Читать книгу Promoting Investment in Agriculture for Increased Production and Productivity - Saifullah Syed - Страница 12

All agricultural investors, regardless of their size or the country, require the capacity to make investments and an environment that enables them to do so.

For farmers, their capacity to invest is determined by their main sources of investment finance: their own savings and their fixed capital, which is used as collateral for credit. Capital formation is certainly higher for farming households with positive savings. In the countries where the levels of poverty and hunger are high, the average farmer does not have any savings. In India and Bangladesh, more than 80% of the farming households demonstrate negative savings and take out loans just to cover their consumption. In recent years, remittances from migrating family members have contributed to increasing investment in agriculture. However, policies to provide credit to small and marginal farmers, who do not have adequate collateral, have not had the desired success.

Migration and remittances have recently become a main source of rural household income in many developing countries. They were found to be an important source of investment in agriculture for the development of family farming and particularly for making the shift from subsistence agriculture to market-oriented production. Migration is predominantly a family decision. It is the family that decides whom to send, mobilizes the cost of migration and, in return, receives remittances for the wider benefit of the family. However, it should be noted that large part of remittances are used for immediate consumption, health and education. Only a small proportion, around 10–12%, is invested in agriculture.