Determinants of Capital Formation in Agriculture: A Case Study of Dimapur District of Nagaland, India

Abstract

The formation of capital through investment in agriculture helps build up the stock of capital assets and resources that enable the farmers to utilize their resources, particularly land and labour, more efficiently. The present study includes a total sample of 200 farm households consisting of marginal, small, medium, and large farmers from Dimapur District of Nagaland, selected through a three-stage stratified sampling technique for the year 2020-21. Using multiple regression technique assessed the factors that affect the capital investment at the farm level. The coefficient of determinant (R2) value reveals that the model as good fit. Many factors influence the formation of capital in agriculture, among which family income (in `), working members (in number), and cropping intensity (in %) have positive influence. Unlike popular studies, the operational holding (in acres) has shown negative influence. Further, the age and education of the head of a family show no influence. There is a pressing need for fundamental change in the strategy to raise the resources and income of the farmer and accordingly accelerate the pace of capital formation in agriculture through targeting investment in irrigation, land development, and other infrastructure development.