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To describe the Pragathi Bandhu Groups (PBG) Model and portray the performance of PBG farmers encouraged by their financial and decision-making participation in micro financing and labor sharing, as well as to analyze the factors that influenced participation of small farmers in PBG.

The empirical study is confined to the small farmers and laborers of PBG functioning in the coastal districts of Karnataka State in India. The study is conducted in Belthangady and Bantwal Taluks of Dakshina Kannada (DK) Districts-Udupi taluk of Udupi District in the State of Karnataka. Primary data from 100 farmer members, selected at random in each of the Taluks, is collected through personal interview by administering semi-structured interview schedules and open discussion. In addition, the data on the functions and the performance of PBG in the State of Karnataka in India are also collected from the official records of Shri Kshetra Dharmasthala Rural Development Project (SKDRDP) and their field-level functionaries through informal discussions. Factor analysis is performed with principal component analysis followed by Varimax rotation to analyze the factors that influenced participation of small farmers in PBG.

Results show that the implementation of PBG Model, through the collective participation of small farmers in micro financing, free labor sharing, financial and decision-making activities underlying the functions of PBG Model, has helped them to achieve robust performance in terms of increased savings mobilization, loan utilization, and value of free labor sharing and acres of land brought under cultivation with the help of irrigation facilities created by them. The factor analysis has derived four factors that influenced the participation of farmers in PBG (agriculture development, financial participation, capacity building, and other benefits) which explain 63.701 of total factor variance.

The findings of this paper can benefit the small farmers and laborers in replicating the PBG Model and its initiatives that address shortages of labor and credit, as well as the high cost of labor, particularly in the unorganized sector in the agrarian economy.

The insights offered are likely to be beneficial to the distressed small farmers, development agencies, and agriculture policy makers to solve the agrarian crisis caused due to shortages of labor and farm credit.