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Determinants of credit access of cocoa farmers
Published December 31, 2019
73-78

Access to credit is one of the critical areas that are of prime interest to development practitioners, agribusiness entrepreneurs and agricultural economists, mainly access to credit by farmers in order to increase their production and also reduce poverty. This study sought to analyze the determinants of credit access among cocoa farmers in the... Asunafo North of the Ahafo Region of Ghana. The multistage sampling procedure was used to collect data from 100 cocoa farmers with the aid of a questionnaire. Sources of credit, factors influencing access to credit, and constraints to credit were analyzed with the aid of descriptive statistics, multiple linear regression, and Kendall’s coefficient of concordance respectively. The results of multiple linear regression revealed that, age, marital status, education, experience, and family size were significant factors that influenced access to credit. The constraints analysis with the aid of Kendall’s coefficient of concordance showed that, high interest rate was highly ranked with a mean score of 1.93 whilst the need for a guarantor was least ranked with a mean score of 7.40. Based on the results, the study recommended that a policy aimed at expanding formal and semi-formal financial institutions credit portfolio to embrace cocoa farmers by finding alternative to collaterals and also reducing the interest rate will improve credit access with a positive externality effect of poverty reduction among cocoa farmers in the study area.

JEL Classification: Q14

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37
23
Smallholder Food Marketing Behaviour: Exploring the Role of Informal Credit and Traders in Stabilization of Food Crop Prices
Published May 2, 2018
67-82

Many farmers in Africa sell their produce at low prices immediately after harvest because they need cash. They could solve temporary liquidity constraints by use of credit and store their produce to sell when prices are high. However, due to various reasons such many poor farmers have been excluded from formal financial services. In response, t...he informal financial market has expanded, but the question why informal credit has not facilitated storage to enable farmers benefit from intertemporal arbitrage opportunities remains largely unanswered. To answer this question, we investigate the role of informal credit markets and traders in stabilizing seasonal food crop prices. Our analysis is based on a household survey data, and in-depth interviews with key players in the informal credit market and grain traders in rural southwestern Uganda. We find that community-based self-help savings and credit associations provide credit for the majority (62%) of farmers. Informal credit still excludes the very poor and is not sufficient to enable farmers benefit from intertemporal arbitrage opportunities. Thus, poor farmers continue to ‘sell low and buy high’. The study also addresses a related fundamental aspect of food marketing: why is there no competition between traders bidding up prices after harvest and eliminating seasonal price fluctuations? We analyse traders’ costs and profit structure in the study area, and shed some light on imperfections in the grain market and the barriers that limit competition between traders. We find that grain trade is not highly competitive. High transaction costs and limited access to credit are the main barriers limiting competition. Supporting community-based self-help savings and credit associations to raise their portfolio can enable more farmers to borrow at the same time. Investing in infrastructure, organising and supporting small scale farmers to bulk their produce might lower transaction costs, promote competition and dampen price fluctuations.

JEL Classification: D53, O13, O16, Q12, Q13

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27
12
Impacts of the global financial and economic crisis on the agro-food industry and rural livelihoods in Serbia
Published June 30, 2012
113-118

Sixty-five per cent of the Serbian land area is agricultural and 55% of the population is rural.Agriculture share of GDP is more than 10% and about 47% of the rural labour force deals with agriculture. The aim of this work is to analyse the impacts of the global financial and economic crisis on the Serbian agro-food sector and rural communities.... Measures introduced, mainly by public institutions, for relieving the consequences of the crisis are presented and discussed. Easily accessible yet high quality data from the central Office of Statistics in Serbia and specialized literature have been used. Impacts have been assessed by analyzing and discussing the trends of many socio-economic indicators. The crisis has had general impacts on the Serbian economy (low GDP growth, unemployment increase, price volatility, purchasing power decrease, etc.). Due to the crisis growth in agricultural production has been very low (0.1% in 2009). Agro-food exports decreased dramatically in 2008. About 9000 agricultural jobs were lost in 2008 and 2009. Reduced exports and lower domestic demand impacted negatively on agricultural commodity prices and agricultural household incomes.Access to credit became more difficult especially for small producers. However, agriculture is still a very important safety net. Agricultural employment share has increased both for men and women. The importance of agriculture is even higher if we consider the “grey agricultural economy”. To mitigate the crisis effects, the Government provided subsidies to rural people and will adopt the National Strategic Plan and Programme for Rural Development. Nevertheless, public institutions - in partnership with private, civil society and international organisations - should improve rural producers’ access to market information and credits and foster investments in rural areas including non-agricultural ones and those aiming at improving physical capital.

