Agricultural Credit and Extension Services: Does Their Synergy Augment Farmers’ Economic Outcomes?

Abstract

Access to credit is essential for sustainable agricultural development. This paper evaluates the impact of formal and informal agricultural credit, access to extension services, and different combinations of agricultural credit and extension services on the economic outcomes of farming households in Afghanistan. This study applies a quasi-experimental approach (propensity score matching) and inverse-probability-weighted regression adjustment (IPWRA) analysis. The data comes from a survey of 277 randomly selected farming households in the three districts of rural Afghanistan. The results show that having access to formal agricultural credit has a positive and differentiated impact on the farming costs and net revenue of farming households. However, the effects increase when a farming household has access to both formal credit and extension services. The results also reveal that credit constraints affect farming costs and net revenue. The study provides some practical implications for agricultural development policymakers. First, formal agricultural credit affects farm revenue in rural Afghanistan. Second, the impact of credit bundled with agricultural extension services on farm revenue is higher than the impact of the provision of each service separately. Therefore, a more sustainable agricultural credit arrangement should be supplemented by extension services for farmers in Afghanistan.

Factors Responsible for Participation of Self Help Group Farmers in Vegetables and Fruits Promotion Council Kerala, India

“…The accessibility to credit has been increased because of the support of VFPCK. This reaffirms the findings of Moahid et al, that farmers' access to credit contributes positively to the adoption of commercial farming thereby increased income [7].…”

Determinants of Small-Scale Commercial Vegetable Farming Among Vegetable Growers in Nepal

“…Access to loan is an important business factor associated with any capital-intensive venture, including commercial vegetable farming. It eases capital constraints faced by the farmers in accessing inputs such as improved seeds, chemical fertilizers, pesticides, and irrigation (Moahid et al, 2021). At the same time, there is high chance that the vegetable growers having access to loan will not be involved in commercial vegetable farming.…”

“…Education of the farm holder does not show significant relation to the adoption. However, technical assistance is crucial for promoting the adoption (ADRA Nepal, 2019; FORWARD Nepal, 2018; Winrock International, 2016), thereby increase income (Moahid et al, 2021). Similarly, access to chemical fertilizers, pesticides, and improved vegetable seeds are important for enhancing adoption of commercial vegetable farming among vegetable growers (ADRA Nepal, 2019; FORWARD Nepal, 2018; Gurung, Regmi, et al, 2016; Shrestha & Karki, 2017; Winrock International, 2017).…”

“…Access to loan is considered a critical business factor that facilitates agriculture transformation from subsistence to commercial farming by easing investment constraint faced by smallholder farmers. It is expected that farmers’ access to credit will contribute positively to the adoption of commercial farming (Feder & Umali, 1993; Ghimire et al, 2015; Mariyono, 2017; Mwangi & Kariuki, 2015; Raut et al, 2011; Suvedi et al, 2017; von Braun et al, 1994) thereby increased income (Moahid et al, 2021). Similarly, geographical location of the farm is an important factor affecting the adoption of commercial farming (Jensen et al, 2014).…”

“…Adopted from Mariyono (2017). Mariyono, 2017;Mwangi & Kariuki, 2015;Raut et al, 2011;Suvedi et al, 2017;von Braun et al, 1994) thereby increased income (Moahid et al, 2021). Similarly, geographical location of the farm is an important factor affecting the adoption of commercial farming (Jensen et al, 2014).…”