Agricultural credit and agricultural productivity in Bangladesh: an econometric approach.

Abstract

For a developing country like Bangladesh, ensuring food security through increased agricultural production is one of the important development goals. Providing agricultural credit to poor farmers (small, marginal and landless farmers) from formal credit sources can facilitate the timely and sufficient supply of agricultural inputs in order to promote the food production and improve the livelihoods of poor farmers. This study aims to investigate the impact of agricultural credit on agricultural productivity in Bangladesh. The empirical analysis employed annual time-series data that have been collected from Bangladesh Bank (BB), Ministry of Finance (MoF), and Bangladesh Bureau of Statistics (BBS) for the period of 2000 to 2019. This paper examined the short run and long run relationships between agricultural credit and agricultural productivity along with other control variables applying the autoregressive distributed lag (ARDL) bounds test approach. The findings of the study revealed that the short run and the long run relationships exist between the agricultural credit and agricultural productivity while the productivity of the agricultural sector also influenced by other dynamic variables like inflation, interest rate, and government expenditure on agriculture. This paper concludes that agricultural credit growth should increase to boost up the agricultural production, which would definitely be helpful in fostering economic growth in Bangladesh.