Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria

Wole-Alo Felicia Itunnu; Akinwalere Bosede Olufunmilayo; Alo Oluwole Joseph

doi:doi:10.11648/j.ijaas.20220804.13

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Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria

Wole-Alo Felicia Itunnu, Akinwalere Bosede Olufunmilayo, Alo Oluwole Joseph

Published in International Journal of Applied Agricultural Sciences (Volume 8, Issue 4)

Received: 9 May 2022 Accepted: 1 June 2022 Published: 28 July 2022

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Abstract

Dwindling farmers’ productivity as a result of lack of adequate capital to increase yield necessitates this study. This study examines the impact of credit on the farm incomes of cocoa growers in Ondo State, Nigeria. Data were collected, with the use of well-structured questionnaire, from 160 cocoa growers, who were categorized into beneficiaries and non-beneficiaries of credit, through multi-stage sampling technique. Descriptive statistics, Gross margin analysis and multiple regression analysis were employed in analyzing data for this study. The results reveal that the total cost of credit beneficiaries cocoa growers is higher (N18,734,764.00) than that of non-credit beneficiaries cocoa growers (N15,656,637.50). Also, the Net farm income of credit beneficiaries is greater (N10,334,510.40) than that of non-credit beneficiaries (N6,690,188.50), suggesting that, access to credit could lead to improved farmers' productivity and higher income in form of revenue and profit. Regression analysis showed that years of formal education, farming experience, farm size and credit availability, all being positive and significant at 0.05 probability level, affect cocoa grower's output. R² value suggested that variation in output by the two categories of farmers is explained by 75 percent of explanatory variables in their production functions. It is thus concluded that credit could bring about higher productivity and profit in agricultural production, hence, this study recommends that existing formal and informal institutions should be encouraged to have more rural outlets, while there should be federal government policy of empowering rural farmers to have access to more credits.

Published in	International Journal of Applied Agricultural Sciences (Volume 8, Issue 4)
DOI	10.11648/j.ijaas.20220804.13
Page(s)	156-161
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Credit, Income, Cocoa Growers, Ondo State, Nigeria

