| Abstrak/Abstract |
Agricultural credit is a vital policy in improving farm
performance since agricultural households face financial constraints in
their business. This study aims to: (1) examine the impact of credit s on
agricultural productivity while investigating the difference in impact
generated by loans originating from governmental program loans and non-
program loans and; (2) identify the characteristics of farm households that
influence the use of credit in their business. This study employed cross-
sectional micro-data at the household level drawn from the 2013
Indonesian Agricultural Census, in which 86,922 rice farm households
were randomly selected as the research sample. The model was examined
by using Two-Stage Least Square to avoid the selectivity bias. Results
show that credit originated from government programs has a small impact
on agricultural productivity, although the significant correlation appears.
Furthermore, the use of credit, both government programs, and non-
programs are determined by socio-economic aspects, agricultural subsidy,
perceptions on risks, and perception on-farm profitability. Based on the
results, the provision of credit to agricultural activities has to be supported
by the provision of supporting incentives, such as agricultural counseling
and irrigation facilities, in order to boost agricultural productivity
effectively. |
