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After Islamic revolution , more than ten milion rials in the form of supervised credits have been paid to the farmers . Effective use of such credits can play a significant role in both
quantity and quality of agricultural production ,The objective of this study is to evaluate the impact of supervised credits on agricultural production in Khorasan.
In addition to Cobb- Duglas production function which was estimated , parameters such as VMPk (value of the marginal product of capital), importance of preparatory costs for increasing bank interest and period of time needed for recieving facilities are used
The resuults indicate that capital has had a significant role in production . Operation costs as compared with capital costs play more important role in production . This means inefficient USC of capital among farmers who have used supervised credits. However , they have been more efficient than those units which taken Out credit for variable costs. About 47 percent of the total capital invested on these units has been provided by the agricultur at Bank.
A constant return to scale in these units as compared with that of developing countries (even Iran) which shows a decreasing return to scale, reveals higher level of technical knowledge and more use of new technology.It is because they have got economic and technical help from Agricultur Bank’s experts.
Investigation of VMP (value of the marginal Product) of capital comparing with interest reveals the profitability of those farm units which used more than ten milion rials of Agriculture Bank loans. Reviewing the average time needed for recieving credit facilities shows that applicants have to wait about .3 months in order to obtain such loans.
:inal research indicates that preliminary costs which farmers must pay befor recieving loans. have increased the administration costs of loans more than 1.2 percent per year.