DETERMINANTS OF THE ABILITY OF FARM HOUSEHOLDS TO BUY AGRICULTURAL MATERIALS ON CREDIT FROM THE SUPPLIER IN HAU GIANG PROVINCE

The aim of this study is to analyze the determinants of the ability of farm households to buy agricultural materials on credit from the supplier in Hau Giang province, thereby proposing solutions to improve this situation. With the use of data of 210 farm households in Hau Giang province collected over the period of 2019-2020, this study applies Logit regression model to investigate the determinant factors of the access to trade credit and Tobit regression model to examine the decisive factors of the amount of trade credit granted to farm household by supplier of agricultural materials. The results of logit model show that the household's ability to buy agricultural inputs on account has a positive correlation with average income, the relationship between the household and the agent and access to bank loans. The results of Tobit model indicates that several factors have positive, statistically significant relationships with the amount of deferred payment for agricultural inputs by farm households, including: the value of agricultural land, average income, the relationship between the household and the agent and access to bank loans. However, this study has not found any statistically significant associations between the duration of living in the locality, the distance from the farm household to the agent, the householders’ experience in farming, the age of the household head and the access to trade credit nor the amount of deferred payment in buying production materials of farm households. Considering the results, several recommendations are given for farm households, suppliers of agricultural materials, local government and authorities to increase the use of trade credit in the study area.