scholarly journals The Constraints of Agricultural Credit and Government Policy Strategy

2018 ◽  
Vol 215 ◽  
pp. 02008
Author(s):  
Sri Herliana ◽  
Acip Sutardi ◽  
Qorri Aina ◽  
Qonita Himmatul Aliya ◽  
Nur Lawiyah

Low access to credit in the agricultural sector is also caused by problems of agricultural sector actors (especially farmers) and financial institutions. Farmers are still having difficulty in accessing credit (accessibility and unbankable) and the limited financial institutions that channel credit to the agricultural sector. Therefore, the government must issue a policy in growing the agricultural sector, especially in anticipation of access credit constraints by farmers. The agricultural sector as a high-risk business, therefore formal institutions are less interested in financing the agricultural sector on the grounds of high transaction costs, asymmetric information, low profits, lack of collateral, education of farmers is relatively low. In addition, most banks do not want to finance agriculture due to fluctuating production and uncontrolled price risk. While the constraints of the farmers in obtaining formal credit is a complex procedure, there should be collateral as well as high payment delay fees, long distances and less information about capital.

2014 ◽  
Vol 74 (3) ◽  
pp. 364-378 ◽  
Author(s):  
Dadson Awunyo-Vitor ◽  
Ramatu Mahama Al-Hassan ◽  
Daniel Bruce Sarpong ◽  
Irene Egyir

Purpose – The purpose of this paper is to investigate the determinants of agricultural credit rationing by formal lenders in Ghana. Design/methodology/approach – This study employed descriptive statistics, analysis of variance (ANOVA) and Heckman's two-stage regression model to identify types of rationing faced by farmers and investigate factors that influence agricultural credit rationing by formal financial institutions. Data used in this study are gathered through a survey of 595 farmers in seven districts within Brong Ahafo Region of Ghana. Findings – The result reveals that farmers face three types of rationing. Evidence from the Heckman two-stage models shows that engagement in off farm income generating activities, increase in farm size, positive balances on accounts and commercial orientation of the farmers has the potential to reduce rationing of credit applicants by formal lenders. Practical implications – The results provide information on the factors that need to be considered as important in an attempt to reduce agricultural credit rationing by formal lenders. Originality/value – The value of this study is that farmers would use the results of this study to improve access to required amount of agricultural credit from formal financial institutions. The information would also benefit stakeholders in the agricultural sector, particularly youth in agriculture program organized by Ministry of Food and Agriculture in Ghana as how to improve access to credit and reduce rationing of program participants by formal financial institutions.


Author(s):  
Andrey E. Makushev

Introduction. Against the backdrop of increased government participation in the economic development of the country, support for agricultural engineering was seen as one of the tools for transformation in the agricultural sector, as well as a way to increase public welfare. In addition, the government was interested in the growth of agricultural production and exports, which became one of the most important sources of foreign exchange funds. This article will attempt to explore the position of the state and the forms of its participation in the development of agricultural engineering in Russia. Special attention will be paid to the process of folding the corporate organization of manufacturers of agricultural machinery and implements, against the backdrop of the strengthening of monopolistic trends in the Russian economy in the late XIX – early XX centuries. Materials and Methods. In solving the research problems, archival materials, published data of official statistics, and also scientific literature were used. The study was conducted on the basis of the principles of historicism, objectivity and system approach. The need to process quantitative data necessitated the use of a statistical method. The use of modernization theory made it possible to include the development processes of the production of agricultural machinery and implements in the trend of industrial modernization. Results. Based on a study of archival and published sources, as well as available scientific literature, the main development problems were identified, and the evolution of government policy in the field of agricultural engineering in the late XIX – early XX centuries was examined. Against the backdrop of increased government participation, the processes of capital self-organization are shown, the forms and results of interaction between government structures and corporate-monopoly organizations in the development of this industry are studied. Discussion and Conclusion. At the end of the XIX and beginning of the XX centuries, state participation in the development of the industry took place in two directions. Firstly, the customs regulation of imports of agricultural machinery, which was protectionist in nature. Secondly, direct support to manufacturers of machinery and complex technical devices for agriculture (bonuses and soft loans to owners of specialized enterprises, assistance in the transportation and marketing of products, etc.). In parallel, there was a consolidation of domestic manufacturers of agricultural machinery and implements in order to exchange experience, jointly solve the most pressing problems and lobby their interests in government circles. Since 1907, congresses of Russian manufacturers of agricultural machinery and implements began to be regularly held. In fact, this corporate organization has transformed into a monopolistic type of association. The study showed that the interaction of government structures and corporate-monopoly associations of manufacturers of agricultural machinery and implements, despite some differences, was generally cooperative in nature and had a very positive effect on the development of the industry.


