IDEAS home Printed from https://ideas.repec.org/p/ags/aaea16/235682.html
   My bibliography  Save this paper

Impact of microcredit on small-farm agricultural production: evidence from Brazil

Author

Listed:
  • Gori Maia, Alexandre
  • Eusebio, Gabriela S.
  • Silveira, Rodrigo L. F.

Abstract

The purpose of this study is to analyze the impact of PRONAF credit program on small-farm agricultural production in Brazil. The study compares farmers’ production value considering the obtainment of PRONAF credit, controlling for farm, farms and production system characteristics. The data set consists of the 2006 Agricultural Census, which considers 5.2 million of small farmers in Brazil. In addition to using multiple linear regression model to estimate the net impact of PRONAF on total production value, we applied a propensity score matching method in order to identify pairs of family farms relatively homogeneous, one that accessed the credit and other that did not, estimating the average difference between their production values. Regression analysis showed that the access to PRONAF had a positive and significant net effect on production value of around 18%. In addition, propensity score matching results seemed to exhibit similar evidence to those obtained by regression model. Farmers that obtained PRONAF microcredit presented a production value higher than others, with the difference ranging from 6% to 20%. The impact is lower in the less developed regions, which is characterized by forestry, subsistence agriculture and low technology adoption. For more developed regions, where farmers are more specialized and integrated in the market, the PRONAF has shown relevant net impacts on the production value.

