ABSTRACT
The
study examined the impact of Commercial Agriculture credit scheme on the
performance of beneficiaries in Anambra State, Nigeria. Simple random sampling
technique was applied in selection of respondents for the study. The sample was
drawn from members of All Farmers Association of Nigeria (AFAN). AFAN has a
total of 548 members, out of this member 200 of them have so far benefited from
the scheme while 348 are yet to benefit. Thus from 200 beneficiaries, 150 were
randomly selected. 150 farmers were also selected from those that have not
benefited and this gave a total of 300 farmers for the study. The data were
analyzed using descriptive statistics, propensity score matching and probit
model. Results of the data analysis showed that the average age of farmers was
47 years, majority (67.2%) were male while 32.8% were females. Majority (66.8%)
of the farmers were married. The farmers spent 11 years in school on the
average. Average household size was 5 persons while 10 years was their average
farming experience. The farmers have average farm size of 525.03 ha. 99.2% of
them own bank account and majority of them agreed they needed credit in their
farming business. The result further showed that personal saving and
cooperatives were their major source of credit. The mean capital base of the
farmers was N 1,500,000. 66% of the farmers that accessed the loan
engaged in crop production while 30% and 4% of the farmers that accessed the
loan engaged in livestock and agro-marketing respectively. The t-cal (2.19) was
greater than the t-tab (1.96). This result implies that the Commercial
Agriculture Credit Scheme (CACS) has had a significant positive impact on the
output of the beneficiaries. For the regression result, increase in the profit
of the farmers after accessing the CACS, amount received from CACS, capital
base of the farmers , farm size of their farms, years of experience, education
level of the farmers and output of the farmers increased farmers ability to
repay the loan borrowed. The result of the analysis further shows that the
farmers accepted the lack of awareness and access to the scheme due to delays
as well as stringent measures by participating banks, collateral requirements
and farmers education levels were the major problems encountered by the farmers
but agreed weakly to lack of awareness as a problem encountered by farmers in
accessing the scheme.
CHAPTER ONE
INTRODUCTION
1.1 Background Information
Agriculture contributes immensely to the Nigerian economy in many ways,
namely; in the provision of food for the increasing population, supply of
adequate raw materials to growing industries, a major source of employment
generation, foreign exchange earning; and provision of market for the products
of industrial sector (FAO, 2006). Over the years, the inability of this sector
to expand and as well contribute meaningfully to the growth of the Nigerian
economy may be due to inadequate financing. Also the problem of rapid
agricultural development in Nigeria indicates that efforts directed at
achieving expanded economic base for farmers were frustrated by scarcity of and
restrictive access to loanable fund (Nwankwor, 2013). One of the reasons for
the decline in the contribution of agriculture to the economy is formal
national credit policy that can assist farmers (CBN, 2010).
Agriculture,
as a sector, depends more on credit than any other sector of the economy
because of the seasonal variations in the farmer`s returns and a changing trend
from subsistence to commercial farming (Mahmood, Khalid & kouser, 2009).
This is in view of the fact that credit plays an important role in enhancing
agricultural productivity, especially in developing countries (Iqbal, Munir
& Abbas, 2003). The unpredictable and risky nature of agricultural
production, the importance of agriculture to the national economy, the urge to
provide additional incentives to further enhance the demand by lending
institutions for appropriate risk aversion measures in agricultural lending
provide justification for the establishment of the Commercial Agriculture
Credit Scheme.
Consequently
provision of appropriate financial policies and enabling institutional finance
for commercial agriculture is capable of facilitating agricultural development
with a view to
Therefore
in order to promote Commercial Agriculture in Nigeria, the Federal Ministry of
Agriculture and Natural Resource, in collaboration with the Central Bank of
Nigeria (CBN) introduced the Commercial Agricultural Credit Scheme (CACS) in
2009. The main aim of the fund is to complement other special initiatives of
the Central Bank of Nigeria in providing concessionary funding for agriculture
such as the Agricultural Credit Guarantee Scheme (ACGS) which is mostly for
small scale farmers, Interest Draw Back Scheme, Agricultural Credit Support
Scheme, etc.
The objectives of the scheme are:
a.
To fast
track development of the agricultural sector of the Nigerian economy by
providing credit facilities to commercial agricultural enterprises at a single
digit interest rate.
b.
To enhance
national food security by increasing food supply and effecting lower
agricultural produce and product prices, thereby promoting low food inflation
and to reduce.....
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Item Type: Postgraduate Material | Attribute: 76 pages | Chapters: 1-5
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