The impact of credit accessibility and information communication technology on the income of small-scale sugarcane farmers in Ndwedwe Local Municipality, KwaZulu-Natal Province, South Africa

Abstract

IntroductionAccess to credit and information and communication technology (ICT) plays a pivotal role in enhancing the practices of small-scale sugarcane farmers, impacting their financial, social, and economic wellbeing. However, many small-scale farmers need help accessing these resources, thereby affecting their ability to generate sustainable income. This study aimed to assess the factors influencing the adoption of ICT and access to credit and their subsequent impact on small-scale farmers' income.MethodsEmploying a multistage sampling technique, 300 small-scale farmers were selected as participants in the study. The recursive bivariate probit regression model was used to assess the factors affecting adoption ICT and a selectivity-corrected ordinary least square regression model was utilized to estimate the synergistic effect of ICT adoption and access to credit on the income of small-scale sugarcane farmers.Results and discussionThe findings revealed that approximately 77% of small-scale farmers had access to credit, while more than 80% had adopted ICT. The results derived from the recursive bivariate probit (RBP) regression model indicated that access to credit, education, and extension support positively and significantly influenced the adoption of ICT. Conversely, marital status and non-farm income exhibited a negative and significant influence on the adoption of ICT. Gender and marital status were positively and significantly associated with access to credit, whereas age, education, and non-farm income showed a negative and significant relationship on access to credit. Subsequently, a selectivity-corrected ordinary least square regression model analysis revealed that factors such as gender, marital status, extension, government support, and transportation costs positively and significantly influenced farmer's income. In contrast, education, employment status, and non-farm income exhibited a negative and significant influence on income.Conclusion and recommendationsThe study concludes that socio-demographic factors, such as gender, marital status, extension support, government support, and transportation costs, positively contribute to farmers' income. Small-scale sugarcane farmer involvement in other non-farm activities is associated with reduced farm income. This implies that farmers' livelihoods options are reduced as they can only focus on sugarcane development as a source of income. There is a pressing need to educate small-scale farmers on ICT and provide them with access to agricultural credit. Additionally, extension workers should offer advisory support to small-scale farmers requiring assistance in accessing agricultural credit. There is a need to train sugarcane farmers on different agricultural income generating activities to reduce their over-reliance on sugarcane development. By addressing the identified socio-demographic factors and implementing targeted policy interventions, stakeholders can foster an enabling environment for small-scale farmers to thrive, ultimately contributing to the sustainable development of the sugarcane sector and the broader agricultural landscape in South Africa.