The study analyzed the constraints faced by the farmers to rural credit by utilizing two household level data sets. The first survey Pakistan Rural Household Survey (PRHS) 2001 was utilized to study the purpose, source structure and utilization of rural credit and; the second which covered nearly 160 households from Sargodha District 2007 was used to calculate the demand and interest rate function by applying Heckman two stage procedures. The focus of this study was to find out the affect of credit constraints of institutional credit on consumption and production pattern of the rural farm...