Agricultural credit in economically underdevelopment countries

This study is concerned with the use of agricultural credit to promote economic development, and more particularly, as a part of this general objective, to increase agricultural output and improve the economic well-being of rural populations.

In order to establish a frame of reference something must be said about the meaning of economic development and the requirements for it. This will be restricted to the barest outline, various aspects being discussed more fully in relation to the central theme.

In order to confine the study to manageable proportions, it will be concerned with peasant farming. Farming under tribal conditions or on collective farms presents different types of problems which are not considered; but occasional reference is made to condi tions in tribal societies when illustrating the problems to be ex amined and overcome in the development of co-operatives and the provision of credit. Large-scale ranches or plantations will

usually have no difficulty in obtaining the necessary finance. By economic development will be meant a continuing social process leading to a progressive increase in average output per head among the people in a society. This requires that total output increases faster than population.

We speak of a continuing process because we are concerned not with a single, once-for-all improvement which exhausts itself, but with something which goes on so that each phase contains the germs for further expansion. It is social because it requires, or results in, changes in beliefs, attitudes, relationships, institu tions and organizations not usually thought of as economic, or at least not entirely so. In any case, economic development implies important changes, not only in the relative quantities of labor, capital and natural resources, in their efficiency, and in the ratios of output to input of these factors, but also in economic structure and in economic relations.