IDEAS home Printed from https://ideas.repec.org/a/ags/areint/364298.html
   My bibliography  Save this article

Financing from agricultural supply stores as a solution for increasing productivity and welfare of potato farmers

Author

Listed:
  • Zamzami, Zamzami
  • Junaidi, Junaidi
  • Elfindri, Elfindri

Abstract

Purpose. The study identifies and assesses the factors that influence potato farmers in Jambi Province, Indonesia, choosing agricultural store financing over other sources evaluates the causal effects of this financing on income and productivity, compares production costs across different financing sources, and examines the terms, payment mechanisms, and flexibility of agricultural store financing. Methodology / approach. The research used a mixed-methods approach, integrating qualitative and quantitative data. Data were collected through in-depth interviews, questionnaires, observations, and documentation from 211 potato farmers in Kerinci Regency. The qualitative data were analysed using content analysis. In contrast, the quantitative data were examined using a binary logit model and Propensity Score Matching (PSM) to assess the impact of financing choices on productivity and income. Results. The findings reveal that agricultural supply stores are the preferred financing source for potato farmers due to guaranteed input availability, technical support, and flexible payment options. Although input costs from agricultural supply stores are slightly higher than self-financing, they are lower than those from other external sources. The analysis indicates that farmers with larger landholdings and higher production costs are likely to choose agricultural store financing. Additionally, farmers reported increased incomes and productivity due to the flexibility and support provided by agricultural supply stores. Originality / scientific novelty. The novelty of this study is that it focuses on the financing patterns from agricultural supply stores, a common but less documented phenomenon in Jambi Province. It provides new insights into agricultural supply store financing dynamics and its impact on farmers’ productivity and welfare. Practical value / implications. The study offers practical policy recommendations for the government to support more effective financing models. It highlights the need for government involvement to make agricultural store financing more sustainable and beneficial for farmers. The findings can also be adapted to understand financing dynamics in other agricultural sectors.

