Using Nigeria Agricultural Cooperative and Rural Development Bank small holder direct loan scheme to increase agricultural production in rural Oyo State, Nigeria 1 1
Oyeyinka, R. A. and K. K. 2Bolarinwa
Department of Agricultural Education,Federal College of Education (Special), P. M. B. 1089, Oyo, Oyo State, Nigeria. E-mail: email@example.com 2
Department of Agricultural Administration,
College of Agricultural Management and Rural Development University of Agriculture Abeokuta, Nigeria. Correspondent author: E-mail: firstname.lastname@example.org Abstract: Credit disbursement has been given priority by the Nigerian Agricultural Cooperative and Rural Development Bank. The study examined the use of NACRDB Small-holder Direct Loan Scheme to increase agricultural productivity in the rural areas of Oyo State, Nigeria. Systematic random sampling technique was used to select 130 beneficiaries and 130 non-beneficiaries for the study. The results of the study showed that beneficiaries have significantly higher mean yield index (1467), than non-beneficiaries (600). Also the income realized by the beneficiaries (N70,000 per annum) is higher than that of non-beneficiaries (N30,000 per annum). Generally, the beneficiary’s access to credit has enabled them to make efficient used of improved farm inputs and labour than non-beneficiaries. It could be deduced that NACRDB small holder direct loan scheme is capable of transforming rural agriculture. Keywords: Agricultural credit, loan scheme, agricultural production INTRODUCTION Agriculture has been and is still the bedrock on which every successful and stable economy the world over is built. In Nigeria today, agriculture accounts for one third of the Gross Domestic Product (GDP) and employs about two third of the labour force (Oyeyinka, 2002). The Nigerian Agricultural policy places the small scale farmers in central focus. This is because, the nation’s agriculture has always been dominated by the small-scale farmers who represent a substantial proportion of the total population and produce about 90 – 95 percent of the total agricultural output in the country. Prior to the advent of the oil boom era and that of money illusion in the economy, Nigeria was noted for her high production performance, in terms of food and cash crops as well as the supply of most industrial raw materials, which is the product of our smallscale farmers. For instance, the total agricultural output between 1986 and 1992 grew at the rate of 0.6 percent per year on the average. This is in contrast to the growth rate of 3.5 percent between 1981 and 1986 (World Bank, 1996). However, this important role agriculture has played in the Nigerian economy has declined tremendously. The decline has for a long time been blamed on the neglect of the rural sector, comprising mainly the
' small-scale farmers by successive administration in the country. As the role of agriculture in the economy decline, food importation increase, thus leading to the depression of the locally produced food, which has decreased farmers, expected income that could have been used to improve their farm productivity (Okunmadewa, 2003). This phenomenon led farmers to produce for their household use only, and as such they did not have marketable surpluses, when there are surpluses, it is usually too meagre to contribute enough income for household consumption and social obligations as well as re-investment in the farm. Since their income is small, most of these farmers resort to borrowing in order to fulfill their household economic demand and social obligations. Inadequate credit provision and poor marketing systems have reduced agricultural productivity drastically to the extent that food importation has been on the increase in recent years. Since agriculture in Nigeria and most other developing countries is where small-scale farmer’s producers predominate, several constraints and barriers, which appear insurmountable,...