From Enemy to Friend: Participatory Action Research to develop A farmers' debt management Approach

Abstract

        The research aims to 1) test the management of farmer debt problems using three approaches: reducing expenditures, increasing income, and debt consolidation; and 2) study the factors affecting the success of farmers’ debt management in accordance with the three approaches. This research is a second phase and used participatory action research and employed the use of interviews, in-depth interviews, and group discussions among five community member volunteers. One person chose expenditure reduction, one chose additional income, and three chose debt consolidation. The results showed that choosing a debt management approach requires consideration of the capacity and vulnerability of households. The expenditure reduction approach showed that the household expenditures could only be reduced by a small portion since most of the expenditures were for production investments. Farmers who chose the approach to increase income needed to have high education, be young and active, and have IT skills. The debt consolidation approach did not reduce the amount of debt but reduced the number of sources of debt repayment and debt flow. This research found that farmers do not view debt negatively because they can use loans allocated by the state and financial institutions to ease the financial burden. Therefore, farmers can turn debt from an enemy to a friend and maintain the farmer's small agricultural economy for a long time.