Economic Evaluation of Credit Requirements of Small-Scale Farmers in Kogi State, Nigeria

ABSTRACT

This study was designed to evaluate the Credit requirements of

small-scale farmers in Kogi State and to subsequently determine the

optimum farm credit for farmers in the area. Multi-stage random sampling

method was used in the selection of the respondents. In all, a total of 30

respondents were randomly selected from eight communities to give a total

of 240 respondents. The regression results on the effects of Socio-

Economic Variables on credit need showed that the t-ratios for farm size,

education, family size and farm income were significant at five percent

level. Other socio-economic variables like age and farming experience

showed no significant relationship with credit need. The results from the

farm enterprises budgets showed that the profit derived from the mixture of

yam and cassava production was higher than other crop farm enterprises.

The legst viable enterprise was maizelsorghum mixed production. The

linear programming model showed that from the trials of different levels of

fhrm credit, an optimum was obtained at 4431,533.00. At this optimum

farm credit level a maximum net revenue of 44321,025.63 was obtained. In

line with what is obtained in the area, the model devoted a total of 2.1

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hectares for the production of cassava, yam, maize and sorghum

enterprises. The results further showed that labour constraints were surplus

' and land was found to be the major binding constraints. In view of the

findings of this study, the following major recommendations among others

were made: The relevant government agencies like Kogi .State Agricultural

Development Project should try to educate and assist the farmers to

develop farm plan before commencing production. This will enable them

to know the required input combinations that would maximize the use of

available farm resources with the view to reduce the wastage of farm

resources. In order to increase the farm income of farmers, Development

Banks such as Nigeria Agricultural Cooperative and Rural Development

Bank should provide more credit to farmers with the view to enable them

increase production and the extension unit of Kogi State Agricultural

~evelo~mePnrto ject should advised farmers on how to use the labour surplus to grow crop with low input requirements.