Assessing the Impact of Credit on Rice Production and Food Security on Farm Households in Bangladesh

This study examines the impact of agricultural credit on rice production and food security of the farm households in Bangladesh. A sample size of 50 households was selected purposively from two villages that were getting agricultural credit from Bangladesh Krishi Bank. Data were collected through field survey by using pre-designed and pre-tested questionnaire. Multiple regression analyses were carried out to determine the impact of credit on rice production calorie intake in household and individual levels. Cross-elasticity of demand technique was used to determine the impact of credit on inputs demand. It is revealed from the study that credit has a positive impact on the rice production. Elasticity of rice production with respect to agricultural credit was 0.85 which indicated that if credit was increased by 10% the rice production increased by 0.85%. The elasticity of fertilizer and irrigation demand with respect to agricultural credit was 0.89 and 0.82, respectively. About 50% of the respondents belonged to ultra poor whose per day calorie intake was 1541.39 kilo calorie. Twenty percent of the respondents had an average calorie intake 2021.08 kilo calorie. The rest 12% of the respondents were consumed above 2122.00 kilo calorie. The Bangladesh Krishi Bank has provided the loan only for rice production. But it was found that only 44.77% of the loan was used for rice production and 5.71% was used for food consumption. Credit was found to have positive impact on caloric intake. The elasticity of caloric intake with respect to agricultural credit was 0.09. Government & non-government organizations, donor agencies, specialized banks and private organizations should extend agricultural loans to increase rice production and food security of rural poor households in Bangladesh.