TO 6) 14286.9
7 HARVESTING
Harvesting charges (40
7.1 kgs) 30 20 600
Packing charges (1/10 of
7.2 produce) 30 4 120
 Land rent for 12 months
8 @ 25000 Per Acre
Management charges for
9 12 months @13000 per
month for 100 acres 12 75 900
10 Agri. Income tax 48.52
11 GROSS TOTAL (RS) 15955.42
12 YIELD PER ACRE (Monds) 30
13 Price per mond 700
14 REVENUE 21000
15 NET PROFIT (RS) 5044.58
16 Benefit Cost Ratio(BCR) 1.31
(Source: Field Survey)
4.4: Regression Analysis for the productivity of citrus orchard
The result of multiple linear regressions for citrus orchards was presented in the table. The result
of this study showed that out of ten variables seven variables are significant at different
significant level which shows that they have impact on the productivity of citrus orchards. Their
coefficients are appropriate according to the theory. The value of intercept of the model is
10.583, which shows that when all independent variable are zero the yield of citrus per hectors is
10.53. Its t value is 43.16 which are significant at 1 percent level of significant.

Table 4.20: Regression analysis of citrus crop

Regression
Coefficients
Analysis t stat Sig.
β Std. Error
Constant 10.583 0.245 43.167 0.000***

Area of farms 0.116 0.16 7.473 0.000***

Fertilizer used 7.046 .000 0.083 0.93

Credit/loans .072 .060 1.194 0.023**

FYM cost 3.132 .000 1.3823 0.169**

Seed cost 6.185 .006 .157 0.876

Labor cost -6.010 .003 -.088 0.930

Machinery cost 8.017 .000 0.304 0.076*

Education .001 .007 0.164 0.087*

Age .002 .003 0.483 0.063*

Significance codes: *** =0.01 **=0.05 *=0.1

There are ten variable uses in this model which are revenues or productivity that are used as
dependent variable independent variable are used in this model are area of farms in which citrus
are produced, fertilizers uses potash, DAP, spray etc., credit facility use as dummy variable
where 0 means non-credit users. 1 means credit user, FYM cost, seed cost means new variety of
seed are used, labor cost, machinery cost or advance technology used, education of farmers, age
of farmers or experience of production of citrus orchard. The coefficient of the credit is 0.072
which shows that by increasing one percent of the loan amount the productivity will be 7.2 %
increase in the citrus yield. It is highly significant with a t-value of 1.194 at 5 percent level of
significance. The coefficient of credit was positive it is 0.54 and it was significant at 5 percent
level of significant that indicate the income of small farmers will increase 5 percent when 1
percent increase in credit use (javed et all, 2006). The impact of credit on the productivity of
wheat estimated that coefficient value of credit was 0.05 percent. It indicates that 1 percent
increase in credit that will increase the productivity of wheat is 5 percent it also significant at 5
percent level of significant (Ahmad at all, 2015). The results of the research findings show that
all the coefficients are having the appropriate signs which the theory explains. All the
coefficients are significant except the labor cost but the sign is appropriate with the theory.

ANOVA
The ANOVA table shows the overall significance of the model. According to the research
findings the F-value is 72.86 which highly significant. The total sum of the square is 85.69 while
regression and residual sum of squares are 73.746 and 13.220 respectively. Mean square of
regression and residual are 8.16 and 0.112. F-value is 72.86 which is significant at 1 percent
level of significant.
Table 4.21: Analysis of variance of citrus

ANOVA Sum of df Mean Square F Sig.

Square

Regression 73.746 9 8.164 72.86 .000

Residual 13.220 118 .112

Total 86.69 127

R- Square and Adjusted R-Square
R-square is 0.848 which shows that the 84 percent variation in dependent variable is due to the
independent variables and also showing almost of the impact on the dependent variable which is
acceptable in the social sciences. And remaining 16 percent variation in the model was due to
other variable or error term. The adjusted R-square is 0.836. Standard error is 0.3347 and total
respondent that were used in the model was 130.

