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PROJECT TOPIC AND MATERIAL ON SOCIO-ECONOMIC DIMENSIONS AND CREDIT SUPPLY TO POULTRY FARMERS IN ODEDA LOCAL GOVERNMENT AREA OF OGUN STATE NIGERIA
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- Name: SOCIO-ECONOMIC DIMENSIONS AND CREDIT SUPPLY TO POULTRY FARMERS IN ODEDA LOCAL GOVERNMENT AREA OF OGUN STATE NIGERIA
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The Agricultural sector in Nigeria has remained one of the largest contributors to the gross domestic product of the nation’s economy contributing an average of 39% of GDP. Since the beginning of the millennium, over 80% of the country’s population living in the rural areas is directly or indirectly dependent on agriculture for livelihood. “NBS 2005” Livestock sector plays a crucial role in rural economy and livelihood, and access to credit has both direct and indirect effects on farm production. This has examined the factors affecting farmers’ participation in credit market and how socio-economic dimensions of poultry farmers their suitability to access credit. Variables for this study included household, collateral, level of education, years of experience and farm size against credit supply.
Descriptive and inferential methods were used to analyse the data collected from one hundred (100) poultry farmers within Odeda Local government of Ogun state Nigeria. Instrument use for data collection was poultry farmers’ access to credit questionnaire (PFACQ).
The result shows that Household size and collateral have a significant impact on access to credit from formal and informal financial institution (t-statistics ≥ 1.64 in absolute value terms) while level of education; years of experience and farm size are not statistically significant on credit supply since t-statistics ≤ 1.64.
The study concluded that credit supply was not dependent on the years of experience, level of education or farm size of poultry farmers but to a certain level, dependent on the Household and the collateral of these farmers. Therefore it is recommended that the government should make loans available to poultry farmers in Nigeria irrespective of their exposure in knowledge, in the business or the available facilities for the poultry farming.
Keywords: Poultry farming, Credit supply, level of education, years of experience, collateral
Word Count: 290
TABLE OF CONTENTS
Title Page i
Table of Contents vi
List of Tables vii
List of Figures ix
1.1 Background to the Study 1
1.2 Statement of the Problem 3
1.3 Objective of the Study 3
1.4 Research Questions 4
1.5 Hypotheses 4
1.6 Significance of the Study 4
1.8 Justification for the Study 5
1.9 Operational Definition of Terms 5
2.1 Conceptual Review 7
2.2 Concepts of Credits 11
2.3 Concepts of poultry farming 12
2.4 Theoretical Framework 20
2.5 Empirical Findings 26
2.6 Gap in Literature 29
3.2 Population 30
3.3 Sample size and sampling Technique 30
3.4 Instrument 31
3.4.1 Validity of Instrument 31
3.4.2 Reliability of Instrument 31
3.5 Method of Data Collection 32
3.6 Method of Data Analysis 32
3.7 Objectives 32
3.9 Ethical Consideration 35
CHAPTER FOUR: DATA ANALYSIS, RESULTS AND
DISCUSSION OF FINDINGS
4.1 Descriptive Statistics for Variable Employed 36
4.1.1 The Level of Education of the Poultry Farmers 36
4.1.2 Household Size 37
4.1.3 Farm Size 38
4.1.4 Collateral of the Poultry Farmer 39
4.2 Discussion of Findings 40
4.2.1 Test of Hypothesis One 41
4.2.2 Test of Hypothesis Two 42
4.2.3 Test of Hypothesis Three 42
4.2.4 Test of Hypothesis Four 42
4.2.5 Test of Hypothesis Five 43
- Summary 44
- Summary of Findings 44
- Conclusion 45
5.3 Recommendations 46
5.3.1 Policy Implication 46
5.4 Contribution to Knowledge 47
- Limitation of the Study 47
5.6 Suggestion for Further Research 47
LIST OF TABLES
3.7.1 Discussion of Variables 33
4 1.1 Educational Attainment of the Poultry Farmers 36
4.1.2 Household Size 37
4.1.3 Farm size 38
4.1.4 Collateral of the Poultry Farmer 39
4.2: Impact of the dependent variables on access to credit 41
LIST OF FIGURES
1 Educational Attainment 37
2 Household size of the Poultry Farmers 38
3 Average Number of Birds 39
4 Asset of Poultry Farmers 40
1.1 Background to the Study
The Agricultural sector in Nigeria has remained one of the largest contributors to the Gross Domestic Product of the nation’s economy. For the past two decades it has contributed an average of 39% of the country’s GDP. Over 80% of the country’s population living in the rural areas is directly or indirectly dependent on agriculture for its livelihood (NBS, 2005). Livestock sector plays a crucial role in rural economy and livelihood. This is one sector where the poor contributes to the growth directly instead of getting benefit from growth generated elsewhere. In Nigeria, the livestock sector forms an important livelihood activity for most of the farmers, supporting agriculture in the form of critical inputs, contributing to the health and nutrition of the household, supplementing incomes, offering employment opportunities, and serving as a store of wealth in times of need. It acts as a supplementary and complimentary enterprise. Livestock is also important as a part of agriculture diversification and income enhancement. Livestock plays a vital role in the overall economic development of the farm households and nation as a whole.