References

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[2]	Adeola R. G. and O. Adebayo (2008): “Sources and uses of agricultural credit by small scale Farmers in Surulere Local Government Area of Oyo State.” Department of Agricultural Economics, Ladoke Akntola University of Technology, Ogbomoso. Anthropologist, 10 (4): 313-314 (2008).
[3]	Adewuyi, S. A., Ashaolu, O. F., Ayinde, LA. And Ogundele, S. O., (2006). Determinants of farm mechanization among arable crop farmers in Ibarapa Zone, Oyo State, Nigeria. Moor Journal of Agricultural Research, 7 (1): 49-55.
[4]	Anyanwu, C. M. (2004): “Microfinance institutions in Nigeria: Policy, practice, and potentials”. Paper presented at the G24 Workshop on “Constraints to Growth in Sub Saharan Africa,” Pretoria, South Africa, November 29-30, 2004.
[5]	CBN (2005): Microfinance policy, regulatory and supervisory framework for Nigeria. Central Bank of Nigeria http:\\www.cenbank.org/out/publications/guidelines/dfd/2005/Microfinance%20policy.pdf
[6]	Duong, P. B. and Y. Izumida (2002): “Rural development finance in Vietnam, a micro econometric analysis of household surveys”. World Development, vol. 30 (2); 319-335.
[7]	Feijo, R. L. C. (2001): The impact of a family farming credit program on the rural economy of Brazil. http://www.anpec.org.br/encontro2001/artigos/200105 070.pdf Accessed on August 3, 2010.
[8]	Lawal, J. O. and B. T. Omonona (2009): “Factors affecting Credit Access among Cocoa Farming Households in Cocoa Producing Zones of Osun State, Nigeria”. In Proceeding of 43rd Agricultural Society of Nigeria Conference, Abuja, Nigeria. Pg 512-515.
[9]	Ogunjiuba, K. K. and A. O. Adenuga (2004): “Credit Availability to small and Medium Scale Enterprises in Nigeria.” Journal of Development Economics, 33, pp 67-87.
[10]	Ojo, M. O. (1998): “Agricultural credit policiesin Nigeria, a review of achievements, problems and prospects.” Reading in Agricultural Finance. Longman Nigeria Plc, Lagos Nigeria. Pp 25-37.
[11]	Oke, J. T. U., R. Adeyemo, and M. U. Agbonlahor. (2007): “An empirical analysis of microcredit repayment in southwestern Nigeria”. Humanity & Social Sciences Journal 2 (1): 63-74.
[12]	Okojie, C., A. Monye-Emina, K. Eghafona, G. Osaghae, and J. O. Ehiakhamen. (2010): “Institutional environment and access to microfinance by self-employed women in the rural areas of Edo State”. NSSP Brief No. 14. Washington. D.C.: International Food Policy Research Institute.
[13]	Olaitan, M. A. (2006): “Finance for small and medium enterprises; Nigeria Agricultural Credit Guarantee Scheme Fund”. Journal of Farm Management. Vol 3, No 2.
[14]	Osuntogun, C. A. (1997): “The Impact of Specialized Small Holder Credit Programmes on Farmers Beneficiaries. A case study of First Bank of Nigeria." African Review of Money Finance and Banking; 1: 35-36.
[15]	Oyeyinka, R. A. and K. K. Bolarinwa. (2009): “Using Nigeria Agricultural Cooperative and Rural Development Bank Small Holder Direct Loan Scheme to increase agricultural production in rural Oyo State, Nigeria”. International Journal of Agricultural Economics and Rural Development 2 (1).
[16]	Rahji, M. A. Y. (2009): “An analysis of the Determinants of Agricultural Credit Approval/Loan size by Commercial Banks in Southwestern Nigeria”. J. Nigeria Development. Studies, 1: 6-25.
[17]	Swinnen, J. F. M. and Gow, H. R. (1999): “Agricultural Credit Problems and Policies during the Transition to a Market Economy in Central and Eastern Europe” Food policy, 24 (1999): 21-47.
[18]	Zeller, M., Sharma, M., Ahmed, AU. And Rashid, S., 2001. Group-basedFinancial Institutions for theRural Poor in Bangladeshi: AnInstitutional-and Household-Level Analysis. Research Report 120, IFPRI, Washington, D.C.

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APA Style

Wole-Alo Felicia Itunnu, Akinwalere Bosede Olufunmilayo, Alo Oluwole Joseph. (2022). Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria. International Journal of Applied Agricultural Sciences, 8(4), 156-161. https://doi.org/10.11648/j.ijaas.20220804.13

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ACS Style

Wole-Alo Felicia Itunnu; Akinwalere Bosede Olufunmilayo; Alo Oluwole Joseph. Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria. Int. J. Appl. Agric. Sci. 2022, 8(4), 156-161. doi: 10.11648/j.ijaas.20220804.13

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AMA Style

Wole-Alo Felicia Itunnu, Akinwalere Bosede Olufunmilayo, Alo Oluwole Joseph. Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria. Int J Appl Agric Sci. 2022;8(4):156-161. doi: 10.11648/j.ijaas.20220804.13

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@article{10.11648/j.ijaas.20220804.13,
  author = {Wole-Alo Felicia Itunnu and Akinwalere Bosede Olufunmilayo and Alo Oluwole Joseph},
  title = {Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria},
  journal = {International Journal of Applied Agricultural Sciences},
  volume = {8},
  number = {4},
  pages = {156-161},
  doi = {10.11648/j.ijaas.20220804.13},
  url = {https://doi.org/10.11648/j.ijaas.20220804.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijaas.20220804.13},
  abstract = {Dwindling farmers’ productivity as a result of lack of adequate capital to increase yield necessitates this study. This study examines the impact of credit on the farm incomes of cocoa growers in Ondo State, Nigeria. Data were collected, with the use of well-structured questionnaire, from 160 cocoa growers, who were categorized into beneficiaries and non-beneficiaries of credit, through multi-stage sampling technique. Descriptive statistics, Gross margin analysis and multiple regression analysis were employed in analyzing data for this study. The results reveal that the total cost of credit beneficiaries cocoa growers is higher (N18,734,764.00) than that of non-credit beneficiaries cocoa growers (N15,656,637.50). Also, the Net farm income of credit beneficiaries is greater (N10,334,510.40) than that of non-credit beneficiaries (N6,690,188.50), suggesting that, access to credit could lead to improved farmers' productivity and higher income in form of revenue and profit. Regression analysis showed that years of formal education, farming experience, farm size and credit availability, all being positive and significant at 0.05 probability level, affect cocoa grower's output. R2 value suggested that variation in output by the two categories of farmers is explained by 75 percent of explanatory variables in their production functions. It is thus concluded that credit could bring about higher productivity and profit in agricultural production, hence, this study recommends that existing formal and informal institutions should be encouraged to have more rural outlets, while there should be federal government policy of empowering rural farmers to have access to more credits.},
 year = {2022}
}

