Effects of Crowdsourcing on the Productivity and Profitability of Palay Farms: The Case of Cropital in Sta. Cruz, Laguna, 2018-2019

Date

1-2020

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Bates M. Bathan

Committee Member

Bates M. Bathan, Antonio Jesus A. Quilloy, Agham C. Cuevas

Abstract

The study analyzed the effects of Cropital's crowdsourcing on the productivity and profitability of palay farms in Sta. Cruz, Laguna. It specifically aimed to describe the socio­economic characteristics of palay farmer borrowers and their farm-specific profile; to describe the credit services offered by Cropital and other credit sources; to analyze input use and production; to analyze factors affecting productivity; to assess profitability; and to identify the credit-related problems encountered by the palay farmer borrowers and Cropital and provide recommendations. A total of57 palay farmer borrowers from Cropital and non-Cropital credit sources were interviewed. Data on the amount borrowed, cost of credit and trainings attended were gathered to determine the difference in the credit services offered. Data on the level of farm input usage and production were also gathered and used in the OLS production estimation to identify the variables affecting farm production. Data on the cost incurred and revenue gained by the farms were used to determine the net income and rate of return ratios.

Results showed that Cropital borrowers availed significantly less credit because of the amount limit set by the crowdsourcing company to their borrowers. However, cost of credit was higher for non-Cropital borrowers because of the higher interest rate and service fee imposed by their credit sources. Trainings and seminars conducted by Cropital to their borrowers was found to be done informally and were limited to selected farmer borrowers. The results of the OLS estimation showed that yield was negatively affected by the dummy variable Cropital borrower because of the lessened inputs usage due to the limited credit available for Cropital borrowers. Specifically, the amount of fertilizer and pesticide used in the farm were significantly lower for Cropital borrowers while nitrogen and animal­labor showed significant effect on yield. Results on the cost and returns analysis showed Cropital borrowers had higher net income because of the significant difference in farmgate price. The difference was attributed to the farms located in selected barangays that commanded higher prices. Meanwhile, rate of return on capital for both farmer groups was higher than their interest rate which meant they were both profitable. However, RROC was higher for non-Cropital because of the higher amount of capital brought by credit. Results on the sensitivity analysis showed that when the farmgate price difference was eliminated, the net income and RROC were both higher for non-Cropital borrowers given their higher level of production.

Cropital should raise the amount of credit available for their borrowers to enable them to purchase and use more inputs in their farm that would have positive effects on the farmer borrowers' level of production. This would also positively increase their net income and RROC. Meanwhile, farmer borrowers that seek lower interest rate and transaction cost could continue borrowing from Cropital.

Language

English

LC Subject

Agriculture, Production

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2020 A14 B67

Document Type

Thesis

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