Agricultural Credit and Rice Farming Performance in Indonesia

In business economics, credit can be categorised is the one of the inputs, including in farming activities. Therefore, providing credit is truly important to improve farms performance and then it may enhance the welfare of farmers. In general, this project has a mission to be an evidence how to improve farmers welfare throughout credit provision. Specifically, this study has three objectives. Firstly, this study would identify the factors which affect of household rice farmers to access credit. Secondly, this study assess the impact of credit access on the rice farmers performance. In addition, this project would also investigate risk behaviour and insurance adoption among rice farmers as a tools of risk management. This research is planned to take place in two places: on-site study (at university) and in Indonesia for field work for which the researcher will collect some data (secondary and primary) related to the research. The field work is meant to be the activity to collect data needed to be analysed. The amount of research subjects will be decided upon further discussion with advisors. To obtain primary data that are not provided by some institutions, the researcher will collect the data through interviews, questionnaire, and documentation studies. The main output is to produce high quality academic papers as part of dissertation to fulfil PhD course. More importantly, there are at least two major contributions from the proposed study. First, to provide a sound theoretical and empirical contribution to measure the access of credit and it’s impact on the farm performance as well as the risk management model which is rare enough of the study. Secondly, the results of this research hopefully can contribute to financial industry e.g banks and insurance, when dealing with the lending activity in the rice farming sector. Policy maker also can utilise the result to make appropriate policy regarding to the access and impact of credit, mainstreaming the risk management among risk farmers and to design the optimum business model of agricultural credit to ensure the sustainability the supply of fund.