Rural credit access and contract farming nexus in Ethiopia: A meta-analysis

Abstract

This review aims to assess the variability in empirical research conducted on the assertion that access to credit is an exceptional way to overcome some of the financial obstacles associated with contract farming adoption by farmers. Numerous studies have examined how credit access increases the adoption of agricultural technology at the national level. However, because the researchers' findings are heterogeneous, their applicability at the national level is limited. The random effects model showed that access to credit increases farmers’ contract farming adoption by 1.76 units compared to farmers with no access to credit. Additionally, the results of the meta-analysis revealed that the weighted average of the effect sizes in the studies was 40.01%. This indicates that access to credit encourages smallholder farmers to use different agricultural technologies and high-yielding varieties through contract farming. It recommends significant improvements from the government to encourage contract farming and facilitate credit access to assist smallholder farmers in rural areas.