Does Credit Access Affect Decision-making within Farmer Groups? Evidence from Smallholder Coffee Farmers: Case Study in Bondowoso, Indonesia

Abstract

Background: The government and numerous institutions have pushed the formation of farmer groups as one of the agricultural development initiatives to increase the well-being of coffee producers. However, many coffee farmers are still hesitant to join owing to a variety of concerns. This lack of interest is frequently associated with financing challenges for agricultural capital via lending access. The goal of this study is to investigate the factors that influence farmers’ decisions to join farmer groups, particularly in terms of finance access. Methods: This study was carried out in East Java’s coffee production area, notably in the Sumber Wringin District of Bondowoso Regency. During the 2023 agricultural season, the sample consisted of 173 coffee producers from the examined area. To create a homogeneous sample of coffee farmers, a multistage sampling procedure was used and the data were analyzed using binary logistic regression (logit biner). Result: Farmers who join farmer groups are influenced by criteria such as their age, length of education, quantity of produce, land size and labor. According to field research, credit access has no effect on small coffee farmers who join farmer groups. Farmers who do not belong to farmer groups can nevertheless obtain agricultural finance. Similarly, gender and the number of dependents in the family had little bearing on farmers’ decisions to join farmer groups.