Factors Affecting Participation in Contract Farming of Smallholder Cavendish Banana Farmers in the Philippines

Loquias, Melissa P.; Digal, Larry N.; Placencia, Shemaiah Gail P.; Astronomo, Ivi Jaquelyn T.; Orbeta, Marvin Louie G.; Balgos, Carol Q.

doi:10.1007/s40003-021-00544-0

Cited by 11 publications

(6 citation statements)

References 16 publications

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“…This theoretical review aims to explore key concepts and theories relevant to agricultural loan pricing by banks in Ghana. Understanding these theoretical foundations provides insights into factors shaping loan pricing decisions and their implications for the agricultural sector (Rao, 2023;Kassegn and Endris, 2022;Loquias et al, 2022;Vassiliades et al, 2022;Abimbola, 2021).…”

Section: Brief Literature Reviewmentioning

confidence: 99%

“…Understanding these theoretical foundations provides insights into factors shaping loan pricing decisions and their implications for the agricultural sector (Rao, 2023; Yiadom et al. , 2022; Kassegn and Endris, 2022; Loquias et al ., 2022; Vassiliades et al. , 2022; Abimbola, 2021).…”

Section: Brief Literature Reviewmentioning

confidence: 99%

“…Ghana's agricultural lending market competitiveness shapes loan pricing dynamics. Loquias et al . (2022) found insights on contract farming participation in the Philippines, applicable to Ghana's smallholders.…”

Section: Brief Literature Reviewmentioning

confidence: 99%

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Agricultural loan pricing by banks in Ghana: a panel data analysis

Dziwornu,

Yiadom,

Narteh-yoe

2023

AJEMS

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PurposeThe cost of agricultural loans is a major constraint to the growth of the agriculture sector. This paper examines agricultural loan pricing by banks in Ghana using panel data analysis.Design/methodology/approachData were obtained from audited financial reports of 15 agricultural loan lending banks from 2010 to 2017. The study applies the random-effect model and the fixed-effect model in the analysis and uses the system generalized system method of moment to check the robustness of the results from the baseline models.FindingsThe study found that agricultural loan pricing by banks is significantly influenced by risk premium, cost of funds, loan impairment, agricultural growth rate and food inflation. Banks should leverage emerging technologies to de-risk agriculture loan pricing to allay the fear of default. Farmers should look for long-term and relatively cheaper funds to support agricultural loans. Increasing credit to the agricultural sector could increase output, thereby reducing food inflation uncertainty for competitive pricing of agricultural loans.Originality/valueAgriculture employs about 52% of Ghana's labor force, contributing about 20% to GDP. But it is “under” financed. This study leads the way in unraveling the factors accounting for the high prices of agricultural loans in Ghana. This study further contributes to policy development toward increasing credit to the agricultural sector.

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Section: Brief Literature Reviewmentioning

confidence: 99%

Section: Brief Literature Reviewmentioning

confidence: 99%

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Agricultural loan pricing by banks in Ghana: a panel data analysis

Dziwornu,

Yiadom,

Narteh-yoe

2023

AJEMS

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“…, 2021). This not only augments their profit margins but also reduces their default rate (Loquias et al. , 2022; Zhong et al.…”

Section: Analytical Framework For the Price Risk Management Of Large-...mentioning

confidence: 99%

“…Large-scale farmers no longer have to worry about price volatilities as the risk is transferred to buyers (Bellemare et al, 2021). This not only augments their profit margins but also reduces their default rate (Loquias et al, 2022;Zhong et al, 2023). These buyers (e.g.…”

Section: Analytical Framework For the Price Risk Management Of Large-...mentioning

confidence: 99%

Subjective preferences, liquidity constraints and price risk management under large-scale farm management

Peng,

2023

CAER

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PurposeLarge-scale farm management in China has developed rapidly in recent years. Large-scale farmers face substantial operating risks, requiring extensive price risk management. However, the agricultural insurance and futures markets in China are incomplete. This study aims to analyze the price-risk-management behaviors of large-scale farmers under incomplete market conditions, with a focus on the interconnections between large scale farmers' subjective preferences (risk preferences, time preferences), liquidity constraints and their price risk management.Design/methodology/approachThe authors construct an analysis framework to reveal the impact of large-scale farmers' risk preferences, time preferences and liquidity conditions on their price-risk-management behaviors under incomplete market conditions. Using data from field surveys and subjective preference experiments involving 409 large-scale grain farmers in China, an empirical analysis was conducted using the bivariate probit model.FindingsThe results show that risk-averse farmers will use risk transfer (such as contract farming) and risk diversification (such as multi-period sales) to avoid price risk. However, farmers subject to liquidity constraints and strong time preferences will not choose risk diversification, and the interaction between time preferences and liquidity constraints will strengthen this decision. The larger the farm-management scale, the greater the impact.Originality/valueThe authors focus on rapidly developed large-scale farm management in China. Appropriate price risk management is required by large-scale farmers due to their substantial operating risks. Considering the incomplete conditions of agricultural insurance and futures markets, the results of this study will help identify behavioral characteristics of large-scale farmers and optimize their price-risk-management strategies, further stabilizing large-scale farm management.

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Smallholder Inclusion Through Cooperative Contract Farming of Cavendish Banana Farmers in Davao del Norte, Philippines: A Meta‐Frontier Analysis

Sarmiento,

Rola‐Rubzen,

Fogarty

et al. 2024

Agribusiness

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As the third‐highest global supplier of Cavendish bananas, the Philippine banana industry has a vital role in rural development. We compared farmers' technical efficiency (TE) and production performance across different contract farming arrangements: individual contracts, cooperative contracts, and growers without a contract. Using a random sample of 186 farmers in Davao del Norte, Philippines, we used meta‐frontier Data Envelopment Analysis to calculate TE scores and then use a truncated regression with bootstrapping to model the efficiency sources. We applied propensity score matching to minimize observable bias resulting from self‐selection among farmers participating in contract farming. The results across returns‐to‐scale assumptions and matching methods reveal that cooperative contract farmers have significantly higher TE and revenue performance than individual and noncontract farmers, primarily due to high export‐quality production and associated premium prices. Individual contract farmers were also more technically efficient and had higher returns than noncontract farmers. Smallholder farmers tend to participate more in cooperative contract farming. Thus, cooperative contracts should include smallholder farmers in export value chains to improve smallholder farmer income. This strategy will lead to the formation of inclusive agrifood value chains in Mindanao, Philippines.

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Factors Affecting Participation in Contract Farming of Smallholder Cavendish Banana Farmers in the Philippines

Cited by 11 publications

References 16 publications

Agricultural loan pricing by banks in Ghana: a panel data analysis

Agricultural loan pricing by banks in Ghana: a panel data analysis

Subjective preferences, liquidity constraints and price risk management under large-scale farm management

Smallholder Inclusion Through Cooperative Contract Farming of Cavendish Banana Farmers in Davao del Norte, Philippines: A Meta‐Frontier Analysis

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