Impact of agricultural credit access on agricultural productivity among maize and rice smallholder farmers in Rwanda

Taremwa, Nathan Kanuma; Macharia, Ibrahim; Bett, Eric K.; Majiwa, Eucabeth

doi:10.17306/j.jard.2021.01341

Cited by 5 publications

(3 citation statements)

References 28 publications

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“…Some studies analyzed the impact of agricultural credit on the productivity of smallholder farmers. Taremwa et al. (2021) found a positive effect on maize productivity in Eastern Rwanda; according to Chandio et al.…”

Section: Resultsmentioning

confidence: 99%

“…Some studies analyzed the impact of agricultural credit on the productivity of smallholder farmers. Taremwa et al (2021) found a positive effect on maize productivity in Eastern Rwanda; according to Chandio et al (2018), wheat productivity in Sindh, Pakistan, is positively related to both short-and long-term credit. Nordjo and Adjasi (2020) results show an impact of credit on productivity and production for maize, in Ghana.…”

Section: Variables and Datamentioning

confidence: 94%

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Regional impacts of rural credit and rural insurance policies on crop area and productivity: evidence from São Paulo state, Brazil (2008 and 2017)

Leite

Castro

Tateishi

2022

AFR

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PurposeConstrained input use and lower productivity of rural establishments may be associated with restricted or concentrated access to financial resources, especially in developing countries. Meanwhile, agricultural activity entails risks associated with the volatility of net cash flows and external events, which may discourage riskier but higher return investments (e.g. technology). As rural credit can alleviate the former, and rural insurance may help alleviate the latter, the combination of both policies might endorse each other. The purpose of this study is to analyze the use of rural credit and rural insurance policies with respect to productivity and crop area, in São Paulo state, Brazil, using farmer's microdata from two surveys realized in 2007/08 and 2016/17.Design/methodology/approachThis study uses propensity score matching and the entropy balance approaches in a complementary way. This study compared three policy treatments – rural credit, rural insurance and both policies combined, against establishments that received neither one. The analysis considered sugarcane, grain and grape crops separately and employed farmer's microdata. Moreover, the analysis was stratified into two categories: establishments owned by family farmers and those that did not.FindingsRural credit policy is related to higher productivity and larger cultivated area for grains and only to larger area for grape crops in the last analyzed period (2016/17). Rural insurance, as a unique policy or combined with credit, is related to higher productivity and cultivated areas, for all analyzed crops, only in the second period (2016/17), as the policy became more accessible to farmers. Heterogeneity regarding crops and farmers might influence the effectiveness of these policies. Despite rural insurance being related to a better performance regarding the outcome variables, it still reaches a small share of farmers, especially when combined with credit.Originality/valueMany studies about the effectiveness of rural credit in Brazil have been conducted throughout the years, while there have been fewer studies regarding rural insurance since it became an important policy in the mid-2000s. However, few studies have conducted an analysis comparing its individual and interactive influences, with such level of disaggregation, on a farm-level database, considering the heterogeneity of the data and the different categories of farmers.

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Section: Resultsmentioning

confidence: 99%

Section: Variables and Datamentioning

confidence: 94%

Regional impacts of rural credit and rural insurance policies on crop area and productivity: evidence from São Paulo state, Brazil (2008 and 2017)

Leite

Castro

Tateishi

2022

AFR

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“…Freshly, Houensou et al (2021) analysing the impact of access to credit on crop productivity of farmers in Benin using national representative survey data during 2016-2017 agricultural season, showed that access to agricultural finance has a positive impact on the crop productivity of small farmers, with an increase of 13% in crop productivity suggesting a significant performance. Likewise, Taremwa et al (2021) for 422 small farmers cultivating maize or rice in the Western and Eastern province of Rwanda employing propensity score matching technique observed that productivity was higher by 44% among the farmers who had credit access suggesting that they harvested on average an extra 440 kilograms of maize or rice. More freshly, Ngong et al (2022) examining the influence of bank credit on crop productivity for the Central African Economic and Monetary Community from 1990 to 2019 observed that bank credit positively and significantly affects productivity of agriculture.…”

