Agricultural Credit Access and Smallholder Rice Farmer Productivity in Irrigation Schemes in Tanzania

Abstract

Access to credit is crucial for enhancing productivity among smallholder rice farmers in Tanzania's irrigation schemes. Despite its importance, various barriers impede these farmers from securing the necessary financial services. This study investigates factors influencing credit access and its impact on productivity among smallholder rice farmers in irrigation schemes managed by co-operative societies in Tanzania. The study adopted a cross-sectional research design whereby data from 382 smallholder rice farmers in three Agricultural Marketing Co-operative Societies (AMCOS) were collected during the 2021 cropping season. Data were collected through a structured questionnaire and key informant interviews. Data were analyzed using Statistical Package for Social Sciences (SPSS) whereby descriptive statistics and the binary logistic regression model were performed. The results show that access to credit has a positive impact on the productivity of smallholder rice farmers. Model results indicated that level of education, frequent extension services, access to information, and membership in social groups determine access to agricultural credit among smallholder rice farmers in irrigation schemes. Thus, to improve rural farmers' access to credit, Agricultural Marketing Co-operative Societies should promote education, financial literacy programs, membership in social groups, and adopt innovative credit models like microfinance and group lending. The Local Government Authority should ensure that policy interventions focus on supporting rural financial institutions as a strategy for improving credit access, boosting agricultural productivity, and enhancing the livelihoods of smallholder rice farmers in Tanzania.