THE EFFECT OF CREDIT ON THE PRODUCTIVITY OF CASSAVA FARMERS IN OSUN STATE, NIGERIA

Abstract

The financing of agricultural activities, has been identified as an essential and crucial aspect of agriculture, as it is an important precursor needed to determine the quantity and quality of inputs in terms of: technology, materials, and labour that can be used on the farm and also greatly affect the level of productivity of farmers. One primary source of finance is credit and many farmers borrow different types of fund either from formal or informal sources. The study examined the effect of credit on the productivity of cassava farmer in Osun state, Nigeria. Multistage sampling technique was used to select respondent for this study. A total of 150 respondents consisting of seventy-five credit users and seventy-five non-credit users; were used for the study. Data were collected from primary source using a well structured questionnaire and analysed using descriptive statistics (frequency distribution table, standard deviation, percentages and means) and econometric analysis (Tobit regression model, Probit regression model, Ordinary Least Square Regression Model, Chow test, Kendall’s Coefficient of concordance and Tornquist Theil Total Factor Productivity index). The result of the study shows that majority (61.3%) of non-users of credit applied for credit but did not obtain it, 21% reported of high interest rate, thus they could not complete the requirement of obtaining credit. In addition 89.3% of non-credit users sourced capital through personal savings. This study also revealed that majority (56.0%) of credit-users obtained credit on time. The study furthers show that majority (52%) of credit users requested for a credit amount between ₦250,001 and ₦500,000 per anum but majority (49.3%) only obtained ₦250,000 and below. The probit regression analysis revealed that farm size, educational status, marital status, farming experience and membership of association positively influenced cassava farmers’ access to credit, while age and sex negatively influenced cassava farmers’ access to credit. Farm size, education status, marital status and farm experience also determined the amount of credit obtained by cassava farmers in Osun state. Furthermore, the productivity of cassava farmers is greatly influenced by farm size, years of education, farming experience and amount of credit. The study concluded that majority of credit users experience higher level of productivity when compared to their counterpart (non-users of credit). The following were the recommendations given base of the result of the study. Good and pliable feeder road should be constructed by the State government along the route that leads to farms this will consequently reduce the cost of transportation and increase farmers’ profit, access to credit should be made easy without cumbersome bureaucratic process.