The Impact of Credit on Poultry Farm Productivity in Oyo State, Nigeria

Abstract

The study examined the impact of credit constraint on the productivity of poultry farmers. The sources of credit and the amount demanded by the farmers in the study area were assessed. A random sample of farmers was taken in Ibadan metropolis. Primary data was collected on their socio-economic characteristics, sources of capital and credit, quantities and prices of their farm inputs and outputs. The data was analyzed using descriptive statistics and regression analysis. Results show that informal sources of credit are still preferred and more than half of the respondents are credit constrained. The statistically significant factors that affect farm productivity include value of feed, quantity of water, numbers and age of birds, training and the credit constraint condition of farmers. Credit constraint will reduce farm's productivity. It shows that access to credit is not sufficient to improve productivity but the credit must be adequate to ensure sufficient working capital. Both commercial and development banks should be encouraged to extend adequate credit to this sub-sector. This could be effectively carried out through their cooperative societies. The transaction cost of credit should also be reduced by extending credit to farmers through these societies. This will encourage more farmers to obtain loan from formal sources. There is the need for a thorough appraisal of poultry projects as it will assist in the correct assessment of the credit needs of loan applicants.

Keywords: poultry, credit constraints, formal and informal lenders, productivity