2021 ◽  
Vol 2 ◽  
pp. 260-264
Author(s):  
Heri Susanto ◽  
Ramon Syahrial ◽  
Adi Budiwan

Suppose the agricultural sector is supported by a comprehensive and sustainable planning system and balanced with an adequate budget (such as capital). In that case, the role of the agricultural sector will be optimal. Farmers face the problem of funding; although many farmers can increase their yields, they cannot develop their own farming business if they do not have sufficient funds. Therefore, farmers will apply for loans from formal and informal financial institutions to overcome the lack of funds. However, credit growth has increased, especially in the agricultural sector, which is the agricultural sector where the government plans to improve the rural economy. Agricultural credit plays a crucial role in developing agriculture to obtain higher yields. If output increases, farmers' income will also increase, which will benefit farmers. The research method used was quantitative, with a sample of 100 people. This study used a population of 187 farmers in Kedung Lengkong Village, Dlangu District, Mojokerto Regency. The analysis used in this study was simple regression to understand the impact of credit availability on farmers' welfare. The hypothesis test results were that credit has a positive effect on welfare, with a regression coefficient value of 0.291. Credit helped farmers purchase fertilizers, seeds, and other things related to the need for farming so that the agricultural production process could run according to planning so that production results were in line with farmers' expectations to increase profits. These profits, in the end, became a source to meet the costs of meeting basic needs. The ability to meet these needs raised the standard of living and the community's welfare so that people could have a better quality of life. 


2021 ◽  
Vol 7 (1) ◽  
pp. 1-12
Author(s):  
Adewuyi Adekunle Kolawole ◽  
Amurtiya Michael

Abstract This study is focused on analysing the economics of rice production by the small-holder female rice-farmers in Adamawa State, Nigeria. Specifically, the study described female rice-farmers’ socio-economic characteristics, analysed their technical and allocative efficiencies, and also assessed their economic efficiency in the area. Primary data were collected from 180 randomly selected female rice-farmers in Adamawa State using a semi-structured questionnaire. Descriptive statistics and stochastic frontier function were used analysing the data collected. Findings of the study revealed that the technical in-efficiency of the farmers is influenced by farming experience, education, and access to credit facilities. Also, the allocative in-efficiency of female farmers was influenced by education, household size, and access to credits. The result showed that education and access to credit facilities were common factors affecting the technical and allocative efficiency of female rice farmers in the area. The mean economic efficiency of the female farmers was 0.6. Therefore, the study recommends that the government and other actors in the agricultural sector should facilitate women’s access to credit facilities and other agricultural information relevant to rice production.


2016 ◽  
Vol 4 (1) ◽  
pp. 041
Author(s):  
Intan Puspitasari ◽  
Neneng Ela Fauziyyah ◽  
Annisa Nur Salam

Various poverty alleviation programs are always launched by the government from year to year. But it is not able to change the state of this country to become more self-sufficient and prosperous. If explored further, the majority of people classified as poor are working as farmers. Therefore, it is necessary to alleviate poverty policy that focuses on the welfare of farmers. So that when the policy is successfully realized, the majority of the poor in Indonesia will be able to independently through the development of the agricultural sector. One of the problems faced by farmers is weak stimulus funds from financial institutions. Due to the agriculture sector is seen as high risk, the financial institutions tend to feel worried if that financing for the sector. In anticipation of losses on crop failure, it is important applied an insurance that serves to protect the farm. So that financial institutions have the courage to do the financing for the agricultural sector. Meanwhile, zakat is one of the Islamic public financial instruments with the potential to be developed. Zakat funds channeled to 8 asnaf, including for the poor. So, it is possible if the charity can be used as agricultural insurance fund for farmers who are poor. Based on the explanation, this paper is intended to offer a model of the distribution of zakat to the poor farmers through takaful. The hope when this model is applied, will invite many financial institutions in stimulating agricultural business funds. The final implications are the farmers’ productivity increased and the quantity of the poor in Indonesia will be reduced.


