Financial Management Practices and Profitability of Small-Scale Farmers in A Disintermediated Market in Digos City

Abstract

Financial management, a detrimental factor in business survivability, is given little attention in the agriculture sector, especially among small agri-enterprises like small-scale farmers who rely entirely on selling their produce as their source of income. Thus, this study aimed to ascertain the level of financial management practices of small-scale farmers trading in disintermediated markets and their profitability and examine the significant relationship between the two variables. Simple random sampling was utilized during the selection, comprising 150 small-scale farmers in Digos City. This quantitative study used a descriptive, predictive design through an adapted-standardized research questionnaire. Findings revealed that small-scale farmers have a moderate level of overall financial management practices in terms of savings and investment, cash management, credit management, and insurance. Further, only cash management and savings and investment have a statistically significant correlation with profitability, whereas credit management and insurance proved to have none statistically. Nonetheless, overall financial management practices have a statistically significant correlation with profitability. Finally, the researchers recommended that financial institutions and governments organize informative seminars on financial management practices for rural farmers. This study could provide valuable insights into effective financial management practices and aid smallholders achieve greater financial sustainability and profitability.