Credit access through warehouse receipt system and farm productivity of Smallholder coffee farmers in Mbinga district, Tanzania
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The Warehouse Receipt System (WRS) offers an opportunity to smallholder farmers by providing collateral guarantees to financial institutions to provide credit for agricultural inputs through their crops stored at the warehouses. The objective of this paper was to examine the contribution of agricultural inputs credit accessed through WRS on coffee farms productivity in Mbinga District, Tanzania. A household survey from a sample of 390 smallholder coffee farmers was conducted. Ordinary Least Squares (OLS) was used to examine the impact of WRS agricultural-credit on coffee yield. Study results show that credit accessed through WRS had a significant (p≤0.05) and positive influence on coffee yield. Moreover, sex, years of schooling, and extension services had a significant effect on coffee yields. The intervention policies are needed in order to enable more farmers to access the WRS services, extension services, education and increasing women’s participation in WRS in the study area.
The Warehouse Receipt System (WRS) offers an opportunity to smallholder farmers by providing collateral guarantees to financial institutions to provide credit for agricultural inputs through their crops stored at the warehouses. The objective of this paper was to examine the contribution of agricultural inputs credit accessed through WRS on coffee farms productivity in Mbinga District, Tanzania. A household survey from a sample of 390 smallholder coffee farmers was conducted. Ordinary Least Squares (OLS) was used to examine the impact of WRS agricultural-credit on coffee yield. Study results show that credit accessed through WRS had a significant (p≤0.05) and positive influence on coffee yield. Moreover, sex, years of schooling, and extension services had a significant effect on coffee yields. The intervention policies are needed in order to enable more farmers to access the WRS services, extension services, education and increasing women’s participation in WRS in the study area.
Keywords
credit, farm productivity, warehouse receipt system, agricultural inputs credit, smallholder coffee farmers