Agricultural Loans Research Articles

Economic Effects of COVID-19 Agricultural Loan Palliative on Poultry and Fish Farmers’ Production in Ondo State, Nigeria

Economic Effects of COVID-19 Agricultural Loan Palliative on Poultry and Fish Farmers’ Production in Ondo State, Nigeria

Impact of Rural Finance Institution Building Programme on Socioeconomic Condition of Beneficiaries in Anambra State, Nigeria

Rural Finance Institution Building Programme (RUFIN) was established to improve the income, food security and general living conditions of poor rural households with financial services that will be improved in terms of quality, quantity and access to deposit, loan and transfer services. It is expected that the intervention of RUFIN should result in positive changes in the socioeconomic condition of the beneficiaries. The study evaluated the impact of RUFIN on the socioeconomic condition of RUFIN beneficiaries in Anambra State, Nigeria. Multistage, purposive and snowball sampling techniques were used to select 60 RUFIN beneficiaries (RB) and 60 non-RUFIN beneficiaries (NRB) for the study. Data were collected using structured interview schedule and personal observations. Descriptive and inferential statistics were used to analyse data generated. The average amount of loan obtained by RB was N67,266.70 at an average payback period of one year. Sex (t=-5.61) and years of farming experience (t=2.25) significantly (p≤0.05) influenced the amount of loan obtained while age (t=2.36) significantly (p≤0.05) influenced the number of loans obtained. RUFIN resulted in positive but not significant changes on 12(52.2%) of 23 items used in assessing the impact of the programme on the socioeconomic condition of the beneficiaries. The study recommended that RUFIN should enhance the loanable amount and payback duration which may in a long run, positively affect the socioeconomic condition of the beneficiaries. Also, farmers should be educated by extension agents on all sources of agricultural loans, use of loans, loans repayment plans, and how to diversify agricultural income for lasting impact on livelihood.

Policies enhancing agricultural value chains in developing countries: An Evidence Gap Map

Strengthening agricultural value chains (AVCs) and ensuring continuous supply of food is of upmost importance especially for developing countries where food security and malnutrition remain vital threats. However, effective and efficient coordination of AVCs in developing countries continues to remain an issue due to capacity constraints and inefficiencies of interventions. An Evidence Gap Map (EGM) is used to systematically retrieve, organize, and map existing knowledge on AVCs and identify gaps in the literature that will suggest future areas for effective policy interventions. The marginal increase in knowledge of a project focusing on an area of a knowledge gap may be larger than that of a project which focuses on an area with many studies. A total of 4745 studies were retrieved from a systematic search, however only 165 studies meeting inclusion criteria are included in EGM. Most policy interventions address inputs supply stage of value chains with specific focus on subsidies and agricultural loans. Governance and issues related to gender, poverty and social groups are underexplored. Most frequently mentioned outcomes subcategories were yield, agricultural profits, family income, and technology adoption. Outcomes related to risk management and product movement in time and space had the smallest frequency of occurrence. As noted, underexplored areas provide opportunities for future research.

Impact of Institutional and Non-institutional Agricultural Credit on Farmers-income and Constraint Analysis in Telangana, India

The present study is to analyse Impact of institutional and non-institutional Agricultural credit on farmers income and Constraint analysis. The study was conducted in 3 districts, 6 mandals, 12 villages and 120 sample farmers were selected for the study. Cost of cultivation (cost concepts) and income measures were used to analyse impact of agricultural credit on farm household income. Garette’s ranking technique was used to analyse the constraints faced by farmers in availing Agricultural credit. The cost of paddy cultivation was ₹78212.78 for institutional farmers and ₹80,726.78 for non-institutional farmers. ₹62050.96 is the Net Return for institutional farmers, whereas ₹54879.66 is for non-institutional farmers. Institutional farmers had a return on investment per rupee of 1.81, while non-institutional farmers had a return of 1.69. The major constraint faced by farmers is delays in loan disbursement. Agricultural credit has a positive impact on farm income. Therefore, the increase in institutional loans has improved the borrower farmers' economies. Timely disbursement of loans, simplifying the application procedure/documentation procedure and educating farmers about agricultural loans are suggested to improve crop loans availing in institutions.