The prolificacy of livestock which include; goat, pig and poultry are the influencing factors for rearing them. The returns are quick; losses, if any, are recovered soon and the poor can afford them. The multiple species-animal husbandry system is also environmental friendly. Income from livestock production contributes a significant percentage of the total income of rural farm households engaged in agricultural production (Johnson, Perry and Morehart. (1995). Among livestock – based vocations, poultry occupies a pivotal position because of its enormous potential to bring about rapid economic growth. The importance of the poultry sub-sector is chiefly in the provision of meat and egg as well as the provision of employment either directly or indirectly and the contribution to the revenue (Gross Domestic Product) of the country. The poultry sub-sector of the economy in Nigeria remains chiefly primitive. This is because government, at all levels, has neglected it for a long time. The poultry industry in Nigeria has the highest number of poultry farm in Africa. Currently, Nigeria has about 10% of the population, and is responsible for less than 15 to 18% employment opportunities, due to the fact that the industry is mainly subsistent.( Afolami (2011), in comparison with other livestock products (e.g. beef, mutton, pork), poultry is considered to be more palatable, having lower level of cholesterol and high protein value (Adegbola, 2000) Egg, a product of the industry, gives about 3.5 g of the total 7.2 g animal protein requires for individual dietary need per day. For developing countries, poultry contributes just about 15% of total animal protein intake, with approximately 1.3 kg of poultry products consumed per head per annum (NLDC, 2000).
The World Health Organization (WHO) and Food and Agriculture Organization (FAO) recommended 3.6 kg per capita intake of poultry products per annum. Therefore to meet the basic minimum of the dietary needs of Nigerians, the country requires an annual production of 10 to 20 billion eggs and 0.3 to 0.6 million tone of poultry meat (NLDC, 2000). In Nigeria, production of food has not increased at the rate that can meet the increasing population. While food production increases at the 2.5%, food demand increases at 3.5% due to high rate of population growth of 2.83% (CBN, 2004). The apparent disparity between the rate of food production and demand for food in Nigeria has led to increasing resort to food importation and high rates of increase in food prices. The demand and supply gap for animal protein intake is so high.
The Food and Agricultural Organization recommends that the minimum intake of protein by an average person should be 65gm per day; of this, 36gm (i.e. 40%) should come from animal sources. Nigeria is presently unable to meet this requirement. The animal protein consumption in Nigeria is less than 8gm per person per day, which is a far – fetched from the Food and Agricultural Organization minimum recommendation (Niang & Jubrin, 2001). Poultry food plays a useful role in bridging the protein gap in Nigeria. It is palatable and generally acceptable. This acceptability cuts across nearly all cultural and religious boundaries in the country. The importance of poultry to the national economy cannot be overemphasized, as it has become popular industry for the small holders that have great contribution to the economy of the country. The enterprise has assumed greater importance in improving the employment opportunity and animal protein production in Nigeria. To this end, an up-to-date knowledge of the profitability and efficiency of resource utilization in the industry will go a long way in bridging some knowledge gap and help in formulating policies aimed at ensuring increased and more profitable poultry production in the country.
1.2 Statement of the Problem
The provision of credit has increasingly been regarded as an important tool for raising the incomes of rural population, mainly by mobilizing resources to more productive uses (Atieno, 2001). Access to sufficient credit is certainly a requisite to viable production outfits, especially as the industries are some of the way out of industrial backwardness, unemployment and mass poverty.
