Epsilon Archive for Student Projects

Abstract

The purpose of this master thesis is to investigate how access to credit in Colombia's cacao production affects technology adoption. Technology adoption is defined as management practices, considering that low crop quality and productivity are the main problems faced by cacao farmers in Colombia. The empirical part focuses on the case of the cacao growing in 121 farms in three different municipalities located in the Southern region of the department of Tolima, Colombia. Data were obtained through primary sources from a farmer survey. Cluster analysis is used to construct two groups of management practices. Cluster membership is then explained in a regression model that includes among other variables the use of credit. Contrary to the initial hypothesis, there is no evidence of a positive impact of agricultural credit on technology adoption. These results could be used for a better allocation of credit access linked to the improvement of management practices like pruning and fertilization already being practiced by one group of farmers (Cluster 2) who are not the main receptors of agricultural credit. This case could hopefully contribute to an overall more efficient allocation of credit for the cacao farming in Colombia.