Spatio-temporal evaluation of ecological security of cultivated land in China based on DPSIR-entropy weight TOPSIS model and analysis of obstacle factors

Cultivated land’s ecological security ensures human well-being and is critical to global food security. However, the unchecked expansion and excessive exploitation of agricultural resources have led to considerable land degradation issues in China, including soil erosion, contamination, and environmental degradation, raising concerns over the cultivated land ecological security (CLES). Current research on cultivated land (CLES is relatively limited, particularly at the national level across different provinces. In addition, a unified and comprehensive CLES evaluation index system has yet to be formed. To fill this research gap, we construct a CLES evaluation system with 35 indicators from three dimensions of “society-natural-economy” based on the DPSIR model framework and entropy weight TOPSIS model. Simultaneously, we conducted a spatial–temporal analysis of CLES in 31 provinces of China from 2012 to 2021 and applied the obstacle degree model to analyze the main factors impeding the CLES in China. The results showed that: (1) During the study period, the CLES and its subsystems showed a good development trend. Spatially, the CLES in China presents a regional difference of “high in the east and low in the west” and a significant regional difference among provinces. (2) The spatial CLES in different provinces of China presents a significant positive correlation, and the spatial clustering effect of CLES is gradually strengthening. The “High-High” clusters are mainly distributed in the northeast and eastern regions, while the “Low-Low” clusters are mainly located in the western region. (3) From the perspective of the criterion level, the state subsystem and the impact subsystem are the main obstacles hindering the improvement of CLES in China. At the indicator level, the common obstacle factors affecting the enhancement of CLES across provinces in China include soil erosion control intensity, number of green food certifications, per capita agricultural loans, per capita cultivated land area, and per capita grain production. Our research results can provide practical policy reference for further improving the ecological protection of cultivated land.

Regional analysis of agricultural bank liquidity

PurposeThe purpose of this article is to determine the regional economic factors and bank characteristics that significantly contribute to changes in bank liquidity. We also seek to identify regions that may be most susceptible to liquidity tightening.Design/methodology/approachFor this article we use data on deposits from commercial banks, Federal Reserve survey data and indicators of regional and agricultural economic conditions. We specify a panel regression with fixed effects to model how liquidity at agricultural banks has changed and to identify the most significant drivers.FindingsOur results suggest that small banks and banks with branch networks located in areas more concentrated in agricultural production bear the greatest risk of reduced liquidity.Practical implicationsPrior to the pandemic and more recently, lower deposit growth, combined with strong demand for agricultural loans, has led to reductions in liquidity at agricultural banks. Lower liquidity could reduce credit availability for farm borrowers and increase risks for banks that must rely on alternative sources of funding to meet loan demand.Originality/valuePrevious research has shown that exogenous shocks from other economic sectors, such as energy, can significantly affect bank liquidity, but research is limited on how agricultural bank liquidity is affected by downturns in the agricultural economy and other regional economic factors. Another contribution is this paper’s analysis of regional disparities in bank liquidity.

Government spending in the agricultural sector: Optimal ratio with lending and the impact on the agricultural production

An effective government agropolicy should be balanced: To reduce the state budget pressure, it is important to reduce public spending and encourage farmers to use agricultural loans. Reducing public spending should not lead to a shortage in the agricultural market. The paper aims to substantiate the directions of government agropolicy transformation based on the optimal ratio of public expenditures and loans in the agrosector and the dependence of agroproduction dynamics on state financing. The research base is data from 10 countries with different income levels (World Bank), presented in FAOSTAT for 2004–2021. For each country, the optimal (determined by the structural modeling method) and actual proportions between state financing and lending in the agrosector are compared, adjusted for the agroproduction index. The modeling showed that the share of public funds should increase in Germany, Israel, Italy, and the UK and decrease in Azerbaijan and Georgia; the current proportion is optimal in the USA, Russia, Turkey, and Ukraine. Based on a panel regression model with fixed effects, the influence of the actual level of state agrofinancing on the FAO Production Indices of the main types of agroproducts was determined. It is the largest for crops, meat, and milk (a decrease in state funding by USD 1 million threatens to reduce the respective indices by 4.5, 3.47, and 3.79 points), medium for cereals and sugar crops (according to points 2.69 and 2.11), and the smallest for livestock and non-food products (by 1.53 and 0.001 points, respectively).