Suggested Citation

  • Zamzami, Zamzami & Junaidi, Junaidi & Elfindri, Elfindri, . "Financing from agricultural supply stores as a solution for increasing productivity and welfare of potato farmers," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 11(1).
  • Handle: RePEc:ags:areint:364298
    DOI: 10.22004/ag.econ.364298
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/364298/files/6_Zamzami_article.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.364298?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Debabrata Samanta, 2023. "Estimating impact of technological adoption in farming in Bihar: a propensity score matching approach," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 50(7), pages 1007-1016, February.
    2. Koblianska, Inna & Seheda, Serhii & Khaietska, Olha & Kalachevska, Larysa & Klochko, Tetiana, . "Determinants of potato producer prices in the peasant-driven market: the Ukrainian case," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(3).
    3. Savita Shankar, 2022. "Innovation in Agriculture Financing Using Inter-Organizational Governance Flexibility: Case Study of an Agriculture Value Chain Financier in India," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 23(1), pages 65-75, December.
    4. Nametshego Gumbi & Lucas Gumbi & Hossana Twinomurinzi, 2023. "Towards Sustainable Digital Agriculture for Smallholder Farmers: A Systematic Literature Review," Sustainability, MDPI, vol. 15(16), pages 1-20, August.
    5. Leonard Onyiriuba & E.U. Okoro Okoro & Godwin Imo Ibe, 2020. "Strategic government policies on agricultural financing in African emerging markets," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 80(4), pages 563-588, April.
    6. Olena Havrylchyk & Marianne Verdier, 2018. "The Financial Intermediation Role of the P2P Lending Platforms," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(1), pages 115-130, March.
    7. Thi Tam Duong & Tom Brewer & Jo Luck & Kerstin Zander, 2019. "A Global Review of Farmers’ Perceptions of Agricultural Risks and Risk Management Strategies," Agriculture, MDPI, vol. 9(1), pages 1-16, January.
    8. Bo Song & Jing Zhao & Panpan Zhang, 2022. "A Study on Factors Influencing the Efficiency of Rural Agriculture Financial Support in China," Sustainability, MDPI, vol. 14(22), pages 1-13, November.
    9. Xiujuan Tian & Manhua Wu & Lin Ma & Ning Wang, 2020. "Rural finance, scale management and rural industrial integration," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 12(2), pages 349-365, January.
    10. Ding Xiuling & Lu Qian & Li Lipeng & Apurbo Sarkar, 2023. "The Impact of Technical Training on Farmers Adopting Water-Saving Irrigation Technology: An Empirical Evidence from China," Agriculture, MDPI, vol. 13(5), pages 1-20, April.
    11. Balana, Bedru B. & Mekonnen, Dawit & Haile, Beliyou & Hagos, Fitsum & Yimam, Seid & Ringler, Claudia, 2022. "Demand and supply constraints of credit in smallholder farming: Evidence from Ethiopia and Tanzania," World Development, Elsevier, vol. 159(C).
    12. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 717-737.
    13. Khanal, Aditya R. & Omobitan, Omobolaji, 2020. "Rural Finance, Capital Constrained Small Farms, and Financial Performance: Findings from a Primary Survey," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 52(2), pages 288-307, May.
    14. Steven Sonka & Hyeonsuh Lee & Sonali Shah, 2023. "The YieldWise Approach to Post-Harvest Loss Reduction: Creating Market-Driven Supply Chains to Support Sustained Technology Adoption," Agriculture, MDPI, vol. 13(4), pages 1-20, April.
    15. Julián F. Becerra-Encinales & Paloma Bernal-Hernandez & Jorge A. Beltrán-Giraldo & Alexandre P. Cooman & Luis H. Reyes & Juan C. Cruz, 2024. "Agricultural Extension for Adopting Technological Practices in Developing Countries: A Scoping Review of Barriers and Dimensions," Sustainability, MDPI, vol. 16(9), pages 1-20, April.
    16. Md Aslam Mia, 2022. "Social Purpose, Commercialization, and Innovations in Microfinance," Springer Books, Springer, number 978-981-19-0217-8, March.
    17. Mikaël Akimowicz & Richard Vyn & Harry Cummings & Karen Landman, 2018. "An introduction to mixed methods research in agricultural economics: The example of farm investment in Ontario's Greenbelt, Canada," Post-Print hal-02328930, HAL.
    18. Joan Robinson, 1979. "The Generalisation of the General Theory and other Essays," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-16188-1, July.
    19. Francis Lwesya & Adam Beni Swebe Mwakalobo, 2023. "Frontiers in microfinance research for small and medium enterprises (SMEs) and microfinance institutions (MFIs): a bibliometric analysis," Future Business Journal, Springer, vol. 9(1), pages 1-18, December.
    20. Matteo Migheli, 2024. "Land-Use Rights and Informal Credit in Rural Vietnam," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 10(1), pages 409-434, March.
    21. Zulgani Zulgani & Junaidi Junaidi & Dwi Hastuti & Ernan Rustiadi & Andrea Emma Pravitasari & Fadwa Rhogib Asfahani, 2023. "Understanding the Emergence of Rural Agrotourism: A Study of Influential Factors in Jambi Province, Indonesia," Economies, MDPI, vol. 11(7), pages 1-26, June.
    22. Rajveer Dhillon & Qianna Moncur, 2023. "Small-Scale Farming: A Review of Challenges and Potential Opportunities Offered by Technological Advancements," Sustainability, MDPI, vol. 15(21), pages 1-16, October.
    23. Varadarajan, Rajan, 2023. "Resource advantage theory, resource based theory, and theory of multimarket competition: Does multimarket rivalry restrain firms from leveraging resource Advantages?," Journal of Business Research, Elsevier, vol. 160(C).
    24. Kucher, Anatolii, . "Soil fertility, financial support, and sustainable competitiveness: evidence from Ukraine," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 6(2).
    25. Alessandro Olper & Daniele Curzi, 2022. "Impact of Climate Change in Agriculture: Estimation, Adaptation, and Mitigation Issues," Natural Resource Management and Policy, in: Sara Valaguzza & Mark Alan Hughes (ed.), Interdisciplinary Approaches to Climate Change for Sustainable Growth, chapter 0, pages 289-311, Springer.