2005 ◽  
pp. 84-96
Author(s):  
O. Yastrebova ◽  
A. Subbotin

The article analyses farms' access to credit and other financial institutions in Russia. Some government policies that have a bearing on the main financial issues of the farm sector are examined. These include policies relating to debt restructuring, subsidised credit and investment support. Farms' access to credit is analysed at both sector level and for the sample of 144 farms from Rostov, Ivanovo and Nizhni Novgorod oblasts, applying the discreet regression analysis. The findings caution against generalizing the conventional financial patterns of market economies to transition countries.


2012 ◽  
Vol 02 (12) ◽  
pp. 01-07
Author(s):  
Awe A.A

The paper examines the mobilization of domestic financial resources for agricultural productivity in Nigeria with a view to identify the contributions of the various sources of finance to agricultural productivity in Nigeria. To achieve this objective, the paper employed Vector Auto Regressive Model (VAR) to analyze time series data from (1980 – 2009). The paper identified the various instruments and strategies used by the government for mobilizing resources for the agricultural sector in Nigeria to include subsidy and agricultural credit policies that were financed through Nigerian Agricultural Credit Bank (NACB), credit facilities from Nigerian Bank for Commerce and Industries at the state level, credit through Commercial and Merchant Banks and provision of agricultural credit to the defunct Commodity Board by the Central Bank of Nigeria. The OLS (VAR) result revealed positive relationships between the variables and the variance decomposition measured the proportion of forecast error. The paper therefore recommend that the Federal government recurrent expenditure on agriculture should be reviewed upward for enhanced agricultural productivity and that both the Federal government and the Commercial Banks should mobilize more financial resources toward the agricultural sector to boost agricultural productivity which would guaranteed maximum agricultural productivity in Nigeria.


2017 ◽  
Vol 6 (3) ◽  
pp. 1
Author(s):  
Martin K. Shapi

The paper uses a combination of theory and both quantitative and qualitative evidence to demonstrate the significance and challenges of agricultural development in Namibian green scheme projects. For quantitative, a structured questionnaire to produce descriptive statistics was administered to 135 small farmers while eight (8) project manager who were interviewed at the studied schemes as key informant served as source of qualitative information that pin pointed out challenges and opportunities, faced by the small farmers in these schemes. The evidence points to the fact that although there are myriad of challenges, such as challenges related to production, access to efficient and effective market and access to credit faced by farmers, production and access to efficient and effect market challenges emerged as the most stumbling blocks to the optimal production and sales of small farmers’ produce. Usually access to agricultural credit is seen as one of the major challenges of smallholder farmers in Africa. In this study access to agricultural credit was less seen as a major stumbling block to the smallholder farmers’ productivity. This is attributed to the current farmers’ agricultural credit support scheme in place between Agricultural Bank of Namibia (Agribank) and the government of Namibia.