Evaluation of the Financial Performance of Chikkamagaluru DCC Bank of Karnataka

The establishment of the cooperative banking system in India may be attributed to the enactment of the Cooperative Credit Societies Act in 1904. This legislation aimed to facilitate the provision of production credit to farmers. In 1912, amendments were made to the Act of 1904 to facilitate the establishment of central cooperative banks at the district level. The legislation was designed to give the act a federal character with three tiers in order to promote the growth of cooperative banks. The objectives are The objective is to analyse the Working Capital and Total Advances of DCC Bank in Chikkamagaluru District, as well as assess the Short-Term and Medium-Term Agricultural Loans offered by the same bank in the same district.

A comparative analysis of bank group-wise agricultural loan recovery performance in Haryana

A comparative analysis of bank group-wise agricultural loan recovery performance in Haryana

THE IMPACT OF SOCIO-ECONOMIC FACTORS OF HORTICULTURAL FARMERS ON ACCESS TO MICROFINANCE IN EAST JAVA

Almost all corporate financing in the agriculture sector is dependent on interest. Because the features of the agricultural sector are incompatible with the finance sector, banks often show little interest in funding the agricultural sector. The purpose of this study were Analyze the socio-economics factors that influence the decision of horticultural farmers in East Java in accessing microfinance. The method of determining the location of the research was carried out in two locations, namely Wonomulyo Village, Poncokusumo Subdistrict, Malang Regency, dan Pacet Village, Pacet Subdistrict, Mojokerto Regency. 160 farmers were chosen as the study's sample size using the proportionate stratified sampling technique and the Slovin formula. To answer these problems descriptive analysis, logistic regression analysis (logit) was used. Formal institutions assigned to channel the funds include government banks and private banks. Informal institutions that carry out the distribution of micro-credit funds are the private sector or institutions from the farmers themselves. The majority of farmers generally know that the level of formal financing sources is indeed lower, but administrative procedures are considered difficult. Based on the results of logistic regression analysis for the factors that influence the decisions of Horiculture farmers in East Java in accessing credit, including education, length of business, land area, and income. It is recommended that in order to formulate steps for the ease of taking out agricultural loan, Field Extension Officers, regional cooperatives, government banks, and private banks should conduct specific studies and take specific approaches.

Study on credit utilization pattern and repayment behaviour of agriculture loan borrowers of lead bank

Study on credit utilization pattern and repayment behaviour of agriculture loan borrowers of lead bank

Fresh or dry maize or both: Which is most economical and preferred by farmers?

As a staple crop of great importance in sub-Saharan Africa, maize is essential for the production of food for humans and animals, particularly in the raising of poultry and livestock. Smallholder farmers in Ghana are the main producers of maize, and they frequently have difficulties in turning their crop into a sustainable source of income. As a result, there is an increasing need for these farmers to look into other options such as switching from traditional dry maize production to growing fresh maize. This circumstance calls for a critical analysis to ascertain whether producing for fresh or dry maize markets yields higher profitability. Therefore, the main objective of this study is to estimate the profitability of Ghana's fresh and dry maize markets, examine the factors influencing farmers' market choices as well as rank the production constraints. Data was collected from 390 maize farmers using questionnaires. Gross margin analysis, multinomial logit regression and Kendall's Coefficient of Concordance, were the methods of analysis. According to the study, fresh maize yields a profit of 78.00 pesewas for every GH¢ 1.00 invested, both alternatives generate 71.00 pesewas, and dry maize yields 67.00 pesewas. This implies that even though all three businesses are profitable, fresh maize cultivation stands out as the most lucrative. The results of the multinomial logit regression analysis showed that the choice of maize production systems is influenced by socioeconomic characteristics, farming experience, and loan availability. The Kendall's Coefficient of Concordance analysis confirms consensus on constraints, with lack of finance, pest issues, poor roads, and low maize prices as key challenges. According to the report, farmers may increase their profits by diversifying their crops to include the fresh maize market. Additionally, the government could assist these farmers by making financing more accessible to them through collaborations with financial institutions and specially designed agricultural loan programs.

