ABSTRACT
Supporting
smallholder farmers to play a greater role in food production and natural
resource stewardship has been identified as one of the quickest ways to lift
Nigerians out of poverty. Funding has been seen as a major problem militating
against achieving this goal. It is argued that adequate credit facility could
play an important role in enhancing agricultural productivity through the
acquisition of latest technology, employment of skill manpower, promotion of
agricultural research and commercial farming. In an attempt to mitigate the
funding problem of the agricultural sector, the Federal Government of Nigeria
has instituted several agricultural financing schemes. One of such schemes is
the Agricultural Credit Guarantee Scheme Fund (ACGSF) which was established by
the federal government in 1977 with the aim of enhancing commercial banks’
loans to the agricultural sector in Nigeria with focus on agro-allied and
agricultural production in order to mitigate the risk associated with lending
to the sector. The scheme is expected to stimulate agricultural production for
both domestic consumption and export purposes but not much has been researched
in this regard. This study strives to fill this important knowledge gap by
examining the impact of Agricultural Credit Guarantee Scheme Fund (ACGSF) on
total agricultural productivity in Nigeria, as well as on the four major
subsectors (crop, livestock, forestry and fishery) of the agricultural sector
in Nigeria.
The ex-post
facto research design was adopted for
the study and annualized data for a 34-year period, 1978-2011, were obtained
from the Central Bank of Nigeria Statistical Bulletin. The multiple regression
technique was used to estimate the five hypotheses formulated for the study.
Aggregate agricultural production, crop, livestock, forestry and fishery
productions were adopted as the dependent variables, while the independent
variable was Agricultural Credit Guarantee Scheme Fund including some other
relevant variables. The study also controlled for government expenditure in
agriculture, foreign exchange rate and inflation rate. Results indicate that
the Agricultural Credit Guarantee Scheme Fund (ACGSF) has a non-significant
positive effect on aggregate agricultural output but significant positive
impact on both crop and fishery subsector outputs. Nevertheless, the effects of
the scheme on livestock output was non-significant and negative, while that of
the forestry output was non-significant and positive. Thus, it is evident that
the ACGSF plays a fundamental role in stimulating agricultural production in
Nigeria. As a strategy to realize the optimal potential of farmers in enhancing
agricultural performance, it is recommended that the Nigerian government
continues the use of the credit finance from the ACGSF as an inducement to
encourage farmers to put in their best efforts in agricultural production. The
study has contributed to knowledge by using modified versions of earlier works
to produce relevant results.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Agriculture
represents one of the most important sectors of the Nigerian economy. It is
particularly important with regards to its employment generation and
contribution to gross domestic product (GDP) and export revenue earnings.
Regardless of its rich agricultural resource endowment, however, the
agricultural sector in Nigeria has recorded very low growth rate. Less than 50%
of the country’s cultivable agricultural land is under cultivation. In addition
to this, smallholder and traditional farmers who use undeveloped production
techniques, with resultant low yields, cultivate most of this land (Manyong, et.
al., 2005). The smallholder farmers are limited by various constraints
among which access to credit according to Olomola (1990) is a major militating
factor, against agricultural production and development in Nigeria. Problems
associated with obtaining credit have been corroborated by different authors
(Nto and Mbanasor, 2008; Olaitan, 2005; Okorie, 1998; Henri-Ukoha, et. al.,
2011).
Credit
delivery to the agricultural sector has been recognized as a major input in the
growth of the sector in Nigeria. The decline in the contribution of the sector
to the Nigerian economy has been blamed on the lack of a formal national credit
policy and paucity of credit institutions, which can be beneficial to farmers
and small and new business operators engaged in agriculture and agro-allied
businesses (Rahji, et. al., 2010).
In
Nigeria, credit has been recognized as an essential tool for promoting Small
and Medium Enterprises (SMEs). About 70 percent of the population is engaged in
the informal sector or in agricultural production. The federal and state
governments in Nigeria have recognized that for sustainable growth and
development, the financial empowerment of the rural areas is vital, being the
repository of the predominantly poor in the society and particularly the small
and medium enterprises (SMEs). If this growth strategy is adopted and the
latent entrepreneurial capabilities of this large segment of the people is
sufficiently stimulated and sustained then positive multipliers will be felt
throughout the economy (Olaitan, 2006; Olowu, 2011).
The
Federal Government of Nigeria has severally instituted various agricultural
financing policies through schemes, programmes and institutions, aimed at
improving agricultural....
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Item Type: Postgraduate Material | Attribute: 125 pages | Chapters: 1-5
Format: MS Word | Price: N3,000 | Delivery: Within 30Mins.
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