ABSTRACT
The Agricultural sector in Nigeria has remained one
of the largest contributors to the gross domestic product of the nation’s
economy contributing an average of 39% of GDP. Since the beginning of the
millennium, over 80% of the country’s population living in
the rural areas is directly or indirectly dependent on agriculture for
livelihood. “NBS 2005” Livestock sector plays
a crucial role in rural economy and livelihood, and access to credit has both
direct and indirect effects on farm production. This has examined the factors
affecting farmers’ participation in credit market and howsocio-economic
dimensions of poultry farmers their suitability to access credit. Variables for
this study included household, collateral, level of education, years of
experience and farm size against credit supply.
Descriptive
and inferential methods were used to analyse the data collected from one
hundred (100) poultry farmers within Odeda Local government of Ogun state Nigeria.
Instrument use for data collection was poultry farmers’ access to credit
questionnaire (PFACQ).
The
result shows that Household size and collateral have a significant impact on
access to credit from formal and informal financial institution (t-statistics ≥
1.64 in absolute value terms) while level of education; years of experience and
farm size are not statistically significant on credit supply since t-statistics
≤ 1.64.
The
study concluded that credit supply was not dependent on the years of
experience, level of education or farm size of poultry farmers but to a certain
level, dependent on the Household and the collateral of these farmers.
Therefore it is recommended that the government should make loans available to
poultry farmers in Nigeria irrespective of their exposure in knowledge, in the
business or the available facilities for the poultry farming.
CHAPTER ONE
INTRODUCTION1.1 Background to the Study
The Agricultural sector in Nigeria has remained one of the
largest contributors to the Gross Domestic Product of the nation’s economy. For
the past two decades it has contributed an average of 39% of the country’s GDP.
Over 80% of the country’s population living in the rural areas is
directly or indirectly dependent on agriculture for its livelihood (NBS, 2005). Livestock sector plays a crucial role in rural
economy and livelihood. This is one sector where the poor contributes to the
growth directly instead of getting benefit from growth generated elsewhere. In
Nigeria, the livestock sector forms an important livelihood activity for most
of the farmers, supporting agriculture in the form of critical inputs,
contributing to the health and nutrition of the household, supplementing
incomes, offering employment opportunities, and serving as a store of wealth in
times of need. It acts as a supplementary and complimentary enterprise.
Livestock is also important as a part of agriculture diversification and income
enhancement. Livestock plays a vital role in the overall economic development
of the farm households and nation as a whole.
The prolificacy of livestock which include; goat, pig and
poultry are the influencing factors for rearing them. The returns are quick;
losses, if any, are recovered soon and the poor can afford them. The multiple
species-animal husbandry system is also environmental friendly. Income from
livestock production contributes a significant percentage of the total income
of rural farm households engaged in agricultural production (Johnson, Perry and
Morehart. (1995). Among livestock –
based vocations, poultry occupies a pivotal position because of its enormous
potential to bring about rapid economic growth. The importance of the poultry
sub-sector is chiefly in the provision of meat and egg as well as the provision
of employment either directly or indirectly and the contribution to the revenue
(Gross Domestic Product) of the country. The poultry sub-sector of the economy
in Nigeria remains chiefly primitive. This is because government, at all
levels, has neglected it for a long time. The poultry industry in Nigeria has
the highest number of poultry farm in Africa.
Currently, Nigeria has about 10% of the population, and is responsible
for less than 15 to 18% employment opportunities, due to the fact that the
industry is mainly subsistent.( Afolami (2011), in comparison with other
livestock products (e.g. beef, mutton, pork), poultry is considered to be more
palatable, having lower level of cholesterol and high protein value (Adegbola,
2000) Egg, a product of the industry, gives about 3.5 g of the total 7.2 g
animal protein requires for individual dietary need per day. For developing
countries, poultry contributes just about 15% of total animal protein intake,
with approximately 1.3 kg of poultry products consumed per head per annum
(NLDC, 2000).
The World Health Organization (WHO) and Food and Agriculture
Organization (FAO) recommended 3.6 kg per capita intake of poultry products per
annum. Therefore to meet the basic minimum of the dietary needs of Nigerians,
the country requires an annual production of 10 to 20 billion eggs and 0.3 to
0.6 million tone of poultry meat (NLDC, 2000).
In Nigeria, production of food has not increased at the rate that can
meet the increasing population. While food production increases at the 2.5%,
food demand increases at 3.5% due to high rate of population growth of 2.83%
(CBN, 2004). The apparent disparity between the rate of food production and
demand for food in Nigeria has led to increasing resort to food importation and
high rates of increase in food prices. The demand and supply gap for animal
protein intake is so high.
The Food and Agricultural Organization recommends that the
minimum intake of protein by an average person should be 65gm per day; of this,
36gm (i.e. 40%) should come from animal sources. Nigeria is presently unable to
meet this requirement. The animal protein consumption in Nigeria is less than
8gm per person per day, which is a far - fetched from the Food and Agricultural
Organization minimum recommendation (Niang & Jubrin, 2001). Poultry food plays
a useful role in bridging the protein gap in Nigeria. It is palatable and
generally acceptable. This acceptability cuts across nearly all cultural and
religious boundaries in the country. The importance of poultry to the national
economy cannot be overemphasized, as it has become popular industry for the
small holders that have great contribution to the economy of the country. The
enterprise has assumed greater importance in improving the employment
opportunity and animal protein production in Nigeria. To this end, an
up-to-date knowledge of the profitability and efficiency of resource
utilization in the industry will go a long way in bridging some knowledge gap
and help in formulating policies aimed at ensuring increased and more
profitable poultry production in the country.
