Impact of Credit on Production Efficiency: Evidence from Cassava Smallholders Farmers in Southwest, Nigeria
Adeosun, D. R. *
Department of Agricultural Economics and Farm Management, Federal University of Agriculture, Abeokuta, Nigeria.
Adegbite, D. A.
Department of Agricultural Economics and Farm Management, Federal University of Agriculture, Abeokuta, Nigeria.
Sanusi, R. A.
Department of Agricultural Economics and Farm Management, Federal University of Agriculture, Abeokuta, Nigeria.
Ayansina, S. O.
Department of Agricultural Administration, Federal University of Agriculture, Abeokuta, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
Aims: This study evaluates credit impact on production efficiency of cassava farmers in southwest Nigeria.
Study Design: Cross-sectional study.
Place and Duration of Study: This study was conducted in South West Nigeria, between June 2019 and July 2021.
Methodology: Multi-stage sampling procedure was used to select 210 small holder cassava farmers for the study. A structured questionnaire was used to collect data on respondents’ socio-economic characteristics, production efficiency and the efficiency distribution of cassava farmers.
Results: Results show that the mean technical, allocative and economic efficiencies were (\0.55,0.91\), and (\0.50\) respectively. Results of Stochastic production frontier show farm size (\(\gamma=0.664, p<0.01\) ), labour ( (\\gamma\) (\=0.183, \mathrm{p} \leq 0.01)\) and quantity of stem cutting (\(\gamma=0.160, \mathrm{p} \leq 0.05)\) increased cassava output, while sex (\(\delta\) (\=0.797, \mathrm{p}<0.01)\), marital status (\(\delta=0.600, \mathrm{p}<0.05)\), level of education (\(\delta=0.062, \mathrm{p} \leq 0.01)\), number of extension contacts (\(\delta=0.624, \mathrm{p}<0.05)\) and credit (\(\delta=0.000004, \mathrm{p}<0.05)\) significantly influenced efficiency among cassava farmers. Also, result of Maximum likelihood estimates of cost function shows rent on land (\(\omega=0.455, p<0.01)\), price of fertilizer (\(\omega=0.078, p<0.01)\) and price of herbicide \((\omega=0.069\), (\p<0.01\) ) had positive influence on total cost incurred on cassava production while marital status (\(\delta=\) (\0.600, p<0.05)\) and credit (\(\delta=0.000004, p<0.05)\) significantly influenced efficiency among cassava farmers.
Keywords: Cassava, credit, Ogun state, production efficiency, smallholder farmers