JOURNAL OF COMMERCE AND MANAGEMENT RESEARCH - ISSN-2249-0442 Volume-2 Issue-1 January- 2012 JCMR Page 143 AN EMPIRICAL STUDY ON FARM LOAN CONSTRAINS FACED BY THE FARMERS IN TIRUPPUR DISTRICT, TAMIL NADU Dr.S.Saravanan Assistant Professor in Commerce with Computer Applications Dr,N.G.P.Arts and Science College Coimbatore. Prelude “India is essentially Rural India and Rural India is virtually the cultivator, the village handicraftsman and the agricultural labourer.” Rural India, where 70% of all Indians live, still depends heavily on agriculture. However, it is increasingly becoming diversified market with a strong demand for credit for agriculture and non-agricultural purposes, savings, insurance and money transfers. Taking into consideration the central role of agriculture in the Indian economy and the vast untapped potential of the sector, the scope for dispensation of institutional credit to the millions of farmers is enormous. Given the enormity of credit requirements and complexities prevalent at the ground level, financing agriculture had been a gigantic task for banks in India. Though the share of agriculture in the GDP has declined over the years due to industrialization and growth of the services sector, it still retains a very significant position in Indian economy. Farming is a way of life and principal means of livelihood for about 65% of India’s population. Source of Agricultural Credit The sources of agricultural finance are broadly classified into two categories: A. Non-institutional Credit Agencies i) Traders and Commission Agents, ii) Landlords, iii) Money lenders B. Institutional Credit Agencies i) Government, ii) Cooperative Credit Societies, iii) Commercial Banks, iv) Regional Rural Banks (RRBs), v) Micro financing Statement of the problem Considering the dominant role of agriculture in the Indian economy and the vast untapped potential of the sector, the scope for dispensation of institutional credit to the millions of farmers is enormous. Given the enormity of credit requirements and complexities prevalent at the ground level, financing agriculture had been a gigantic task for banks in India. Though the share of agriculture in the GDP has declined over the years due to industrialization and growth of the services sector, it still retains a very important position in Indian economy. Farming is a way of life and principal means of livelihood for about 65% of India’s population. The problems confronting the farmers in India today are multi-dimensional in nature. In the absence of adequate financial help, the farmers and agricultural labourers are the ready victims of money lenders and indigenous bankers who charge exorbitant rates of interest.