The
provision of credit has increasingly been regarded as an important tool for
raising the incomes of rural population, mainly by mobilizing resources to more
productive uses (Atieno, 2001). Access to sufficient credit is certainly a
requisite to viable production outfits, especially as the industries are some
of the way out of industrial backwardness, unemployment and mass poverty.
Inadequate
credit affects the purchasing power of producers to procure farm implement, and
make farm related investments, which they can fall back on to help augment
incomes and alleviate poverty. Inadequate access to credit indirectly affects
the risk behaviour of producers (Eswaran & Kotwal, 1990; Guirkinger & Boucher,
2005). It usually compels poultry farmers to invest in less risky and less
productive technologies rather than in the more risky but productive ones
(Dercon, 1996). Risk behaviour has negative effects on technical efficiency of
the poultry farmers in that it limits the effort of the poultry farmers in
attaining maximum possible output and, hence, efficiency is compromised. It is possible that some of
the famers in Odeda Local government areas operate below their full capacities.
A lot of poultry farms are likely to have folded up as a result of this
inadequate access to credit. It is possible that socio – economic dimension has
influence on access to credit. This perceived problem of access to credit by
poultry farmers in Odeda Local Government, area of Ogun State moved the
curiosity of the researcher to investigate socio-economic dimension of the
poultry farmer in relation to access to credit.
The main objective of the study is to
determine how socio-economic factors affect credit supply to poultry farmers in
Odeda local government of Ogun state. The specific objectives are
to:
1
show how level of education
affect credit supply to poultry farmers;
2
determine how years of
experience influence credit supply to the poultry farmers;
3
analyse the relationship
between household size and credit supply of the poultry farmers;
4
establish how farm size affect
the supply of credit to poultry farmers and
5
show the extent of the
relationship between collateral security and credit supply to poultry farmers
1.
How does level of education
affect credit supply to the poultry farmers?
2.
How do years of experience
influence the supply of credit to the poultry farmers?
3.
What is the relationship
between the household size and suitability of the poultry farmers to access
credit?
4.
How does the size of farm
affect the supply of credit to poultry farmers?
5.
To what extent does collateral
security affect credit supply to the poultry
farmers?
The null hypothesis is at level 10% significant
Ho1: Level of education has no
significant effect on credit supply
Ho2: Credit supply is not
significantly affected by years of experience
Ho3: There is no significant relationship between household size and
suitability of poultry farmers to access credit
Ho4: There is no significant relationship between size of farm and
credit supply to poultry farmers
Ho5: Collaterals do not have significant relationship with credit
supply to poultry farmers
The findings of the study expose some factors that might be
responsible for poor production of poultry farming. The identified areas where
government at different levels could come in to assist poultry farmers would be
brought into focus in order to bridge the gap. This study might be of
significant use to stakeholders such as farmers, investors, local government,
policy makers, and nation at large.
To the Farmers, this study would be relevant to farmers who want
to go into poultry business because it could provide the detailed information
on economic importance of poultry farming. To the investors, the study would
also throw more light on the performance and profitability of poultry business
for investors that are interested in poultry business and for expansion of
already existing ones. To local government, its gives education concerning farm
size and population of farmers in the entire local government so as to attract
credit facilities either from government or private individuals. To policy
makers, the intricate of credits constraints and supply of credit by financial
institutions would be reviled as this would be used to policy makers and
national development planners to know where emphasis and logistic supports are
needed. To the nation at large, government needs the information in order to
know how to allocate budget for agricultural production in rural development.
This
study was designed to examine socio-economic factors that determine access to
credits by poultry farmers in Odeda Local Government. It is expected to be used
for further investigation on, either the efficiency or access to credit in
poultry farms in Ogun State, Nigeria. The report emanating from the study is
based on statistical data, reports, and literature information. This
study has covered one hundred (100) poultry farms in Odeda Local Government
Area of Abeokuta, Ogun State.
The
study is significant as it aimed at investigating socio-economic dimension of
the poultry farmers in relation to access to credit and providing suggestions
on how the identified problems can be solved.
1.9 Operational Definition of Terms
Socio-economic
Factors: These are factors that may affect
the supply of credit to the poultry farmers.
Level of
Education (LOE): The height of formal
educational attainment of the poultry farmers.
Years of
Experience (YOE): The period of time (in years)
a poultry farmer has been in the poultry farming.
Size of Farm (SOF):
This is the size of poultry farm measured in terms of number of eggs and
chickens.
Household
Size (HHS): The number of dependence of the
poultry farmer from within and extended family.
Collateral: This is the assets that qualify the farmer for loan credit,
and guarantee repayment default.
Credit
Supply: Is the availability of facilities
for future repayment with interest.
Financial
Inclusion: This is the delivery of financial
services to disadvantage and low-income segments of poultry farmers in the
society.
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Item Type: Postgraduate Material | Attribute: 72 pages | Chapters: 1-5
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