Identifying Credit Accessibility Mechanisms for Conservation Agriculture Farmers in Cambodia

Abstract

As the expected cost of conservation agriculture (CA) inputs becomes an issue for farmers, financial institutions (FIs) play an essential role in promoting CA, a set of agricultural management practices with multiple positive effects. This research aimed to determine influencing factors, to rank challenges, and identify mechanisms for farmers to access agricultural credit for adoption of CA management practices in Cambodia. It was administered by conducting a survey of 242 randomly selected households for face-to-face interviews and conducting key informant interviews from purposive samples of 28 participants in Battambang and Preah Vihear provinces. The results indicated that influencing factors, including the family, adult labor and total farm size, had a positive relationship with farmers’ accessibility to agricultural credit, whereas age was negative. However, education year, farm size for main crops, on-farm income and farm experience were not significantly associated. High interest rates were the significant first-order challenge ranked, followed by document process complication, limited agricultural credit information, limited collateral security and a few other challenges. Support and improved process mechanisms to enhance credit accessibility are required to engage with multiple stakeholders, including farmers, FIs, non-government organizations (NGOs) and government officers. There has been a reduction in agricultural credit interest rates and incentives for importing CA inputs by the government, while provision of information support for agribusiness plans by NGOs which have implemented development project activities were considered as the main support mechanism. An improved process mechanism at the farmers’ level needs to include access to credit with low interest rates and a straightforward documentation process, whereas the FI level requires a business plan for lending decisions. It is evident that high lending rates hinder access to agricultural credit and the improvement of support and improved process mechanisms are necessary to better promote CA practices among farmers in Cambodia.