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TY  - JOUR
T1  - Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria
AU  - Wole-Alo Felicia Itunnu
AU  - Akinwalere Bosede Olufunmilayo
AU  - Alo Oluwole Joseph
Y1  - 2022/07/28
PY  - 2022
N1  - https://doi.org/10.11648/j.ijaas.20220804.13
DO  - 10.11648/j.ijaas.20220804.13
T2  - International Journal of Applied Agricultural Sciences
JF  - International Journal of Applied Agricultural Sciences
JO  - International Journal of Applied Agricultural Sciences
SP  - 156
EP  - 161
PB  - Science Publishing Group
SN  - 2469-7885
UR  - https://doi.org/10.11648/j.ijaas.20220804.13
AB  - Dwindling farmers’ productivity as a result of lack of adequate capital to increase yield necessitates this study. This study examines the impact of credit on the farm incomes of cocoa growers in Ondo State, Nigeria. Data were collected, with the use of well-structured questionnaire, from 160 cocoa growers, who were categorized into beneficiaries and non-beneficiaries of credit, through multi-stage sampling technique. Descriptive statistics, Gross margin analysis and multiple regression analysis were employed in analyzing data for this study. The results reveal that the total cost of credit beneficiaries cocoa growers is higher (N18,734,764.00) than that of non-credit beneficiaries cocoa growers (N15,656,637.50). Also, the Net farm income of credit beneficiaries is greater (N10,334,510.40) than that of non-credit beneficiaries (N6,690,188.50), suggesting that, access to credit could lead to improved farmers' productivity and higher income in form of revenue and profit. Regression analysis showed that years of formal education, farming experience, farm size and credit availability, all being positive and significant at 0.05 probability level, affect cocoa grower's output. R2 value suggested that variation in output by the two categories of farmers is explained by 75 percent of explanatory variables in their production functions. It is thus concluded that credit could bring about higher productivity and profit in agricultural production, hence, this study recommends that existing formal and informal institutions should be encouraged to have more rural outlets, while there should be federal government policy of empowering rural farmers to have access to more credits.
VL  - 8
IS  - 4
ER  -

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Author Information

Wole-Alo Felicia Itunnu

Department of Agricultural Extension and Communication Technology, Federal University of Technology, Akure, Nigeria
Akinwalere Bosede Olufunmilayo

Department of Agricultural Extension and Communication Technology, Federal University of Technology, Akure, Nigeria
Alo Oluwole Joseph

Department of Agricultural and Resource Economics, Federal University of Technology, Akure, Nigeria

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APA Style

Wole-Alo Felicia Itunnu, Akinwalere Bosede Olufunmilayo, Alo Oluwole Joseph. (2022). Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria. International Journal of Applied Agricultural Sciences, 8(4), 156-161. https://doi.org/10.11648/j.ijaas.20220804.13

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ACS Style

Wole-Alo Felicia Itunnu; Akinwalere Bosede Olufunmilayo; Alo Oluwole Joseph. Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria. Int. J. Appl. Agric. Sci. 2022, 8(4), 156-161. doi: 10.11648/j.ijaas.20220804.13

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AMA Style

Wole-Alo Felicia Itunnu, Akinwalere Bosede Olufunmilayo, Alo Oluwole Joseph. Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria. Int J Appl Agric Sci. 2022;8(4):156-161. doi: 10.11648/j.ijaas.20220804.13