Suggested Citation

  • Gori Maia, Alexandre & Eusebio, Gabriela S. & Silveira, Rodrigo L. F., 2016. "Impact of microcredit on small-farm agricultural production: evidence from Brazil," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235682, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235682
    DOI: 10.22004/ag.econ.235682
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/235682/files/AAEA_Pronaf_FullPaper_VersionSubmitted.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.235682?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. Khandker, Shahidur R. & Faruqee, Rashid R., 2003. "The impact of farm credit in Pakistan," Agricultural Economics, Blackwell, vol. 28(3), pages 197-213, May.
    2. Assunção, Juliano & Chein, Flávia, 2007. "Condições de crédito no Brasil rural," Brazilian Journal of Rural Economy and Sociology (Revista de Economia e Sociologia Rural-RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 45(2), pages 1-41, June.
    3. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    4. Anjali Kumar, 2005. "Access to Financial Services in Brazil," World Bank Publications - Books, The World Bank Group, number 13821, December.
    5. Li, Xia & Gan, Christopher & Hu, Baiding, 2011. "The welfare impact of microcredit on rural households in China," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 404-411, August.
    6. Marlon Gomes Ney & Rodolfo Hoffmann, 2003. "Desigualdade de renda na agricultura: o efeito da posse da terra," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 4(1), pages 113-152, January-J.
    7. Fernando de Mendonça Dias & André Matos Magalhães & Raul Silveira Neto & Alexandre Rands Barros, 2004. "A Experiência Recente Do Pronaf Em Pernambuco: Uma Análise Através De Propensity Score," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32nd Brazilian Economics Meeting] 108, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    8. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    9. van Rooyen, C. & Stewart, R. & de Wet, T., 2012. "The Impact of Microfinance in Sub-Saharan Africa: A Systematic Review of the Evidence," World Development, Elsevier, vol. 40(11), pages 2249-2262.
    10. Pereira, Sebastião Eustáquio & Figueiredo, Adelaide dos Santos & Loureiro, Paulo R. A., 2006. "Avaliação do impacto da utilização de crédito, da educação e da escolha do canal de comercialização na horticultura: caso do núcleo rural do Distrito Federal," Brazilian Journal of Rural Economy and Sociology (Revista de Economia e Sociologia Rural-RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 44(4), pages 1-27, December.
    11. Coleman, Brett E., 2006. "Microfinance in Northeast Thailand: Who benefits and how much?," World Development, Elsevier, vol. 34(9), pages 1612-1638, September.
    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. Eusébio, Gabriela Dos Santos & Gori-Maia, Alexandre & Silveira, Rodrigo Lanna F., 2017. "Measuring the Farm Level Impact of Rural Credit: A Two-stage Approach," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258551, Agricultural and Applied Economics Association.
    2. Thanh, Pham Tien & Saito, Katsuhiro & Duong, Pham Bao, 2019. "Impact of microcredit on rural household welfare and economic growth in Vietnam," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 120-139.
    3. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos, 2019. "20 years of research in microfinance: An information management approach," International Journal of Information Management, Elsevier, vol. 47(C), pages 183-197.
    4. Erhardt, Eva, 2017. "Microfinance beyond self-employment: Evidence for firms in Bulgaria," MPRA Paper 79294, University Library of Munich, Germany.
    5. Erhardt, Eva Christine, 2017. "Microfinance beyond self-employment: Evidence for firms in Bulgaria," Labour Economics, Elsevier, vol. 47(C), pages 75-95.
    6. Islam, Asadul & Nguyen, Chau & Smyth, Russell, 2015. "Does microfinance change informal lending in village economies? Evidence from Bangladesh," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 141-156.
    7. Ana Venâncio & João Jorge, 2022. "The role of accelerator programmes on the capital structure of start-ups," Small Business Economics, Springer, vol. 59(3), pages 1143-1167, October.
    8. Giau Bui, Dien & Chen, Yehning & Lin, Chih-Yung & Lin, Tse-Chun, 2021. "Risk-taking of bank CEOs and corporate innovation," Journal of International Money and Finance, Elsevier, vol. 115(C).
    9. Nakano, Yuko & Magezi, Eustadius F., 2020. "The impact of microcredit on agricultural technology adoption and productivity: Evidence from randomized control trial in Tanzania," World Development, Elsevier, vol. 133(C).
    10. Mohamed Arouri & Nguyen Viet Cuong, 2020. "Does microcredit reduce the gender gap in employment? Evidence from Egypt," African Development Review, African Development Bank, vol. 32(2), pages 111-124, June.
    11. Kazushi TAKAHASHI & Takayuki HIGASHIKATA & Kazunari TSUKADA, 2010. "The Short‐Term Poverty Impact Of Small‐Scale, Collateral‐Free Microcredit In Indonesia: A Matching Estimator Approach," The Developing Economies, Institute of Developing Economies, vol. 48(1), pages 128-155, March.
    12. Gregory S. Crawford & Nicola Pavanini & Fabiano Schivardi, 2018. "Asymmetric Information and Imperfect Competition in Lending Markets," American Economic Review, American Economic Association, vol. 108(7), pages 1659-1701, July.
    13. Olga Gorelkina & Ioanna Grypari & Erin Hengel, 2019. "One strike and you’re out! The Master Lever’s effect on senatorial policy-making," Working Papers 201906, University of Liverpool, Department of Economics.
    14. Widiarto, Indra & Emrouznejad, Ali, 2015. "Social and financial efficiency of Islamic microfinance institutions: A Data Envelopment Analysis application," Socio-Economic Planning Sciences, Elsevier, vol. 50(C), pages 1-17.
    15. Calani, Mauricio & Paillacar, Manuel, 2022. "The pass-through of loan-loss-provisioning on mortgage lending: Evidence from a regulatory change," Journal of Banking & Finance, Elsevier, vol. 135(C).
    16. Paramasivam Ramasamy & Umanath Malaiarasan, 2023. "Agricultural credit in India: determinants and effects," Indian Economic Review, Springer, vol. 58(1), pages 169-195, June.
    17. Busu, Mihail & Caraiani, Petre & Hadad, Shahrazad & Incze, Cynthia Bianka & Vargas, Madalina Vanesa, 2021. "The performance of publicly funded startups in Romania," Economic Systems, Elsevier, vol. 45(3).
    18. Deininger, Klaus & Liu, Yanyan, 2013. "Economic and Social Impacts of an Innovative Self-Help Group Model in India," World Development, Elsevier, vol. 43(C), pages 149-163.
    19. Mekdim D. Regassa & Mohammed B. Degnet & Mequanint B. Melesse, 2023. "Access to credit and heterogeneous effects on agricultural technology adoption: Evidence from large rural surveys in Ethiopia," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 71(2), pages 231-253, June.
    20. James Roumasset, 2004. "Rural Institutions, Agricultural Development, and Pro-Poor Economic Growth," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 1(1), pages 61-82, June.

    More about this item

    Keywords

    Agricultural and Food Policy; Agricultural Finance; Community/Rural/Urban Development; Crop Production/Industries; Financial Economics;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:aaea16:235682. 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: https://edirc.repec.org/data/aaeaaea.html .

    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.