Table of Contents
Economics Research International
Volume 2014 (2014), Article ID 309352, 8 pages
http://dx.doi.org/10.1155/2014/309352
Research Article

Rural Credit and Farms Efficiency: Modelling Farmers Credit Allocation Decisions, Evidences from Benin

1Unit of Economy and Rural Development, Gembloux Agro-Bio-Tech, University of Liege, Passage des Déportés, 5030 Gembloux, Belgium
2Program of Agricultural Policy Analysis (PAPA), National Institute of Agricultural Researches of Benin (INRAB), 01 BP 128 Porto-Novo, Benin
3Institute of Project and Regional Planning, Faculty of Agriculture, Nutrition, and Environmental Management, Justus-Liebig University of Giessen, Senckenbergstraße 3, 35390 Giessen, Germany
4Department of Agricultural Economics and Rural Sociology, Faculty of Agronomy, University of Parakou, BP 123 Parakou, Benin

Received 23 April 2014; Revised 4 August 2014; Accepted 4 August 2014; Published 28 August 2014

Academic Editor: Thanasis Stengos

Copyright © 2014 Comlan Hervé Sossou et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper analyses farmers’ credit allocation behaviors and their effects on technical efficiency. Data were collected from 476 farmers using the multistage sampling procedure. The stochastic frontier truncated-normal with conditional mean model is used to assess allocation schemes effects on technical efficiency. Tobit model reveals the impact of farmers’ sociodemographic characteristics on efficiency scores. Results reveal that farm revenue (about 2,262,566 Fcfa on average) is positively correlated with land acreage, quantity of labour, and costs of fertilizers and insecticides. Farmers’ behaviors respond to six schemes which are categorized in two allocations contexts: out-farm and in-farm allocations. The model shows that only scheme (e) positively impacts technical efficiency. This scheme refers to the decision to invest credit to purchase better quality of pesticides, herbicides, fertilizers, and so forth. The positive effect of the scheme (c) may be significant under conditions of farmers’ education level improvement. Then, scheme (e) is a better investment for all farmers, but effect of credit allocation to buy agricultural materials is positive only for educated farmers. Efficiency scores are reduced by household size and gender of the household head. Therefore a household with more than 10 members and a woman as head is likely to not be technically efficient.