Impact of Credit on Arable Crop Production in Esan West Local Government Area, Edo State.

Abstract

The study examined the impact of credit on arable crop production in Esan West Local Government Area of Edo state .The specific objectives of the study were to examine the socio-economic characteristics of farmers in the study area, determine the volume of credit accessed by them and their default rate, as well as the problems they faced. Primary data were collected from 53 respondents in Esan West LGA using multistage sampling technique. Data were analyzed with descriptive and inferential statistics such as frequency, percentage, mean, budgeting techniques and regression model. Results showed that the respondents were at their energetic and productive age with a mean age of 50 years. The males dominated arable crop production and majority of them were married. They were literate with all the respondents having at least primary school certificate. They maintained small farm size (approximately 2 hectares). Many of the respondents (55.5%) had their credit from formal sources. Output of the farmers and their revenue were low. Respondents were faced with problems such as getting guarantors and collateral (79.6%), interest rate (75.9%), delay in granting loans (74.0%) and inadequate information on credit availability (74.0%). Results of the regression analysis indicated that output of farmers were influenced by the explanatory variables of sex (-1.481), age (-2.740), marital status (2.398), educational qualifications (2.276), farm size (2.353), farming experience (2.680) and credit (4.392). The coefficient of determination (0.503) indicated that 50.30% variation in output of the respondents could be jointly explained by the explanatory variables. It is therefore recommended that credit should be made available to the respondents so that they can increase their farm size, output and revenue.