Regression statistics
Multiple R 0.921

R Square 0.848

Adjusted R Square 0.836

Standard error 0 .3347188

Observations 130
CHAPTER 5
SUMMARY AND CONCLUSION

Agriculture is backbone of any economy. If the agriculture sector is strong of any country it can
be developed rapidly. All the developed countries have strong agriculture sector because the
agriculture sector provides basic food items which are used as basic necessities for living.
Agriculture sector provides the raw material for the industrial sector. If agriculture sector is
strong of any economy industries of that country will be in boost. When industries are strong the
country will be include in developed countries. Pakistan is less developed country most of the
population is living in rural areas and their source of earning is farming. For sustainable
development it is necessary to boost the agriculture sector. It is observed that developed nation
have more focus on agriculture sector they have to boost up in this sector with the help of
adoption of new technologies. Pakistan cannot prosper without development in this sector. Many
problems that are faced by Pakistani farmers these are lack of agricultural inputs, lack of budget
constraints, adoption of new technologies, and credit facility at proper time.

Agricultural growth is depends on the three factors increase availability of inputs, adoption of
new technologies, developed infrastructure improved managerial skills of farmers, easy
availability of agricultural credit. Credit is necessary for the adoption of new technologies,
purchasing inputs at proper time. Pakistan has improved the credit facility for the small farmers
in the recent year. Zarai-Tarqiati-Bank limited (ZTBL) plays a vital role for providing credit to
the farmers. But the role of commercial banks increased day by day. Now private banks are also
providing credit at low interest rate for the small farmers. Citrus orchards producers have more
need have credit when they cultivate new orchards. In first five years orchard of citrus gives no
yield and farmers have to spend on daily basis at that time credit is necessary for the growth of
orchards.

In all over the Punjab most of citrus were produced in district Sargodha. The climate conditions
and lands are more appropriate for the cultivation of citrus orchards. Almost 70 percent citrus are
produced in this area in all over the Punjab. So the main purpose of selected that area to check
the impact of credit on the production of citrus. District Sargodha has include seven tehsils where
most of the farmers engaged in farming sector. Four tehsil were selected from district Sargodha
these are kotmomen, bhalwal, bhera and Sargodha. Primary data were collected from 130
farmers in these tehsil which are producing citrus orchards. Half farmers selected who are using
credit and half are those who were not use credit. Cross sectional and different economic and
socio-economic variables are obtained with the help of interview. The characteristics of credit
users and non-credit user farmers were compared to the descriptive analysis. Descriptive analysis
was consisting of percentage, median, averages, tables and frequencies. The multiple regression
technique was used to calculate the impact of credit on the productivity of citrus orchards. The
main objective of the study was to find out the impact of credit on productivity of citrus fruits.
The study concluded that out of ten variables seven variables are significant at different level of
significance, which means they have positive and significant impact on the productivity of citrus.
These variables are area of farms, fertilizers used, credit, FYM cost, seed cost, labor cost,
machinery cost, education, age, per acre yield. Credit is used as dummy variable credit users are
equal to 1 and non-credit user equal to zero. Credit has significant and its coefficient value is also
positive it shows that credit has positive and significant impact on the productivity of citrus
orchards. The value of credit coefficient is 0.072 which shows that increase by one percent credit
amount in the production of citrus yield will increased by 7 percent. This model is overall
significance at F= 72.

At the end of the study it is concluded that a country like Pakistan in which majority of
population living in rural areas and they depend of agriculture farming. Government should take
step for the boost up in agriculture sectors. They introduced research and technologies for the
better quality of inputs used. In this way productivity will be increased. When production will
increase the income of farmers will also increase as the result lifestyle of farmers will improve.
this can only happen when credit facility provided to the farmers in low interest rate and without
any constraints.
 RECOMMENDATIONS

1) There is a need to train the farmers, how to properly utilize the agriculture credit to avoid
the misuse of credit as it shown by the results that most of the literate farmers are loanees
and they are gaining more benefits than the illiterate.

2) Landing procedures of the commercial banks are difficult and unaffordable for the small
farmers. So one window operation should be introduced for the betterment of rural
households.

3) Financing for the adoption of modern technology should be on subsidized markup rate.

4) Crop insurance should be introduced to minimize the hesitation of farmers to avail the
agriculture loan.
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