Impact of Agricultural Credit on Production of Wheat Crop: A Case Study of District Faisalabad-Pakistan

Agriculture sector plays an important role in the economic development of Pakistan. Wheat is an important and most cultivated crop because it is an essential ingredient of food commodities. Credit plays a vital role in agricultural farming by indirectly participating in purchasing of agricultural inputs i.e. seed, fertilizer, irrigation, machinery and labor etc. Majority of the farmers are poor and they are not able to fulfill the cash requirement of farming, therefore credit has become their dire need. Due to credit farmers can timely purchase the agricultural inputs which resulting a bumper crop. The objective of this study is to depict the impact of credit on the production of wheat crop. Survey was conducted and random sampling technique was used to select the sample borrowers. The collected data was interpreted through “Cobb Douglas Production Function” by using statistical software (SPSS 16.0). The results showed that credit has positive and significant impact on wheat production. The values of R2 and F-statistics are found significant which represented that all selected variables are highly significant. The study not only shares the importance of credit to perform any agriculture activity but also helpful for economists and policy makers for designing agri financing policies.