ABSTRACT:
Rural saving is always considered most important determinant of private investment in agriculture. Consequently agricultural economists in the country have shown for long considerable interest in the saving and investment behaviour of the Indian farmer. The study has particularly focused on the state of Uttar Pradesh which contributes a significant part of the agricultural output of the country. The main objective of the study is to explore the saving and investment pattern on different farm size groups in the state. The study concluded that there was a high degree of concentration of capital formation in the higher asset groups but the regional variations in investment in agriculture persist in eastern and western regions of Uttar Pradesh. Empirical evidences of sample household in Faizabad and Bijnor districts showed that, on average, a farm household saved 27.9 % and 33.7 % of its income in financial and physical assets in both districts respectively. Average savings in all type of savings increased with size of holdings in both districts. The purchase of livestock was the most important item of capital formation for marginal farmers to support their income. The preference to purchase agricultural implements and machinery in both districts was due to the adoption of new technology.