Assessing the effect of farmer’s choice of fund for vegetable production in Bangladesh

Abstract

Farmer’s source of fund is crucial for vegetable production in Bangladesh. This paper attempts to identify vegetable grower’s choices of funds and factors responsible for their fund used for vegetable production. Primary data were collected from 354 farmers by using simple random sampling technique in three districts of Bangladesh. Farmers socio-economic characteristics were analyzed by descriptive statistics. Multinomial Logit Regression Model was used to identify factors responsible for farmer’s choice of funds for vegetables production. Analysis showed that farmer’s average age was 43.96 years and they had 5.24 years of formal education. In addition, they had 1.39 number of training and 10.79 years of farming experience. Personal savings, banks, NGOs, and friends and relatives were the sources of farmers funds for vegetables production. On average, 62.99% of the farmers used their own savings, 13.28% of the farmers used bank loans, 11.58% of the farmers used NGOs loans and 12.15% of the farmers took loans from friends and relatives. Results also showed that farmer’s level of education influenced negatively while farm size and number of family members positively influenced the probability of using bank loans compared to farmer’s own fund. Moreover, farmer’s years of farming experience influenced positively, and farm size negatively influenced NGOs loans used compared to farmer’s own fund. Besides, farmer’s level of education was negatively, and agricultural training positively influenced the loans from friends and relatives compared to farmer’s own fund. Vegetable farmers (24.86%) used institutional sources of funds for vegetable production. So, availability of institutional funds is required for the farmers to increase the vegetable production in Bangladesh.