2018 ◽  
Vol 1 (1) ◽  
pp. 1 ◽  
Author(s):  
Hanik Fitriani

Abstract: Currently the development of technology is growing very rapidly and has entered into all sectors, including the financial sector. With the technology to the financial sector, it is slowly transforming the financial industry into the digital era. The combination of Financial Technique (Fintech) with financial institutions, especially sharia financial institutions, is considered to increase financial inclusiveness in agriculture. Inclusion is a situation where the public is not aware of access to digital finance.The emergence of problems in the first agricultural sector due to lack of land, secondly due to lack of farmer capital and thirdly due to lack of land processors made modernization of technology create agricultural financial technology as an alternative to increase financial inclusion in agriculture.The use of fintech agro in Indonesia is felt to be lacking because of constraints such as lack of literacy to the community, poorly trained human resources, lack of legislation and lack of network access to remote villages. Financial inclusion can increase with the support of the government to improve supporting facilities and infrastructure for the use of fintech agro in Indonesia. الملخص: في الوقت الحالي ينمو تطوير التكنولوجيا بسرعة كبيرة وقد دخل في جميع القطاعات، بما في ذلك القطاع المالي. ومع دخول التكنولوجيا إلى القطاع المالي، فإنها تحول الصناعة المالية إلى العصر الرقمي. ويشعر مزيج من التقنية المالية  مع المؤسسات المالية، وخاصة المؤسسات المالية الشرعية، تزيد التمويل في مجال الزراعة. ظهور مشاكل في القطاع الزراعي الأول بسبب عدم وجود الأراضي، وثانياً بسبب نقص رأس المال الفلاحي، وثالثاً بسبب عدم وجود معالجي الأراضي، أدى تحديث التكنولوجيا إلى خلق التكنولوجيا الزراعية المالية كبديل لزيادة الشمول المالي في الزراعة. ومن المعتقد أن استخدام التكنولوجيا الزراعية في إندونيسيا يفتقر إلى القيود بسبب الافتقار إلى معرفة القراءة والكتابة لدى المجتمع، والموارد البشرية المدربة تدريجيًا، وعدم وجود تشريعات، وعدم الوصول إلى الشبكة إلى القرى النائية. يمكن أن يزيد الإدماج المالي بدعم من الحكومة لتحسين المرافق الداعمة والبنية التحتية لاستخدام التكنولوجيا الزراعية في إندونيسيا.                                         Abstrak: Saat  ini  perkembangan teknologi berkembang sangat pesat  dan telah masuk ke semua sector, diantaranya adalah sektor keuangan. Dengan masuknya teknologi ke sector keungan, maka secara perlahan  mengubah industry keuangan ke era digital. Perpaduan antara Financial Technlogi (Fintech) dengan lembaga keuangan  khususnya lembaga keuangan syariah dirasa dapat meningkatkan inklusif keuangan pada bidang pertanian. Inklusi adalah sebuah keadaan di mana masyarakat kurang paham terhadap akses keuangan digital.Munculnya permasalahan pada bidang pertanian pertama karena kurangnya lahan, kedua karena kurangya modal petani dan ketiga karena kurangnya pengolah lahan membuat modernisasi teknologi menciptakan teknologi financial  agro pertanian sebagai alternative meningkatkan inklusi keuangan pada bidang pertanian.Penggunan fintech agro di Indonesia dirasa masih kurang karena adanya kendala seperti kurangnya literasi kepada masyarakat, Sumber daya manusia yang kurang dibina, peraturan perundang-undangan yang kurang dan kurangnya akses jaringan ke dalam pelosok desa. Inklusi keuangan bisa  meningkat dengan adanya dukungan dari pemerintah guna peningkatan sarana dan prasarana penunjang untuk penggunaan fintech agro di Indonesia.


2018 ◽  
Vol 45 (4) ◽  
pp. 644-660 ◽  
Author(s):  
Shahab E. Saqib ◽  
John K.M. Kuwornu ◽  
Mokbul Morshed Ahmad ◽  
Sanaullah Panezai

Purpose The Government of Pakistan has allocated a substantial proportion of agricultural credit to subsistence farmers. The purpose of this paper is to analyze farmers’ access to credit and its adequacy in the light of current agricultural credit policy of Pakistan. Design/methodology/approach The study has used both secondary and primary data for analysis. Secondary data were collected from the annual reports of Pakistan Economic Survey and State Bank of Pakistan. Primary data were collected from 168 subsistence farmers through households’ survey. Farmers’ credit access and credit adequacy were measured using credit access ratio and credit adequacy ratio, respectively. The Student’s t-test and analysis of variance were used to assess the differences in credit access and adequacy among farmers’ groups (i.e. upper, medium and lower subsistence farmers). Tobit regression model was employed to determine the factors influencing credit adequacy among farmers. Findings The empirical results revealed that the amount of credit provided to subsistence farmers was less than stated in the national agricultural credit policy. Upper subsistence farmers had more access to credit than lower and medium subsistence farmers. Lower subsistence farmers had above average access to informal sources of credit, and had below average access to formal sources. The findings also revealed that lower subsistence and medium subsistence farmers had the highest credit inadequacy of funds for investment in agriculture. The results of the Tobit regression revealed that age, education, experience, household size, total landholding of farmer and proportion of own land influenced the agricultural credit adequacy. Practical implications Most of the credit was distributed among the upper subsistence farmers. Lower subsistence farmers were still largely dependent on informal credit for farm production activities. The Government of Pakistan performed poor in the implementation of agricultural credit policy, and has failed to help subsistence farmers in their access to formal credit. It is needed to revamp the agricultural credit policy and facilitate credit acquisition by subsistence farmers, particularly for tenant farmers. It is important that the Government may classify the subsistence farmers into subgroups, and reallocate the funds accordingly. This study has lessons and implications for agricultural finance initiatives in developing countries. Originality/value Previous studies have focused primarily on access to agricultural credit. However, this study has adopted a holistic approach by using secondary and primary data to assess the farmers’ access to credit and adequacy. In addition, limited literature is available to explore the farmers’ accessibility and adequacy of agricultural credit. Furthermore, this study has focused exclusively on the farmers who are living in the flood-prone areas of Pakistan.


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