Analysis of credit needs of coffee farmers in Amadeo, Cavite, 2015

Date

6-2016

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Antonio Jesus A. Quilloy

Abstract

Coffee (Coffea sp.) is considered as one of the high value crops grown in the Philippines. The varieties that are commercially produced in the country are Arabica, Robusta, Excelsa and Liberica. The study analyzes the credit needs of coffee farmers in Amadeo, Cavite. In particular, the study aimed to: (a) determine the source of income of coffee farmers (b) determine the financial performance of coffee farms (c) determine the currents source of financing (d) determine the amount of financial requirements to be sourced out and (e) analyze the problems encountered in meeting the financial requirement. A total of 100 farmers were randomly selected in the top four coffee producing barangays in Amadeo namely: Banay-banay, Halang, Dagatan and Bucal. Demographic and socio-economic information, sources of capital, capital investment for farming, coffee yield, and farm costs were gathered. Descriptive statistics such as summations, average, and percentages were used to give a general overview. Based from the survey conducted, 63 percent of the farmers rely solely on farming as their livelihood and source of income aside from coffee farming such as being a government employee, non-government worker and business owner, to have a more stable monthly income to provide for his family. On the other hand, in order to determine the financial performance of the coffee farms, profitability and capital position were measured and tabulated. Results showed that the total cost of the farmer-respondent was Php 26, 236.00 while his average total returns amounted to Php 27, 691.70. The average net return is Php 1,455.70 with a 5.55% ROI. Based from the financial ratios, it was then found that in terms of current ratio, only 75 percent of its current liabilities can be paid from its current assets and it justifies the reason for credit need of coffee farmers in Amadeo. The identified current sources of financing were traders, relatives, neighbors, and cooperatives. It was It was found that most 58% of the farmers borrowed capital from traders due to a credit tie-up between the two that gave farmers easy access and availability of credit. On the other hand, the farmer respondents do not go to formal sectors to borrow capital because they have the fear of not being able to comply with the requirements, interest rates and repayment schemes. Meanwhile, the amount of the financial requirement is Php 7, 642.50 and it is determined through a cash flow based from their last production (December 2014-February 2015). The problems encountered in the study were categorized into two namely production and credit availment. It was found that the productivity of the old coffee trees that aged 40 to 60 years is low and needs to be rejuvenated in order to maximize yield. In terms of credit availment, the distance of borrowers to lenders was the leading hindrance. Both production and financial aspect are affected because these problems hamper the efficiency and productivity of the coffee farms. Coffee farming is still profitable if there is maximized input, other capital investments and additional capita made available in order for farmers to avail productivity-enhancing technology and other innovations.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2016 A14 C36

Document Type

Thesis

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