Does access to agricultural credit help disaster-affected farming households to invest more on agricultural input?
ISSN: 0002-1466
Article publication date: 27 May 2022
Issue publication date: 19 January 2023
Abstract
Purpose
Natural calamities impair agricultural households' ability to invest in their farms. Facilitating access to agricultural credit may assist farmers in the face of negative revenue shocks. The aim of this study is to investigate the impact of agricultural credit on the agricultural input expenditure of disaster-affected farmers in Bangladesh.
Design/methodology/approach
The study utilizes data on 2,519 disaster-affected farming households from Bangladesh's Household Income and Expenditure Study (HIES) 2016–2017, which employs a nationwide representative five-year interval survey. Further, propensity score matching (PSM) identification strategy is used to estimate the average treatment effect on the treated (ATET), and Mahalanobis distance matching (MDM) is used for the robustness test. In addition, heterogeneous analysis has been conducted to explore the impact of agricultural credit on different types of farming households.
Findings
The findings reveal that access to agricultural credit has a favorable and significant effect on farm input expenditure for disaster-affected farmers. Therefore, agricultural credit accessibility could be utilized as a policy tool to assist disaster-affected farmers in improving their investment capacity, and hence, agricultural output.
Originality/value
This study, using a quasi-experimental design of access to agricultural credit on agricultural input expenditures of the disaster-affected farming households in coastal areas of Bangladesh to estimate the causal effect.
Keywords
Acknowledgements
Funding: This study is partly supported by Japan Society for the Promotion of Science grant number 20K01632 and JP20J13842.
Declarations of interest: The authors declare no conflict to interest.
Citation
Moahid, M., Khan, G.D., Bari, M.D.A. and Yoshida, Y. (2023), "Does access to agricultural credit help disaster-affected farming households to invest more on agricultural input?", Agricultural Finance Review, Vol. 83 No. 1, pp. 96-106. https://doi.org/10.1108/AFR-12-2021-0168
Publisher
:Emerald Publishing Limited
Copyright © 2022, Emerald Publishing Limited