Inadequate credit affects the purchasing power of producers to procure farm implement, and make farm related investments, which they can fall back on to help augment incomes and alleviate poverty. Inadequate access to credit indirectly affects the risk behaviour of producers (Eswaran & Kotwal, 1990; Guirkinger & Boucher, 2005). It usually compels poultry farmers to invest in less risky and less productive technologies rather than in the more risky but productive ones (Dercon, 1996). Risk behaviour has negative effects on technical efficiency of the poultry farmers in that it limits the effort of the poultry farmers in attaining maximum possible output and, hence, efficiency is compromised. It is possible that some of the famers in Odeda Local government areas operate below their full capacities. A lot of poultry farms are likely to have folded up as a result of this inadequate access to credit. It is possible that socio – economic dimension has influence on access to credit. This perceived problem of access to credit by poultry farmers in Odeda Local Government, area of Ogun State moved the curiosity of the researcher to investigate socio-economic dimension of the poultry farmer in relation to access to credit.
1.3 Objective of the Study
The main objective of the study is to determine how socio-economic factors affect credit supply to poultry farmers in Odeda local government of Ogun state. The specific objectives are to:
- show how level of education affect credit supply to poultry farmers;
- determine how years of experience influence credit supply to the poultry farmers;
- analyse the relationship between household size and credit supply of the poultry farmers;
- establish how farm size affect the supply of credit to poultry farmers and
- show the extent of the relationship between collateral security and credit supply to poultry farmers
1.4 Research Questions
- How does level of education affect credit supply to the poultry farmers?
- How do years of experience influence the supply of credit to the poultry farmers?
- What is the relationship between the household size and suitability of the poultry farmers to access credit?
- How does the size of farm affect the supply of credit to poultry farmers?
- To what extent does collateral security affect credit supply to the poultry farmers?
The null hypothesis is at level 10% significant
Ho1: Level of education has no significant effect on credit supply
Ho2: Credit supply is not significantly affected by years of experience
Ho3: There is no significant relationship between household size and suitability of poultry farmers to access credit
Ho4: There is no significant relationship between size of farm and credit supply to poultry farmers
Ho5: Collaterals do not have significant relationship with credit supply to poultry farmers
1.6 Significance of the Study
The findings of the study expose some factors that might be responsible for poor production of poultry farming. The identified areas where government at different levels could come in to assist poultry farmers would be brought into focus in order to bridge the gap. This study might be of significant use to stakeholders such as farmers, investors, local government, policy makers, and nation at large.
To the Farmers, this study would be relevant to farmers who want to go into poultry business because it could provide the detailed information on economic importance of poultry farming. To the investors, the study would also throw more light on the performance and profitability of poultry business for investors that are interested in poultry business and for expansion of already existing ones. To local government, its gives education concerning farm size and population of farmers in the entire local government so as to attract credit facilities either from government or private individuals. To policy makers, the intricate of credits constraints and supply of credit by financial institutions would be reviled as this would be used to policy makers and national development planners to know where emphasis and logistic supports are needed. To the nation at large, government needs the information in order to know how to allocate budget for agricultural production in rural development.
1.7 Scope of the Study
This study was designed to examine socio-economic factors that determine access to credits by poultry farmers in Odeda Local Government. It is expected to be used for further investigation on, either the efficiency or access to credit in poultry farms in Ogun State, Nigeria. The report emanating from the study is based on statistical data, reports, and literature information. This study has covered one hundred (100) poultry farms in Odeda Local Government Area of Abeokuta, Ogun State.
1.8 Justification for the Study
The study is significant as it aimed at investigating socio-economic dimension of the poultry farmers in relation to access to credit and providing suggestions on how the identified problems can be solved.
1.9 Operational Definition of Terms
Socio-economic Factors: These are factors that may affect the supply of credit to the poultry farmers.
Level of Education (LOE): The height of formal educational attainment of the poultry farmers.
Years of Experience (YOE): The period of time (in years) a poultry farmer has been in the poultry farming.
Size of Farm (SOF): This is the size of poultry farm measured in terms of number of eggs and chickens.
Household Size (HHS): The number of dependence of the poultry farmer from within and extended family.
Collateral: This is the assets that qualify the farmer for loan credit, and guarantee repayment default.
Credit Supply: Is the availability of facilities for future repayment with interest.
Financial Inclusion: This is the delivery of financial services to disadvantage and low-income segments of poultry farmers in the society.