IDEAS home Printed from https://ideas.repec.org/a/spd/journl/v69y2019i1-2p18-29.html
   My bibliography  Save this article

Agricultural Credit Policy as a Panacea for Sustainable Food Production in Nigeria: Evidence from Ogun State

Author

Listed:
  • Isiaq Olasunkanmi Oseni

    (Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Nigeria.)

  • Akinola Daniel Babalola

    (Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Nigeria.)

  • Bolaji Adesola Adesoye

    (Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Nigeria.)

Abstract

Farmers in Nigeria are credit constrained. Thus, access to credit is a sina qua non for achieving the sustainable development goal of sustainable food production and improving the welfare of the farming folks. This study assessed credit utilization among cassava farmers in Ogun state and its influence on farm profit. Emphasis was placed on the Ogun State Agricultural and Multi-purpose Credit Agency (OSAMCA). The multi-stage sampling technique was used to select 400 farmers for the study. Data collected with the use of questionnaire (388 found useful) were analyzed using descriptive statistics, gross margin and the Logit regression analyses. Inferences were drawn at 5% level of significance. Result showed that OSAMCA credit was the predominant source of credit available to respondents however, only 39% have benefited and up to 47% have not benefitted from any source of credit. Generally, most of the farmers confirmed their need of credit especially for recapitalization or expansion. The t-test result for difference in mean average gross margin per hectare (proxy for profitability) for credit and non-credit beneficiaries showed that access to credit positively and significantly impacted agribusiness enterprise. Lack of collateral (compulsory security savings/ down payment) was reported by 74% of the farmers as the limitation for sourcing for credit. Regression result showed that the coefficients of hired labour, membership of cooperatives, awareness of credit sources, past loan size and ability to meet down payment arrangement were positive and significant thus increase in these variables will increase probability of access to credit (OSAMCA). Furthermore, coefficient of distance to the credit source was negative and significant indicating that proximity of farmers to credit source will enhance access. It is recommended that efforts directed towards enhancing the factors that increases farmers’ access to credit is pertinent.

Suggested Citation

  • Isiaq Olasunkanmi Oseni & Akinola Daniel Babalola & Bolaji Adesola Adesoye, 2019. "Agricultural Credit Policy as a Panacea for Sustainable Food Production in Nigeria: Evidence from Ogun State," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 69(1-2), pages 18-29, January-J.
    • Handle: RePEc:spd:journl:v:69:y:2019:i:1-2:p:18-29
    as

