Aug 2026· Perspectives on Advanced New Generations of Global and Local Economic Horizons· Vol 2, pp. 34-54· 0 citations· 24 references
Abstract
This study examines the effectiveness of organic fertilizer subsidies and cooperative financial support in shaping the profitability and business sustainability of a farmers' savings and loan cooperative in West Sumatra Province, Indonesia. A quantitative explanatory design was applied to 115 farmer-members who had received the organic fertilizer subsidy through the cooperative's revolving fund scheme. Data were collected using a structured Likert-scale questionnaire and analyzed through validity and reliability testing, classical assumption testing, and multiple linear regression using two structural models. The results show that subsidy effectiveness and cooperative financial support jointly explain 32.6% of the variance in business profitability, while profitability together with the two exogenous variables explains 50.3% of the variance in business sustainability. Both subsidy effectiveness and cooperative financial support have a significant positive effect on profitability (p < 0.001), and profitability, in turn, significantly and positively affects sustainability (p < 0.001), confirming a partial mediation pattern. The findings suggest that organic fertilizer subsidies deliver their strongest welfare impact when channeled through cooperative institutions that simultaneously strengthen farmers' access to affordable credit and savings services. The study contributes to the literature by linking subsidy-policy effectiveness with cooperative financial intermediation and long-term sustainability outcomes, an intersection rarely examined jointly in prior research on Indonesian farmer institutions. Policy implications for subsidy targeting and cooperative capacity-building are discussed.
Fertilizer subsidy policy has long been a central instrument of Indonesian agricultural policy, yet its effectiveness in improving farm profitability and long-term farming sustainability, particularly following the shift toward organic fertilizer subsidization, remains underexamined. This study analyzes the effectiveness of organic fertilizer subsidies and their impact on the profitability and sustainability of rice farming in Kabupaten Solok, West Sumatra, Indonesia. Using a comparative survey design, primary data were collected from 120 rice-farming households (60 subsidy recipients and 60 non-subsidized farmers) over one planting season. Subsidy effectiveness was evaluated using the five-rights framework; profitability was assessed through Revenue-Cost (R/C) and Benefit-Cost (B/C) ratio analysis; and sustainability was evaluated using a multidimensional Rapid Appraisal ordination index. A Cobb-Douglas production function with a subsidy-participation dummy variable was estimated to isolate the subsidy's contribution to output while controlling for land, seed, fertilizer, and labor inputs. Results indicate an overall subsidy effectiveness score of 74.3% (fairly effective), with right-place performing best and right-time weakest. The organic-subsidized group recorded significantly higher net farm income, R/C ratio, and sustainability index than the conventional group. Regression results confirmed a positive and significant effect of subsidy participation on rice output (coefficient = 0.076, p < 0.05). These findings support improved subsidy targeting and distribution scheduling to enhance profitability and long-term sustainability.
H. Atmanti, Sri Rahayu Tri, Astuti· Perspectives on Advanced New...· 0 citations
This study examines how financial management and agricultural institutions are associated with farm profitability through production efficiency as a mediating mechanism. The unit of analysis is the individual farm business managed by food-crop farmers in Maros Regency, South Sulawesi, Indonesia. A quantitative explanatory design was used, and survey data from 150 farmers were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that financial management and agricultural institutions have positive and significant relationships with production efficiency, with path coefficients of 0.667 and 0.490, respectively. Production efficiency is also positively related to farm profitability (0.618), while the direct relationships of financial management (0.222) and agricultural institutions (0.203) with profitability remain significant but smaller than their mediated pathways. Bootstrapping results indicate significant indirect effects from financial management to profitability through production efficiency (0.412) and from agricultural institutions to profitability through production efficiency (0.303), confirming partial mediation. The model explains 64.3% of the variance in production efficiency and 75.3% of the variance in farm profitability. These findings suggest that managerial and institutional interventions are more likely to improve profitability when they are explicitly directed toward more efficient input use, cost control, and productivity improvement.
The study sought to determine the extent to which profitability mediates the relationship between government support for small scale farming (SSF) and food security.
The authors used the quantitative research method and the design was a cross-sectional survey. The study obtained the sample of the respondents from small-scale farmers in North East, North central and South West Nigeria using a questionnaire as the data collection instrument. Convergent and divergent techniques served to assure of the validity of the instrument while composite reliability served as the reliability of the instrument. The data were analysed using structural equation modelling.
Results showed that government’s provision of subsidies for farm inputs and low-cost credits significantly influence the profitability of small-scale farmers and thus enhances food security. In addition, the profitability of farming mediates the relationship between government’s support for SSF and food security as the profitability of farming motivates people to farm with the expectation of profitable returns. The study makes a theoretical and empirical contribution to knowledge.
The first limitation is the restriction of the contributors to members of cooperative societies. The study relied on members of cooperative societies to ensure objectivity as well as to facilitate accessibility to farmers in the area. The non-inclusion of farmers that are not members of cooperative societies is a constraint. A third limitation was the non-availability of records, kept by local farmers, of their activities especially as related to government support. However, the farmers’ experiences and answers were instrumental in getting the necessary information.