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@article{10.11648/j.ijaas.20220804.13,
  author = {Wole-Alo Felicia Itunnu and Akinwalere Bosede Olufunmilayo and Alo Oluwole Joseph},
  title = {Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria},
  journal = {International Journal of Applied Agricultural Sciences},
  volume = {8},
  number = {4},
  pages = {156-161},
  doi = {10.11648/j.ijaas.20220804.13},
  url = {https://doi.org/10.11648/j.ijaas.20220804.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijaas.20220804.13},
  abstract = {Dwindling farmers’ productivity as a result of lack of adequate capital to increase yield necessitates this study. This study examines the impact of credit on the farm incomes of cocoa growers in Ondo State, Nigeria. Data were collected, with the use of well-structured questionnaire, from 160 cocoa growers, who were categorized into beneficiaries and non-beneficiaries of credit, through multi-stage sampling technique. Descriptive statistics, Gross margin analysis and multiple regression analysis were employed in analyzing data for this study. The results reveal that the total cost of credit beneficiaries cocoa growers is higher (N18,734,764.00) than that of non-credit beneficiaries cocoa growers (N15,656,637.50). Also, the Net farm income of credit beneficiaries is greater (N10,334,510.40) than that of non-credit beneficiaries (N6,690,188.50), suggesting that, access to credit could lead to improved farmers' productivity and higher income in form of revenue and profit. Regression analysis showed that years of formal education, farming experience, farm size and credit availability, all being positive and significant at 0.05 probability level, affect cocoa grower's output. R2 value suggested that variation in output by the two categories of farmers is explained by 75 percent of explanatory variables in their production functions. It is thus concluded that credit could bring about higher productivity and profit in agricultural production, hence, this study recommends that existing formal and informal institutions should be encouraged to have more rural outlets, while there should be federal government policy of empowering rural farmers to have access to more credits.},
 year = {2022}
}

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TY  - JOUR
T1  - Impact of Credit on Farm Incomes of Cocoa Growers in Ondo State, Nigeria
AU  - Wole-Alo Felicia Itunnu
AU  - Akinwalere Bosede Olufunmilayo
AU  - Alo Oluwole Joseph
Y1  - 2022/07/28
PY  - 2022
N1  - https://doi.org/10.11648/j.ijaas.20220804.13
DO  - 10.11648/j.ijaas.20220804.13
T2  - International Journal of Applied Agricultural Sciences
JF  - International Journal of Applied Agricultural Sciences
JO  - International Journal of Applied Agricultural Sciences
SP  - 156
EP  - 161
PB  - Science Publishing Group
SN  - 2469-7885
UR  - https://doi.org/10.11648/j.ijaas.20220804.13
AB  - Dwindling farmers’ productivity as a result of lack of adequate capital to increase yield necessitates this study. This study examines the impact of credit on the farm incomes of cocoa growers in Ondo State, Nigeria. Data were collected, with the use of well-structured questionnaire, from 160 cocoa growers, who were categorized into beneficiaries and non-beneficiaries of credit, through multi-stage sampling technique. Descriptive statistics, Gross margin analysis and multiple regression analysis were employed in analyzing data for this study. The results reveal that the total cost of credit beneficiaries cocoa growers is higher (N18,734,764.00) than that of non-credit beneficiaries cocoa growers (N15,656,637.50). Also, the Net farm income of credit beneficiaries is greater (N10,334,510.40) than that of non-credit beneficiaries (N6,690,188.50), suggesting that, access to credit could lead to improved farmers' productivity and higher income in form of revenue and profit. Regression analysis showed that years of formal education, farming experience, farm size and credit availability, all being positive and significant at 0.05 probability level, affect cocoa grower's output. R2 value suggested that variation in output by the two categories of farmers is explained by 75 percent of explanatory variables in their production functions. It is thus concluded that credit could bring about higher productivity and profit in agricultural production, hence, this study recommends that existing formal and informal institutions should be encouraged to have more rural outlets, while there should be federal government policy of empowering rural farmers to have access to more credits.
VL  - 8
IS  - 4
ER  -

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