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AGRICULTURAL CREDIT POLICY AS A PANACEA FOR SUSTAINABLE FOOD PRODUCTION IN NIGERIA: EVIDENCE FROM OGUN STATE
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.
Keywords: Credit policy, farmers, cassava enterprise, Ogun state