A Study on Agricultural Loans offered by NABARD to Farmers

This study delves into the comprehensive landscape of agricultural loans disbursed by the National Bank for Agriculture and Rural Development (NABARD) to farmers in India. The research scrutinizes the varied purposes for which these loans are extended, encompassing crop cultivation, animal husbandry, dairy farming, poultry, fisheries, and agro-processing. Emphasizing the different loan types – short-term, medium-term, and long-term – the investigation explores the interest rates associated with each category and evaluates the role of government subsidies in enhancing affordability. Additionally, the study investigates the credit delivery mechanism facilitated by NABARD through cooperative banks, regional rural banks, and commercial banks, ensuring an inclusive approach to reach farmers across diverse strata. The research underscores the technological impetus provided by NABARD, encouraging farmers to adopt modern agricultural practices and technologies. Special attention is given to risk mitigation measures, including crop insurance, designed to shield farmers from losses arising due to unforeseen circumstances. Keywords: NABARD, Agricultural Loans, Farmer Financing, Credit Delivery, Government Subsidies, Rural Development, Risk Mitigation, Financial Inclusion, Technological Adoption, Indian Agriculture.

Analysis of the impact of agricultural credits on agricultural mechanization in Türkiye

Agricultural mechanization is one of the high-cost important inputs used in agricultural production. Thanks to agricultural mechanization, time and manpower are saved greatly in the agricultural production process. Agricultural loans, one of the most important agricultural financing instruments, are considered necessary for agricultural enterprises to invest in agricultural mechanization. This study, which adopts a quantitative research method approach, aimed to analyze the impact of agricultural loans on agricultural mechanization in Türkiye using time series analysis. Within the scope of the purpose, annual data covering the period 1981-2022 were gathered from data sources related to loans and agricultural mechanization. A log-log model was constructed with loans as the independent variable and agricultural mechanization as the dependent variable, and ARDL bounds testing method was applied in the estimation of the model. According to the findings obtained from the estimation of the model, there was a long-term, positive, and statistically significant co-integration relationship between loans and agricultural mechanization variables. A 1% increase in the loan balance was found to increase agricultural mechanization by approximately 0.035%. On the other hand, the short-term relationship between the variables was found to be negative and statistically significant. Short-term deviations from the long-term equilibrium caused by shocks were shown to vanish by approximately 86% after 1 period. In this context, it is clear that the adaptation process between the variables is very rapid.

Empirical modeling of agricultural climate risk

Effective policies for adaptation to climate change require understanding how impacts are related to exposures and vulnerability, the dimensions of the climate system that will change most and where human impacts will be most draconian, and the institutions best suited to respond. Here, we propose a simple method for more credibly pairing empirical statistical damage estimates derived from recent weather and outcome observations with projected future climate changes and proposed responses. We first analyze agricultural production and loan repayment data from Brazil to understand vulnerability to historical variation in the more predictable components of temperature and rainfall (trend and seasonality) as well as to shocks (both local and over larger spatial scales). This decomposed weather variation over the past two decades explains over 50% of the yield variation in major Brazilian crops and, critically, can be constructed in the same way for future climate projections. Combining our estimates with bias-corrected downscaled climate simulations for Brazil, we find increased variation in yields and revenues (including more bad years and worse outcomes) and higher agricultural loan default at midcentury. Results in this context point to two particularly acute dimensions of vulnerability: Intensified seasonality and local idiosyncratic shocks both contribute to worsening outcomes, along with a reduced capacity for spatially correlated ("covariate") shocks to ameliorate these effects through prices. These findings suggest that resilience strategies should focus on institutions such as water storage, financial services, and reinsurance.

FACTORS IMPACTING FINANCIAL LITERACY OF FARMERS IN KALABURAGI, KARNATAKA

The empirical study was conducted in 2023 in Kalaburagi, Karnataka. This reseacrh evaluated farmers’ ‘’financial literacy’’ levels and their impact on financial management. The financial literacy of farmers was assessed through a standardized knowledge index. Financial literacy was measured according to the OECD Toolkit (Organization for Economic Co-operation and Development). In the study area, 29 percent of farmers were high financial literate, 32 percent were moderate, and 39 percent were low financial literate. The financial literacy of farmers needed to improve. It was noted that was significant, implying 67 percent of the variation. Moreover, the significant F ratio (18.52) indicated that thefarmers’ financial literacy was impacted by age, education, farm income, and bank accounts. Farmer’s financial literacy significantly affected crop insurance, investment, KCC, mobile banking, crop loans, and other agriculture loans. To reach the farmers, better coordination should be with financial literacy centers and banks.