    Download full text from publisher

    File URL: https://spoudai.unipi.gr/index.php/spoudai/article/download/2718/2678/2718-3470-1-SM
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Binswanger, Hans P. & Khandker, Shahidur R. & Rosenzweig, Mark R., 1993. "How infrastructure and financial institutions affect agricultural output and investment in India," Journal of Development Economics, Elsevier, vol. 41(2), pages 337-366, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Khondoker Abdul Mottaleb & Dil Bahadur Rahut, 2019. "Impacts of Improved Infrastructure on Labor Allocation and Livelihoods: The Case of the Jamuna Multipurpose Bridge, Bangladesh," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(4), pages 750-778, September.
    2. Peter Warr, 2005. "Roads and Poverty in Rural Laos," Departmental Working Papers 2005-04, The Australian National University, Arndt-Corden Department of Economics.
    3. Zeeshan & Geetilaxmi Mohapatra & Arun Kumar Giri, 2022. "How Farm Household Spends Their Non-farm Incomes in Rural India? Evidence from Longitudinal Data," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(4), pages 1967-1996, August.
    4. Tasso Adamopoulos, 2011. "Transportation Costs, Agricultural Productivity, And Cross‐Country Income Differences," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 489-521, May.
    5. Andaleeb Rahman & Sumit Mishra, 2020. "Does Non-farm Income Affect Food Security? Evidence from India," Journal of Development Studies, Taylor & Francis Journals, vol. 56(6), pages 1190-1209, June.
    6. Narayanamoorthy, A. & Hanjra, Munir A., 2006. "Rural Infrastructure and Agricultural Output Linkages: A Study of 256 Indian Districts," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 61(3), pages 1-16.
    7. Dinar, Ariel & Keck, Andrew, 1997. "Private irrigation investment in Colombia: effects of violence, macroeconomic policy, and environmental conditions," Agricultural Economics, Blackwell, vol. 16(1), pages 1-15, March.
    8. Ting Xiao & Xin Yu & Liang Ding, 2023. "Can Farmers Punch Their Tickets to Wealth? The Spillover Effect of High-Speed Railway on Agriculture Development," SAGE Open, , vol. 13(4), pages 21582440231, December.
    9. Dominique van de Walle & Martin Ravallion & Vibhuti Mendiratta & Gayatri Koolwal, 2017. "Long-term Gains from Electrification in Rural India," The World Bank Economic Review, World Bank, vol. 31(2), pages 385-411.
    10. Clive Bell & Susanne van Dillen, 2014. "How Does India’s Rural Roads Program Affect the Grassroots? Findings from a Survey in Upland Orissa," Land Economics, University of Wisconsin Press, vol. 90(2), pages 372-394.
    11. Bernard Hoekman & Carlos Braga, 1997. "Protection and Trade in Services: A Survey," Open Economies Review, Springer, vol. 8(3), pages 285-308, July.
    12. Manfred Wiebelt & Rainer Schweickert & Clemens Breisinger & Marcus Böhme, 2011. "Oil revenues for public investment in Africa: targeting urban or rural areas?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 745-770, November.
    13. Tharakan, Joe & Lefèvre, Mélanie, 2011. "Intermediaries, transport costs and interlinked transactions," CEPR Discussion Papers 8615, C.E.P.R. Discussion Papers.
    14. Kasuga, Hidefumi & Morita, Yuichi, 2012. "Aid effectiveness, governance and public investment," Economic Modelling, Elsevier, vol. 29(2), pages 514-521.
    15. Dayakar Peddi & B. Suresh Reddy, 2023. "Analysis of Irrigation Enhancement, Crop Diversification and Farm Profits: Evidence from Telangana State," Review of Development and Change, , vol. 28(2), pages 189-206, December.
    16. Bruno AMABLE & Jean-Bernard CHATELAIN, 1999. "Infrastructures financières et croissance économique," Discussion Papers (REL - Recherches Economiques de Louvain) 1999041, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    17. Bambio, Yiriyibin & Bouayad Agha, Salima, 2018. "Land tenure security and investment: Does strength of land right really matter in rural Burkina Faso?," World Development, Elsevier, vol. 111(C), pages 130-147.
    18. Asian Development Bank Institute, 2017. "Myanmar Transport Sector Policy Note: Rural Roads and Access," Working Papers id:11782, eSocialSciences.
    19. Utpal Kumar De & Dahun S Dkhar, 2018. "Public Expenditure and Agricultural Production in Meghalaya, India- An Application of Bounds Testing Approach to Co-Integration and Error Correction Model," International Journal of Environmental Sciences & Natural Resources, Juniper Publishers Inc., vol. 8(2), pages 71-78, January.
    20. Tariq Ahmad & Ghulam-Muhammad Shah & Farid Ahmad & Uma Partap & Sajjad Ahmad, 2017. "Impact of Apiculture on the Household Income of Rural Poor in Mountains of Chitral District in Pakistan," Journal of Social Sciences (COES&RJ-JSS), , vol. 6(3), pages 518-531, July.

    More about this item

    Keywords

    Credit policy; farmers; cassava enterprise; Ogun state;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • N27 - Economic History - - Financial Markets and Institutions - - - Africa; Oceania
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spd:journl:v:69:y:2019:i:1-2:p:18-29. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SPOUDAI Journal of Economics and Business (email available below). General contact details of provider: https://edirc.repec.org/data/depirgr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.