ECONOMIC EVALUATION OF CREDIT REQUIREMENTS OF SMALL-SCALE FARMERS IN KOGI STATE, NIGERIA

ABSTRACT

This study was designed to evaluate the Credit requirements ofsmall-scale farmers in Kogi State and to subsequently determine theoptimum farm credit for farmers in the area. Multi-stage random samplingmethod was used in the selection of the respondents. In all, a total of 30respondents were randomly selected from eight communities to give a totalof 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 percentlevel. Other socio-economic variables like age and farming experience

showed no significant relationship with credit need.

The results from thefarm enterprises budgets showed that the profit derived from the mixture ofyam and cassava production was higher than other crop farm enterprises.The legst viable enterprise was maizelsorghum mixed production. Thelinear programming model showed that from the trials of different levels offhrm credit, an optimum was obtained at 4431,533.00. At this optimumfarm credit level a maximum net revenue of 44321,025.63 was obtained. Inline with what is obtained in the area, the model devoted a total of 2.1hectares for the production of cassava, yam, maize and sorghumenterprises. The results further showed that labour constraints were surplus’ and land was found to be the major binding constraints. In view of thefindings of this study, the following major recommendations among others

were made:

The relevant government agencies like Kogi .State AgriculturalDevelopment Project should try to educate and assist the farmers todevelop farm plan before commencing production. This will enable themto know the required input combinations that would maximize the use ofavailable farm resources with the view to reduce the wastage of farmresources. In order to increase the farm income of farmers, Development

Banks such as Nigeria Agricultural Cooperative and Rural Development

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