Some Operational Issues and Institutional Constraints in Lendingto Small Farmers

The small farmer, as is apparent from this term, is one whodoes not have enough land to produce more or his family labour isscarce, or he is using outdated modes of cultivation or his family feelsa compelling need for cash income from non-farming pursuits because ofstrict adherence to the traditional cropping pattern. As such, it isbecause of this typical socio-economic environment that limits thepossibility of raising his standard of living through the harnessing ofavailable limited resources to its maximum in a skillful manner.However, there is quite a difference of opinion about the definition ofwhat is a small farmer. Usually, he is taken to be synonymous with apoor farmer. A notable feature of the agrarian scene in Pakistan is thepredominance of small holdings. Small farmers, defined as those withlandholdings upto 5 hectares constitute 74 percent of the total numberof farmers in the country, though the area commanded by them is only 34percent of the total cultivable area. As against Pakistan, in Indiasmall farmers are those who own holdings upto 5 acres (or 2.02 hectare)constituting 69.9 percent of the total number of farmers in the country,though the area commanded by them is only about 21 percent of the totalarea. The area of this size in Pakistan is adequate, from the viewpointof income and productivity, to support life at subsistence level. As perinformation gathered from the field and evidence from research studiesthe average income derived from 12.5 acres (5 ha) land, varies from 7000to 16000 rupees and for land holdings of 25 acres (10 ha), it variesfrom 19,000 to 25,000 rupees, depending on farm practices carried outand the level of improved inputs used. This is the average income whichis earned by an extended family consisting of six members.