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The role of access to finance from different finance providers in production risks of horticulture in Indonesia

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  • Eliana Wulandari
  • Miranda P M Meuwissen
  • Maman H Karmana
  • Alfons G J M Oude Lansink

Abstract

This paper aims to investigate the association between perceived production risk of horticultural farms and access to finance from different finance providers. The collection of data was conducted among 434 farmers in Indonesia particularly farmers produced mango, mangosteen, chili and red onion. Production risk was measured by the coefficient of variation, skewness, kurtosis and the 25th percentile. Depending on the risk measure, a lower production risk was found for commercial credit from banks and flexible payments of inputs to kiosks. Conversely, we did not find any lower production risk associated with finance provided by farmers’ associations and other sources such as family and friends. Results of this study are useful for policy makers, finance providers and supply chain actors in agriculture. For policy makers, the results of this study can help in designing policy to enhance farmers’ access to finance, whereas finance providers and supply chain actors, such as traders, obtain insight into whether their financial provisions effectively reduce production risk.

Suggested Citation

  • Eliana Wulandari & Miranda P M Meuwissen & Maman H Karmana & Alfons G J M Oude Lansink, 2021. "The role of access to finance from different finance providers in production risks of horticulture in Indonesia," PLOS ONE, Public Library of Science, vol. 16(9), pages 1-12, September.
    • Handle: RePEc:plo:pone00:0257812
    DOI: 10.1371/journal.pone.0257812
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    References listed on IDEAS

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    2. Shiferaw T. Feleke & Richard L. Kilmer & Christina H. Gladwin, 2005. "Determinants of food security in Southern Ethiopia at the household level," Agricultural Economics, International Association of Agricultural Economists, vol. 33(3), pages 351-363, November.
    3. Ogada, Maurice Juma & Nyangena, Wilfred & Yesuf, Mahmud, 2010. "Production risk and farm technology adoption in the rain-fed semi-arid lands of Kenya," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 4(2), pages 1-16, June.
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