Factors that influence the decision of coffee farmers to take credit in North Sumatra

Abstract

Coffee is a national plantation commodity which plays an important role in the Indonesian economy. Capital is a significant issue for smallholder plantations in North Sumatra. The increase in capital is expected to increase coffee production. Capital obtained through credit will meet the need for funds for land preparation, planting, maintenance and harvesting. This study selected 50 respondents consisting of 25 who took credit and 25 farmers who did not take credit. Respondents were chosen purposively, information obtained by interview and using a questionnaire. Logistic regression analysis is used to determine the relationship of the factors analysed in this study and their influence to increase the likelihood of farmers to take credit. The results of the regression analysis showed that the nature of coffee plants, the nature of credit and credit services had a significant effect on the decision of coffee farmers to take credit in North Sumatra, while the personal aspects of farmers did not significantly influence the decisions of coffee farmers in taking credit in North Sumatra.