Section: Empirical Nexus Between Agricultural Credit and Crop Product...mentioning

confidence: 99%

Agricultural credit and productivity of crops in India: field evidence from small and marginal farmers across social groups

Yadav

Rao

2022

JADEE

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PurposeThis work examines the impact of institutional agricultural credit on crop productivity of some major crops such as paddy, cotton, wheat and pulses for small and marginal farmers across various social groups.Design/methodology/approachThe cross-sectional field data on socio economic variables was collected from three Indian states from about 400 small and marginal farmers across various social groups using multi-stage stratified random and purposive sampling through a structured questionnaire by interviewing. The method of propensity score matching (PSM) was employed to calculate average treatment effect (ATE) and average treatment effect on the treated (ATET) by categorising sample farmers as treatment group and control group where crop productivity was considered as outcome variable and access to institutional credit was considered as treatment variable.FindingsThe PSM estimates reveal that ATE and ATET for all the selected crops are found to be significantly higher for the treated group vis-à-vis non-treated group suggesting that institutional agricultural credit has a statistically and significant positive impact on the crop productivity.Research limitations/implicationsSimilar study can be extended for more crops and across regions in India for a universal coverage.Originality/valueThe agricultural credit policy of India has been to increase the access and availability of institutional farm credit. This has led to in general increase in the flow of formal farm credit to agricultural sector. However, the impact of institutional credit and crop productivity especially for small and marginal farmers across social groups is not well recognized in India using field data. Accordingly, this field data study contributes to the existing research by providing fresh evidence from field across social groups for both kharif and rabi crops using recent survey data from small and marginal farmers which has important policy implications.

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Impact of credit use on crop productivity and gross income of smallholder farmers: a propensity score matching approach

Lelisho,

Lelisho

2024

Discov Agric

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Background Agriculture is Ethiopia’s principal economic activity, employing the vast majority of the population, however, smallholder farmers in the country face long-standing challenges, including low levels of production, low income, and less credit use. This study aimed to analyze the impact of access to credit on crop productivity and income among small-scale farmers in the study area. Methods We conducted a cross-sectional study from January 1st to 30th, 2022. Primary data were collected from purposely selected seven (7) kebele of the district based on potential users of agricultural credit. Then the impact was investigated by applying the propensity score matching technique. A Probit regression model was used to determine factors associated with credit use. The significance of the variables was decided at a 5% level of significance. Results In our study, a total sample of 347 smallholder farmers were randomly selected, out of which 42.9% were credit-users while 59.1% were non-users. Regarding sources of credit use, Vision Fund was the most commonly used source of credit with 67.8% of users, followed by the Omo Microfinance institution with 22.1%. Sex of the farmer, age of the farmer, existence collateral, farm size, attitude towards risk, extension service, membership in credit institutions, road access, and number of total livestock units in tropical livestock units (TLU) had significant effects on credit use at a 5% level of significance. Moreover, the estimates showed that utilizing credit resulted in a rise in crop productivity in current market value and total yearly income by 19,302.44 and 18,009.63 respectively. Conclusion Our study suggested that credit use had a considerable impact on crop productivity and total annual income. As a result, the study recommended that the government’s rural finance policy agenda should prioritize opening different branches near farmers, improving credit usability, and providing more training programs to smallholder farmers to improve their skills and help reduce the problems that impede their use of agricultural credit.

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Impact of agricultural credit access on agricultural productivity among maize and rice smallholder farmers in Rwanda

Cited by 5 publications

References 28 publications

Regional impacts of rural credit and rural insurance policies on crop area and productivity: evidence from São Paulo state, Brazil (2008 and 2017)

Regional impacts of rural credit and rural insurance policies on crop area and productivity: evidence from São Paulo state, Brazil (2008 and 2017)

Agricultural credit and productivity of crops in India: field evidence from small and marginal farmers across social groups

Impact of credit use on crop productivity and gross income of smallholder farmers: a propensity score matching approach

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