Does access to agricultural credit help disaster-affected farming households to invest more on agricultural input?

Masaood Moahid, Ghulam Dastgir Khan, M.D. Abdul Bari and Yuichiro Yoshida

Agricultural Finance Review, 2022, vol. 83, issue 1, 96-106

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: Agriculture; Agricultural credit; Input; Expenditure; Disaster; Agricultural policymaking; Investment capacity; Farming households (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eme:afrpps:afr-12-2021-0168

DOI: 10.1108/AFR-12-2021-0168

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