Farmer's Credit Stock Determinants from Commercial Banks and Its Effects on Agricultural Production in Nigeria
World Research Journal of Tropical Agriculture
ISSN: 2322-0627 & E-ISSN: 2322-0635 || Volume: 1 Issue: 2, 2013: 27-30 ||
Available online at http://www.bioinfopublication.org/jouarchive.php?opt=&jouid=BPJ0000179
FARMERS’ CREDIT STOCK DETERMINANTS FROM COMMERCIAL BANKS AND ITS EFFECTS
ON AGRICULTURAL PRODUCTION IN NIGERIA
UDENSI A.I.1, ANYIRO C.O.2*, OREBIYI J.S.1, EZE C.C.1, OHAJIANYA D.O.1 AND EZEH C.I.2
1Department
of Agricultural Economics, Federal University of Technology, Owerri, Nigeria. of Agricultural Economics and Extension, Abia State University, Umuahia Campus, Umuahia, Abia State, Nigeria.
*Corresponding Author: Email- anyirochidozie@gmail.com
2Department
Received: November 14, 2013; Accepted: December 09, 2013
Abstract- This study sought to examine farmers’ credit stock determinants from commercial banks and its effect on agricultural production in
Nigeria. Time series data, covering the periods of 1977-2007, culled basically from the Central Bank of Nigeria’s Statistical Bulletin, 2009 were used. Adopting a simultaneous equation system, Two-Stage Least Square approach, results showed that commercial banks’ credit accessed by farmers (CR) had significant direct positive effect on the Index of Agricultural Production (IAP) at 1% α-level and also indirectly exerted significant positive effect on IAP by attracting more Foreign Private Investment in agriculture (FPI -Agr) at 1% α-level. It was also observed that all the modeled macroeconomic determinants of the volume of commercial banks’ credit accessed by farmers were significant and positively correlated with CR except for Minimum Rediscount Rate (MRR) which was negatively correlated with CR. Minimum rediscount rate (MRR) was found to be the most important macroeconomic determinant of the volume of commercial banks’ credit accessed by farmers (CR) while interest rate, contrary to major opinions, was the least. This study therefore, suggests that the Nigerian government should strategize on effective
ISSN: 2322-0627 & E-ISSN: 2322-0635 || Volume: 1 Issue: 2, 2013: 27-30 ||
Available online at http://www.bioinfopublication.org/jouarchive.php?opt=&jouid=BPJ0000179
FARMERS’ CREDIT STOCK DETERMINANTS FROM COMMERCIAL BANKS AND ITS EFFECTS
ON AGRICULTURAL PRODUCTION IN NIGERIA
UDENSI A.I.1, ANYIRO C.O.2*, OREBIYI J.S.1, EZE C.C.1, OHAJIANYA D.O.1 AND EZEH C.I.2
1Department
of Agricultural Economics, Federal University of Technology, Owerri, Nigeria. of Agricultural Economics and Extension, Abia State University, Umuahia Campus, Umuahia, Abia State, Nigeria.
*Corresponding Author: Email- anyirochidozie@gmail.com
2Department
Received: November 14, 2013; Accepted: December 09, 2013
Abstract- This study sought to examine farmers’ credit stock determinants from commercial banks and its effect on agricultural production in
Nigeria. Time series data, covering the periods of 1977-2007, culled basically from the Central Bank of Nigeria’s Statistical Bulletin, 2009 were used. Adopting a simultaneous equation system, Two-Stage Least Square approach, results showed that commercial banks’ credit accessed by farmers (CR) had significant direct positive effect on the Index of Agricultural Production (IAP) at 1% α-level and also indirectly exerted significant positive effect on IAP by attracting more Foreign Private Investment in agriculture (FPI -Agr) at 1% α-level. It was also observed that all the modeled macroeconomic determinants of the volume of commercial banks’ credit accessed by farmers were significant and positively correlated with CR except for Minimum Rediscount Rate (MRR) which was negatively correlated with CR. Minimum rediscount rate (MRR) was found to be the most important macroeconomic determinant of the volume of commercial banks’ credit accessed by farmers (CR) while interest rate, contrary to major opinions, was the least. This study therefore, suggests that the Nigerian government should strategize on effective
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