Role of credit on mustard production and food security in a selected area of Sirajganj District in Bangladesh

Credit is a driving force behind increased crop productivity, and food security is essential to the general advancement of humanity. The current study was carried out to analyze the socioeconomic profile of the respondents, examine the loan components, evaluate the effect of credit on mustard production, and find out how many calories each household member consumes on a per capita basis. A sample size of sixty respondents was selected randomly from Sirajganj district in Bangladesh. Primary data were collected through a field survey using a semi-structured interview schedule. Descriptive statistics, the multiple linear regression models, and the modified OECD scale were used to analyze the data. The study found that most of the respondents were in the active age group, and half of the respondents had a secondary level of education. About half of the respondents belonged to the middle-income group. Two-thirds of the respondents received a large loan. It was found that credit had a positive impact on mustard production. The poverty rate was much higher than the national average in the study area. Along with specialized banks, other financial institutions should extend agricultural loans to increase mustard production and food security for rural poor households in Bangladesh.

The effect of crop insurance on agricultural loan delinquencies

AbstractThis study addresses how participation in the Federal crop insurance program influences agricultural loan delinquencies. To achieve this objective, we use 1994–2015 county‐level panel data for corn production in the Midwestern United States (US). Traditional linear fixed effect (FE) models, instrumental variable‐based FE estimation, and several robustness checks are used in the empirical analysis. Estimation results suggest that counties with higher levels of crop insurance participation tend to have statistically lower rates of agricultural loan delinquency. This is evidence that the US crop insurance program helps reduce financial stress and facilitates the continued viability of the agricultural credit system.

Differential taxation in agricultural credit market

AbstractThis study examines whether the market competitiveness of farm loan suppliers is affected by the US tax policy for the farm credit system (FCS) and its potential spillover on the farmers' cost of borrowing. We exploit the variation in the corporate income tax rate to estimate its relationship with the farm debt share of the FCS and the potential spillover effect on the estimated cost of borrowing for agricultural loans. Results suggest that a 10% rise in the state (federal) tax rate is associated with an increase in FCS's total farm debt market share by 1.76% (3.76%). A 10% rise in the FCS total farm debt market share tends to increase the cost of borrowing on agricultural loans by 0.06%. Overall, the findings imply that favorable tax treatment could increase FCS' competitiveness in the agricultural lending market. Also, an increase in the interest rate on farm debt is correlated with the increasing market share of FCS in the agricultural credit market. [EconLit Citations: Q14, N22, H2, H7, G21].

Constraints militating against the use of adaptation strategies to climate change effects by small-scale rice farmers in Northeastern, Nigeria

This study ascertained the constraints militating against the use of adaptation strategies to climate change effects amongst rice farmers in Northeastern Nigeria. Multi-stage sampling technique was used to select 300 rice farmers. The analytical tools used to analyze the data obtained were descriptive and inferential statistics. The result shows the used and unused adaptation strategies for drought resistant rice variety were 33.0% and 67.0%, heat resistant rice variety were 30.7% and 69.3%, short rice cycle seeds were 2.3% and 97.7%, early maturing rice variety were 32.7% and 67.3%, early planting were 32.0% and 68.0%, late planting were 33.0% and 67.0%, early harvesting were 32.7% and 67.3%, late harvesting were 31.7% and 68.3. The result on constraints militating against the use of adaptation strategies shows that the constraints with higher loading factors were low level of income (λ=0.799), low literacy level (λ=0.727), inadequate knowledge on how to cope with climate change related issues (λ=0.761), poor response to climate related issues (λ=0.782), poor financial support from NGOs (0.648), inadequate agricultural loans (0.655) and high administrative charges on loan (λ=0.555). Other constraints included inadequate extension workers (λ=0.583), inadequate extension contacts (λ=0.550), long bureaucracy in getting formal credit (λ=0.588), lack of reliable sources of information on climate change (λ=0.708), loans not readily available during farming season (λ=0.752), and inadequate financial support from government (0.428). Based on the findings of the study, it is concluded that low users of adaptation strategies were evident in the zone. Therefore, it is recommended that the government should encourage the use of adaptation strategies in the zone.