How does credit affect yields? Lessons from potato and rice farmers in Uganda

Bjorn Van Campenhout

No 542249, Working Papers of LICOS - Centre for Institutions and Economic Performance from KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance

Abstract: Despite favorable agro-ecological conditions, agricultural productivity in Uganda remains low. Crop intensification methods, such as the application of inorganic fertilizers and pesticides and the use of improved planting material, are promoted for in-creasing yields. But farmers are often financially constrained, leading to under-adoption of such methods. Therefore, facilitat-ing credit provision to smallholder farmers may be an effective way to increase crop intensification and boost agricultural yields. We find that among potato and rice farmers part of the credit received indeed seems to affect productivity through in-tensification. However, a large share of credit is used for other purposes, such as paying school fees or investing in businesses or social functions. We argue that this fungibility is not necessarily problematic, as we find important indirect effects, where credit affects yields through improved agricultural knowledge transfer, market access, and social network learning effects. Our findings call for a more comprehensive approach to credit provision and a longer run perspective.

Date: 2016-03
References: Add references at CitEc
Citations:

Published in Policy note , issue 18, pages 1-4

Downloads: (external link)
https://lirias.kuleuven.be/retrieve/389903 (application/pdf)
KU Leuven intranet only, request a copy at https://lirias.kuleuven.be/handle/123456789/542249

Related works:
Working Paper: How does credit affect yields? Lessons from potato and rice farmers in Uganda (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ete:licosp:542249

Access Statistics for this paper

More papers in Working Papers of LICOS - Centre for Institutions and Economic Performance from KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance
Bibliographic data for series maintained by library EBIB ().