Financial literacy practices on family farms

Abstract

Financial literacy has attracted significant interest in the past two decades with researchers predominantly focusing on two dimensions of its conceptualisation; knowledge and application. This paper answers calls for research on how context shapes financial literacy in Micro, Small and Medium-Sized Enterprises (MSMEs) using a practice framework drawn from established literacy theory. Financial literacy practices manifest in events and are influenced and shaped by social, cultural, temporal, technological, historical and institutional circumstances. This context-driven approach facilitates the examination of financial literacy in MSMEs where the owner-manager's financial literacy is entwined with that of the enterprise's practices. Using in-depth longitudinal case studies, we show how social and financial literacy practices on family farms are intrinsically interlinked and frame the timing of financial activities, the roles and tasks people undertake, the location where these activities occur, and how they are articulated. Institutional power relationships manifest in the disconnect between farm level financial literacy practices, many of which are informal and idiosyncratic, and those required by banks and government agencies. This power divide leads to frustration and sometimes apparent indifference to conducting more formal financial literacy practices. Temporality also emerges as a critical contextual factor. We identify the important moments in the farming calendar when farmers are focused on the financial aspects of the farm and propose that educational programmes aimed at improving the farmers' financial literacy could be more effectively targeted using a social practice lens.