Adequate provision of food will enhance food security and lead to zero hunger consistent with Sustainable Development Goal 2. This will help to eliminate frustration and the attendant social vices.
The integration of the theory of how government support for agriculture affects productivity and the theory of net farm exit to explain how government support for SSF contributes to food security. Secondly, although some of the extant studies imply profitability, this study is about the first to use profitability to mediate the relationship between government support for SSF and food security. Lastly, the proposed model of government support for SSF and food security provides useful insights that can contribute to policymaking for the enhancement of agricultural productivity.
H. Inegbedion, J. Olaghere, Joy Iember Khaki· Journal of Agribusiness in D...· 0 citations
Smallholder farmers form the backbone of agri-food systems and economic development in many developing countries. Yet, most remain trapped in subsistence farming due to persistent market inefficiencies. This study evaluates the effectiveness of market interventions in enhancing farm-level profitability and market-level profit margins for smallholder vegetable farmers through aggregation and improved market access. A cross-sectional survey of 360 vegetable farmers was analyzed using a two-step analytical framework comprising Generalized Linear Latent and Mixed Models (GLLAMM) and Weighted Least Square (WLS) approaches, applied separately at the farm and market levels. The findings indicate that participation in the LOOP program significantly increases profitability and profit margins by strengthening market connectivity, reducing transaction costs, and improving access to price information. Conversely, higher vegetable production costs per decimal are negatively associated with profit margins, highlighting the importance of cost management in sustaining profitability. On the other hand, LOOP farmers who use leased land are more likely to make a profit with a greater number of vegetable production. The effects of market distance are mixed: proximity to upazila centers boosts profit margins, while greater distance from district roads reduces profitability due to elevated transportation costs and price fluctuation. Interestingly, education, road quality, and wealth indicators show no significant impact on profitability, suggesting that practical skills and market dynamics outweigh formal socio-economic characteristics. By integrating farm-level and market-level analyses within a single empirical framework, this study provides a more comprehensive understanding of the effectiveness of aggregation service-based market intervention. The findings underscore the importance of scaling up aggregation schemes alongside investments in rural market information systems, and cost-reduction strategies to enhance profitability and market integration of smallholder farmers.
Dipok K Choudhury, M. Alam, I. A. Begum et al.· Frontiers in Sustainable Foo...· 0 citations
To promote sustainable and efficient agricultural development, cooperatives play a crucial role in helping farmers access inputs, markets and technologies. This study aims to provide empirical evidence on how cooperative participation enhances both economic outcomes and sustainable farming behavior in Vietnam's dragon fruit sector, an export-oriented yet under-researched crop.
The study employs household survey data collected from dragon fruit farmers in Binh Thuan Province, comparing cooperative members and non-members in terms of VietGAP certification, technology adoption, production costs and income per hectare. To address potential selection bias, Propensity Score Matching and Endogenous Switching Regression/Probit models are applied.
Results reveal that cooperative membership significantly increases the likelihood of adopting resource-efficient technologies and complying with food safety standards. Moreover, members achieve higher income per hectare and improved production efficiency. Cooperatives help reduce technical and financial constraints, coordinate resources and provide policy and market information that support sustainable agricultural transformation.
This study is limited by its use of cross-sectional data, which restrict the ability to capture changes in farmers’ behavior and fully address endogeneity over time. Additionally, the findings may have limited external validity, as the analysis focuses on dragon fruit farmers in Binh Thuan province and may not represent other regions in Vietnam.
By empowering smallholders and improving their resilience to market and climate risks, cooperatives contribute to safer, more inclusive and environmentally sustainable food systems in Southeast Asia.
This study contributes to the literature by examining the dual impact of cooperative membership on both farm income and the adoption of sustainability-related innovations, an area often overlooked in prior research. Focusing on Vietnam’s export-oriented dragon fruit sector, it provides new empirical evidence on how cooperatives support sustainable practices and compliance with standards such as VietGAP. Methodologically, the study addresses selection bias using rigorous econometric approaches, offering more reliable and policy-relevant insights into the role of cooperatives in promoting both economic and environmental outcomes.
Giang T. C. Tran, Y. Chomei, Duc Tran· Journal of Agribusiness in D...· 0 citations
Agriculture, including dairy farming, is a key sector for Kosovo's economy, but faces major challenges such as limited access to financial resources and barriers to investment in technology and productivity improvement. The aim of this study is to analyze the impact of financial resources on the economic performance of dairy farms in Kosovo. Data collection was conducted on a sample of 136 dairy farms, and the information obtained was analyzed using SPSS software. The influence of financial resources was evaluated using multiple linear regression (MLR) and the ANOVA test. The results of the study show that the use of a single financial resource is not sufficient to ensure good economic performance of dairy farms. In particular, subsidies significantly increase farm income (β = 0.290, p = 0.001), while loans negatively impact profitability (β = -0.294, p = 0.003). The findings suggest that combining subsidies with loans enhances financial stability. It is recommended that policymakers should improve access to diversified financial sources and develop targeted financial instruments to support the sustainability of dairy farms in Kosovo.
Unknown authors· Bulgarian Journal of Agricul...· 0 citations