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11
4
The global financial crisis: Implications for capital to agribusiness
Published June 30, 2012
59-62

The global economy has continued to experience lingering effects of the global financial crisis that began in 2007. Although attention was initially given to the liquidity crisis and survival of some the world’s largest corporations and institutions, the financial crisis is likely to have long-lasting implications for agribusiness. As the wor...ld slowly recovers from the crisis, another round of problems are emerging as governments and international institutions attempt to unwind the positions they took in an effort to prevent the global economic bubble from bursting. Perhaps the most problematic factor for businesses is access to capital in sufficient amounts and at affordable rates. Governments and institutions, particularly in the United States (U.S.) and the European Union, have increased their financial obligations as the result of activities taken to curtail the economic crisis. These financial obligations and the associated financial risks place pressure on financial markets and tend to restrain the availability of capital and increase the cost of capital for businesses. However, the U.S. agricultural credit market has not experienced problems to the same extent as general business (commercial and industrial) and real estate credit markets have. In general, U.S. farm businesses have a strong balance sheet, adequate repayment capacity, sufficient amount of assets to offer collateral for loans, and reasonable profits. Thus, U.S. farm businesses have had an ample supply of credit at relatively low interest rates.

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11
4
Urban Food Crop Farming and Farm Households’ Food Security Status in Oyo State, Nigeria
Published May 2, 2018
23-28

Food production and supply has been on the decline in Nigeria with a consequent impact on household food security. This study examined the influence of urban farming on household food security in Oyo State, Nigeria. Multi-stage sampling procedure was used to select 159 farm households in a cross-sectional survey. Structured questionnaire was us...ed to obtain data on socio-economic characteristics, determine the food security status of urban crop farming households in the study area, and examine the effects of urban crop production on households’ food security status. Data were analysed using descriptive statistics while the statistical tools were Food Security Index (FSI) and Probit Regression Model (PRM). Results revealed that 84.9% of the respondents was male, 81.2% married. The average age, household size, and farm size were 49.6 years, 6 persons, 1.1 hectares respectively. Most (75.5%) of the respondents did not have access to consumption credit and 62.3% did not belong to any farmers association. Based on minimum daily energy requirement per adult equivalent of N230.8, 90.6% of the farm households was food secure.

The PRM showed that age (β = -0.1, p<0.05), household size (β= -0.4, p<0.01) and economic efficiency (β = -61.6, p<0.05) reduced the probability of household food security while access to consumption credit (β= 1.7, p<0.05) and allocative efficiency (β = 67.9, p<0.05) increased the probability of household food security. The study concluded that urban farming significantly influence household food security.

JEL Classification: Q11

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21
10
Effect of Training on Small-Scale Rice Production in Northern Ghana
Published December 13, 2018
13-20

Training in modern farming methods enables farm households in developing countries to improve agricultural productivity. Notwithstanding the efforts of governmental and non-governmental organisations to provide farmers with agricultural training, productivity remains low. The existing literature provides little empirical evidence of the effect ...of training on agricultural productivity in Ghana. This study therefore seeks to bridge this gap by investigating small scale rice farmers’ participation in agricultural training programmes and its effect on productivity in northern Ghana. A treatment effect model was used to account for sample selection bias. The results indicated that participation in training increased with the number of extension visits, group membership, access to credit and the degree of specialisation in rice production. Furthermore, total output and labour productivity both increased with participation in training but the relationship with land productivity (yield) was insignificant. On average, participation in training was associated with 797kg increase in rice output, while labour productivity increased by 7.3kg/man-day. With the exception of farm capital, all the production inputs had a positively significant relationship with output suggesting sub-optimal use of capital in production. The study concludes that farmers’ training needs are not adequately being met while inadequate capital is constraining farm output. Increasing access to extension service and involving farmer-based organisations in the design and implementation of training programmes will enhance participation and farm performance.

JEL Classification: C21, D24, Q12

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19
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