The Impact of Microloans on Small-scale Coffee Producers in Veracruz, Mexico

Gabriela Reifová

Master's thesis

Abstract:

During the last few decades, coffee farmers in Mexico became one of the poorest groups in the country. The causes are many: repeatedly falling prices of coffee on the international market, lack of technical support and coffee rust disease which negatively affects the production. Small and medium coffee farmers often suffer from financial exclusion and the only source of credit available for them are microloans provided by micro-financial institutions. Microloans are known to be a tool for poor people to help them out of poverty. Accordingly, the aim of this research was to analyse the effects of microloans on the economic situation of the coffee farmers. The research was conducted in the state of Veracruz as it is the second most important coffee producing state in Mexico. Based on a regression analysis, the study revealed that microloans obtained by coffee farmers had a positive and significant impact on the farm revenue. A regression analysis further suggested that processing of coffee production, governmental subsidies, education, insecticides and farm income from the previous year also had a positive significant impact on the farm revenue. On the contrary fertilizers, herbicides, off-farm job, and family workers had a negative significant impact on the farm revenue. It is recommended to improve capacitation and technical services provided by MFIs as there is a need for coffee farmers to start to produce better quality coffee and to focus on value addition in order to become competitive on the market. Coffee farmers should also diversify coffee production to secure themselves in the case of natural disasters.

Keywords

microcredit, small-scale agricultural producers, coffee, Mexico

Language used: English

Date on which the thesis was submitted / produced: 27. 4. 2018

Thesis defence

• Supervisor: doc. Dr. RNDr. Tomáš Ratinger

Czech University of Life Sciences Prague

Faculty of Tropical AgriSciences

Master programme / field:
Tropical Agriculture / International Development and Agricultural Economics