Agricultural Finance for Small-Scale Farmers

• The study examines the lived experiences of small-scale farmers in Finance, Lucena City.
• It aims to understand how they manage resources with limited access to agricultural credit.
• The study seeks to understand agricultural finance struggles of small-scale farmers and help them access deeper knowledge.
• Agricultural finance modernizes farming, strengthens global food security, and is crucial for poor rural people.
• A 2021 survey indicates 73% of farmers and agricultural laborers lack bank accounts due to lack of funds and documentation.
• Small-scale farmers need agricultural credit for essential investments due to financial constraints, low income, and high expenses.
• Agricultural loans can bridge the income-expense gap for rural farmers with consistent low income.
• Agricultural financing can address obstacles in the rural economy and enable small farmers' socioeconomic development.
• Agricultural financing improves agriculture and the rural economy, and is deliberately institutionalized for small farmers.

Statement of the Problem

• The study addresses the lived experiences of small-scale farmers in Finance, Ibabang Talim, Lucena City.
• It seeks to answer how farmers manage resources without access to agricultural credits.
  • Including if they have limited access to capital.
  • Including if they have a lack of financial services.
• The study also addresses why farmers have difficulty obtaining financial support from banks.
• How agricultural marketing and inadequate transport affect farmer income is considered.
• The study questions how farmers sustain operations with fluctuating incomes.
  • Including if they have limited access to technology and information.

Hypotheses

• H0: There is no significant distress experienced by successful small-scale farmers compared to unsuccessful ones in Ibabang Talim, Lucena City.
• H1: Financial challenges lead to significantly lower success in farming for small-scale farmers in Ibabang Talim, Lucena City.

Theoretical Framework

• “Access to financial services by farmers in emerging economies: implication for empirical analysis” by Dadson Awunyo-Vitor (2018).
• “Does Contract Farming Improve Productivity and Income of Farmers? A Review of Theory and Evidence" by Anh Tru Nguyen (2015).
• Dadson Awunyo-Vitor's theory studies issues influencing farmer's access to financial services in developing nations, which include factors like loans, savings, credit, and insurance.
• Key factors in the theory are supply-side (financial institutions, legislation) and demand-side (income, farm size, education).
• Mobile banking can improve access in remote areas.
• The theory advocates for a research-based strategy to improve financial access in emerging economies.
• Anh Tru Nguyen's theory suggests contract farming boosts output and revenue by providing farmers with improved inputs, tech, training, and market knowledge.
• The study emphasizes fair contracts, power dynamics, and supportive legislation, as exploitative contracts limit benefits.

Conceptual Framework Model

• The IPO model includes the lived experiences of small-scale farmers which includes:
  • Finance
  • Limited access
  • Lack of information
• The process includes:
  • Gathering response of farmers experiences
  • Administering questionnaires
  • Organization of farmers responses
  • Information and concepts
• Output
  • The lived experiences of the small scale farmers in finance and how they allocate financial resources.

Definition of Terms

• Small-scale farmers: Participants involved in the study.
• Lived experience: Participating in events as small-scale farmers.
• Finance: Managing transactions, income, agricultural credits, and capital to sustain the farm.

Significance of the Study

• Farmers in Ibabang Talim, Lucena City can gain insights on overcoming financial challenges and improving livelihoods.
• Understanding their experiences helps determine effective strategies.
• Informs wise decisions for better agricultural practices and financial stability.
• The research paper informs farmers about government policy decisions and support programs.
• Understanding challenges helps the government adapt financial literacy programs to give better access to credit and develop suitable market opportunities for farmers in unbanked areas.
• Enhances future researchers' knowledge about the experiences of small-scale farmers to have better solutions to the difficulties.

Scope and Limitation

• The focus is on the challenges of small-scale farmers with agricultural finance in 2025 in Ibabang Talim, Lucena City.
• The limitation is a limited sample size due to time and distance constraints, and focuses only on from Ibabang Talim Lucena City.