    26. HardiwanDadang & Amir Amri & Junaidi Junaidi & Delis Arman, . "The linkages and impact of plantation-based sectors on economy and poverty in Jambi province, Indonesia: Miyazawa’s input-output model," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 5(3).
    27. Amanj Mohamed Ahmed & Deni Pandu Nugraha & István Hágen, 2023. "The Relationship between Capital Structure and Firm Performance: The Moderating Role of Agency Cost," Risks, MDPI, vol. 11(6), pages 1-17, June.
    28. Daniel Gladwell & Gurleen Popli & Aki Tsuchiya, 2022. "Predictors of becoming not in education, employment or training: A dynamic comparison of the direct and indirect determinants," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 185(S2), pages 485-514, December.
    29. Yuyu Liu & Duan Ji & Lin Zhang & Jingjing An & Wenyan Sun, 2021. "Rural Financial Development Impacts on Agricultural Technology Innovation: Evidence from China," IJERPH, MDPI, vol. 18(3), pages 1-17, January.
    30. Xiujuan Tian & Manhua Wu & Lin Ma & Ning Wang, 2020. "Rural finance, scale management and rural industrial integration," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 12(2), pages 349-365, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Changjun Zheng & Sinamenye Jean-Petit, 2023. "The Effects of the Interactions Between Agro-Production, Economic, and Financial Development on Bank Sustainability," SAGE Open, , vol. 13(2), pages 21582440231, June.
    2. Wang, Jingyu & Peng, Lu & Chen, Jiancheng & Deng, Xiangzheng, 2024. "Impact of rural industrial integration on farmers' income: Evidence from agricultural counties in China," Journal of Asian Economics, Elsevier, vol. 93(C).
    3. Ifeanyi Mbukanma & Vikela Liso Sithole & Yiseyon Sunday Hosu, 2025. "Exploring the Factors Enhancing Marketability of Coastal Agricultural Products in Rural South Africa," Economies, MDPI, vol. 13(5), pages 1-16, May.
    4. Halil D. Kaya, 2021. "The Impact Of The 2008 Global Crisis On The Efficiency Of The Financial System," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 5, pages 86-97, October.
    5. Nshakira-Rukundo, Emmanuel & Kamau, Juliet Wanjiku & Baumüller, Heike, 2021. "Determinants of uptake and strategies to improve agricultural insurance in Africa: a review," Environment and Development Economics, Cambridge University Press, vol. 26(5-6), pages 605-631, October.
    6. Bianchi, Benedetta, 2018. "Structural credit ratios," ESRB Working Paper Series 85, European Systemic Risk Board.
    7. Alessandro Giovannini & Maurizio Iacopetta & Raoul Minetti, 2013. "Financial Markets, Banks, and Growth : Disentangling the links," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 105-147.
    8. Bingjing Mei & Arshad Ahmad Khan & Sufyan Ullah Khan & Muhammad Abu Sufyan Ali & Jianchao Luo, 2022. "Complementarity or Substitution: A Study of the Impacts of Internet Finance and Rural Financial Development on Agricultural Economic Growth," Agriculture, MDPI, vol. 12(11), pages 1-19, October.
    9. Su, Fangfang & Tao, Sumin & Ying, Ruiyao, 2025. "Agricultural transformation in the digital age: Digital inclusive finance and the development of new agricultural business entities," Finance Research Letters, Elsevier, vol. 72(C).
    10. Halil D. Kaya, 2021. "The Impact Of The 2008 Global Crisis On The Depth Of The Financial System," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 5, pages 5-18, October.
    11. Yang Peng & Yiwei Liu & Liyu Mao & Jiahong Zhang & Jieru Zhu & Shuisheng Fan, 2025. "Can Agricultural Sustainable Development and Rural Industrialization Be Achieved Simultaneously? The Practice of Rural Industrial Integration from China," Agriculture, MDPI, vol. 15(16), pages 1-25, August.
    12. Muhammad Sajjad Khan & Dr. Muhammad Suhail Sharif, 2023. "Unravelling the Agripreneurial Mindset: Exploring the Interplay of Subjective Norms, Entrepreneurial Orientation, Attitude, Perceived Behavioral Control, and Agripreneurship Intention," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(4), pages 274-281.
    13. Gantian Zheng & Weiwei Wang & Chang Jiang & Fan Jiang, 2023. "Can Rural Industrial Convergence Improve the Total Factor Productivity of Agricultural Environments: Evidence from China," Sustainability, MDPI, vol. 15(23), pages 1-20, November.
    14. Halil D Kaya, 2024. "The Financial Crises, Income Levels And The Depth Of The Financial System," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 24-34, December.
    15. Yafei Wang & Huanhuan Huang & Jing Liu & Jin Ren & Tingting Gao & Xinrui Chen, 2023. "Rural Industrial Integration’s Impact on Agriculture GTFP Growth: Influence Mechanism and Empirical Test Using China as an Example," IJERPH, MDPI, vol. 20(5), pages 1-21, February.
    16. Zhenyu Qi & Zixing Wu & Yuezhou You & Xiaoying Zhan, 2024. "Can Rural Industrial Convergence Alleviate Urban–Rural Income Inequality?: Empirical Evidence from China," Land, MDPI, vol. 14(1), pages 1-30, December.
    17. Abdelmonem Lotfy Mohamed Kamal & Mostafa E. AboElsoud & Khaled Abdella, 2023. "Modeling Finance–Growth Nexus in MENA Region Economies: A Panel Data Analysis," Economies, MDPI, vol. 11(12), pages 1-18, November.
    18. Yun Shen & Yanxi Jing & Yiyue Liu, 2025. "Unveiling the Spatial Coupling Dynamics and Coordination Mechanisms Between Digital Inclusive Finance and Rural Industrial Integration Development," Land, MDPI, vol. 14(3), pages 1-25, February.
    19. Lyubomir Lyubenov & Anelia Lyubenova, 2023. "Bulgaria’s Financial Markets In Agribusiness - Size, Structure And Development Trends," Economic Archive, D. A. Tsenov Academy of Economics, Svishtov, Bulgaria, issue 2 Year 20, pages 48-61.
    20. Qian, Zongxin & Tu, Yonghong & Zhou, Zinan, 2022. "The impact of financial development on the income and consumption levels of China’s rural residents," Journal of Asian Economics, Elsevier, vol. 83(C).

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:areint:364298. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: http://are-journal.com/are .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.