Financial Literacy and Portfolio Diversification of Farmers: A Case Study of Shiggaon Taluka

Abstract Introduction: It's really important for farmers in Shiggaon taluka, Haveri district, to understand financial matters and spread out their investments. This helps them make more consistent income and deal with risks better. In this region, more than 90% of farmers use government-supported machines, and they mostly depend on rain-fed farming. This makes their income uncertain. Learning about loans, money management, and investment options can help them use government schemes like PM-KISAN more effectively and grow different types of crops more wisely. Objectives of study: This study aims to find out how well farmers know about financial products, credit options like Kisan Credit Cards (KCC), and investment opportunities. Research methodology: This study uses a case study approach focused on Shiggaon taluka, located in Haveri district, Karnataka. The study uses a descriptive and diagnostic method to collect data through surveys from 100 farmers. These farmers are selected through a stratified random sampling method across various villages, ensuring they represent different landholding sizes: marginal, small, medium, and large. Data analysis: Data analysis shows that better financial education is linked to more varied income sources, such as dairy and horticulture, which helps income become more consistent. Finding: Farmers are aware of basic crop insurance, but they lack knowledge about formal loan procedures, digital banking, and the benefits of credit products like Kisan Credit Cards (KCC). Recommendation: Farmers should replace low-yield traditional crops with high-value horticultural crops and begin sericulture with more technical help. Conclusion: In Shiggaon, combining soil testing with proper nutrition, growing a variety of high-value and climate-resilient crops, and increasing awareness about financial matters can help break the cycle of low income and high risk for farmers.