Smallholder funding schemes and farm productivity in rural Makonde District, Mashonaland west, Zimbabwe

Abstract

The paper investigated the impact of small holder financing model on farm productivity in the context of the ever-increasing funding gap in agriculture. The research was anchored on social capital theory and the Keynesian economics. The study adopted a post positivism philosophical orientation in addressing the seemingly increasing funding gap. Data was collected from 150 small holder farmers dotted around Makonde district of Mashonaland west using stratified sampling technique. The sample size was 200 as guided by the Yamane formula. The paper utilised structural equation modelling using SPSS extension module AMOS (analysis of moment structures). The structured questionnaire used to collect data comprised of close ended items and was validated using discriminant validity as well as convergent validity. The results showed that the mostly used funding model was bank credit in the form of micro credit loans, rotating savings credit association among others, while contract farming and multilateral donor schemes were rarely used. Smart joint venture schemes were least used. Results show that joint venture schemes were positive related to farm productive and goes beyond funding to impart key skills to farmers. Bank credit scheme was found to be negatively related with farm performance. This was attributedto high transaction costs in lending institutions. Government funding was found to be inefficient. It was recommended that to address the small holder funding gap, resources should be channelled through the agriculture value chain, through agribusiness as these were better placed understand the needs of farmers. Government should only provide conduce operating environment for strategic partnership and joint venture schemes to flourish.