Review of Related Literature

• Khan (2024): Asserts constraints to agricultural finance in 31 developing and underdeveloped countries need a Qualitative Evidence Synthesis (QES) method which can be used as a reliable framework for conceptualization and policy formation.
• Birhanu (2024:) Supply and demand constraints like delivery model design, geographic dispersion, collateral requirements, political meddling, macroeconomic instability, inefficiency, ineffective policies, limited access to info, limited financial literacy, poor value chains are significant limitations.
• Solomos (2024): Small scale farmers need to overcome credit constraints, seasonal cash flow, regulatory complexity, lack of financial expertise, and market volatility.
• Khanal (2020): Farm operators' gender, off-farm work, land area ownership, farm specialization, and use of a smart phone with Internet had a substantial impact on credit constraint.
• Combary (2022): Binding cost limitation has resulted in underutilization of fertilizer and manure, as well as overutilization of seeds.
• Yuan (2024): The key challenges include inadequate digital agriculture policies, limited availability of digital applications, difficulties in adapting uniform technologies to smallholders' diverse contexts, significant group disparities, and constraints imposed by social and cultural factors.
• Savoy (2022): Critical to smallholders' access to essential inputs. In addition Smallholder farmers also experience considerable post-harvest losses due to a lack of adequate storage.
• Dhillon (2023): Small-scale farmers have always had limited access to advanced agricultural technologies. A combination of smart sensors, IoT solutions, and smartphone apps has enormous promise.
• Stefan (2020): Indicates finance has been identified as one of the main causes of "global land rush".
• Department of Agriculture-Agricultural Credit Policy Council (2020): The risks involved are real and usually beyond the control of the bank and the farmer.
• BTC bank (2025): the most risky thing that small farmers can do is wait too long putting their farm at risk of foreclosure or bankruptcy.
• Owade (2024): Access to finance remains one of the most critical challenges facing Kenya's smallholder farmers.
• Onyango (2024): Reports that smallholder farmers provide more than 30% of the world's food and support about 500 million people worldwide.
• Batagoda (2024): Without access to affordable smartphones or computers, these farmers are unable to leverage digital platforms for financial transactions, savings, or accessing credit.
• Leasing(2023): Farmers can use agricultural finance to protect their farming business from farming challenges which are hampered by a lack of funds.
• Aceron (2024): Discovered that small-scale farmers use moderate financial management methods for savings and investment, cash management, credit management, and insurance.
• Soekarni (2024): looked into the function of agricultural financial technology (fintech), specifically peer-to-peer lending (P2PL), in improving small farmers' financial literacy.
• Zhillima (2024): Discovered capacity costs have been discovered to be associated with access to past training, access to a bank account, and the practice of keeping financial records.
• Dacuycuy (2020): In recent years retail lending has become more affordable and accessible leading to difficulties.
• Khanal (2022): Small farms had limited financial assets and resource capabilities.
• Wulandari (2023): Indicated financial recording is challenging due to farmers' inadequate understanding demonstrating the need of assisting farmers with financial documentation.
• Zhang (2023): Insisted that Farmers' income is influenced by several elements, including poverty alleviation funding, agricultural production, sales income, employment, and entrepreneurial income.
• Kumari (2023): Reports that This study looks at the short- and long-term effects of bank loans on agriculture sector growth.
• Ramos-Sandoval (2024): Learned characteristics that regularly affect farmers' access to loans, it is critical to implement the financing model in the agricultural sector.
• Lasak (2022): Studies varied financial issues faced by farmers Maharashtra.
• Mahale (2024): farmers involved in agribusiness encounter a variety of financial issues that affect their profitability and long-term viability.
• Manga'na(2023): Small and medium-sized enterprises in the agriculture sector make a substantial contribution to economic change in developing nations.
• Sanglay (2021): Noted that financial literacy is built on attitude and behavior.
• Shafiai (2024): Many farmers cannot generate enough profit or capital to become self-sufficient for the second cycle of farming.
• Sevatta (2024): Stated that there is still a long way to go before Zambia's rural smallholder farmers can completely access and utilize agricultural financing.

Research Methodology

• This chapter is about the methodology and techniques used to define and contextualize the study. Includes the study strategy, population, data gathering methods, statistical analysis methodologies, and research location.

Research Design

• Study follows a phenomenological research design which is a qualitative research approach that focuses on interpreting how people experience their lives.
• Researchers chose to conduct the study since it allows exploration of the lived experiences of small-scale farmers in finance.

Research Locale

• Ibabang Talim, Lucena City

Research Population

• Population consists of 10 farmers from Ibabang Talim, Lucena City, done to due to time constraints and the distance from the research site.
• Farmers were chosen using purposive sampling because they have experience with agricultural struggles and financial difficulties

Sampling Method

• Purposive sampling is done based on knowledge, expertise, or experiences in agricultural finance.

Data Gathering Procedure

• Includes obtaining ethical approval for the research, informing participants about the study's purpose and developing interview guides for consistency and focus.
• The primary method of data collection is semi-structured interviews which allows for audio recording to be transcribed for analysis.
• Gathered data will be analyzed using a thematic approach to identify difficulties and economic stability.