E ISSN: 2583-049X

International Journal of Advanced Multidisciplinary Research and Studies

Volume 3, Issue 5, 2023

Comparative Analysis of Formal Credit Access and Technical Efficiency among Rural Farmers in South-South Nigeria

Author(s): Edaba MIE, Onoja AO, Elum ZA


Nigeria's economy is largely agrarian in nature, with agriculture playing a dominant role through its contribution of 41% to GDP and employment of more than 70% of the working population. The catalytic role this sector plays in enabling economic development is being threatened by low productivity due to poor access to farm credit, especially among smallholder rural farmers. To investigate this phenomenon, this study is intended to assess rural credit access and resource use efficiency among cassava-based farmers in South-South Nigeria. The study counts on a field survey that was conducted in 2023, using a well-designed questionnaire. The survey sampled 284 respondents covering Rivers, Bayelsa and Akwa-Ibom States of Nigeria, which were selected through a multi-stage random sampling technique. The Cob Douglas stochastic production frontier was used to analyse the data collected. Results of the study revealed that the mean formal credit accessed by each of the three States amounted to ?252,520 for Akwa-Ibom State, ?240,687 for Rivers State and ?228,818 for Bayelsa State. Results from the stochastic production frontier showed an average technical efficiency of 0.790 for Akwa-Ibom State, 0.694 for Bayelsa State, and 0.822 for Rivers State. The major determinants of the efficiency of the crop farmers were identified as farm size (0.827, 1.006 and 0.1.009 for Akwa-Ibom, Bayelsa, and Rivers States respectively), at p > 0.01; labour (0.448 and 0.079 for Akwa-Ibom and Bayelsa States respectively), at p > 0.10; and planting materials (0.209, 0.038 and 0.195 for Akwa-Ibom, Bayelsa, and Rivers States respectively), at p > 0.10, p > 0.05, and p > 0.10. Furthermore, the major factors that determined technical inefficiency were age (0.224, -0.478 and -0.470 for Akwa-Ibom, Bayelsa, and Rivers States respectively),), at p > 0.05, p > 0.10 and p > 0.01; marital status (-0.201 and -0.653 for Akwa-Ibom and Rivers States respectively), at p > 0.05, and p > 0.01; years of farming experience (-0.105 and -0.031 for Bayelsa, and Rivers States respectively), at p > 0.05; p > 0.10, extension visit (-0.012 for Akwa-Ibom State only) at p > 0.10, and household size (-0.033 for Rivers State only), at p > 0.10. There is an urgent need to monitor and offer technical knowledge on how to effectively integrate the restricted but essential components of farm production in order to harness and utilize the limited financing facilities and production resources extended to farmers.

Keywords: Efficiency, Comparative, Credit, Farmers, Food, Production, Resources

Pages: 667-673

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