ABSTRACT

Despite the economic importance of the agricultural sector in national

development, Nigeria has performed poorly relative to other developing

countries. More-so, agricultural production is still highly dominated by the

small holder farming system. This system has, in the time past, suffered

from limited access to credit facilities, modern technology farm inputs and

inefficient use of resources. Credit requirements of the farming sector

have increased rapidly over the past few decades resulting from the rise in

use of fertiliser, biocides, improved seeds, and hike in their prices.

Quantitative and Qualitative research was applied in this study, and data

was gotten from both primary (survey) and secondary (online articles,

journals etc) sources, while Stratified-Cluster sampling was used to select

the respondents. This resulted in a total of sixty (60) farmers/farm owners

generally. Frequency distribution tables, percentage and relevant charts

were used to describe the sample, while a regression model was

developed to determine the effect of small and medium enterprises on

poverty.

The results indicated that Employment Density (measured in proxy as

number of employees), Productivity (measured in proxy as monthly turn-

over), and Level of Education had significant impact on poverty. Each of

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these variables impact/affect poverty by a factor of 0.95, 1.04, and 0.71

respectively per unit increase.

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 CHAPTER ONE

1.1 INTRODUCTION
Agriculture remains the main engine for economic growth for most

Sub-Saharan African countries, contributing around 40 percent to

their gross domestic product and employing more than half of their

total labour force. Despite its economic importance, however, the

agricultural sector in Nigeria has performed poorly relative to other

developing countries. A large part of the literature that has

addressed this issue has pinpointed poor policies and institutional

failures as the primary culprits. For example, Sachs and Warner

(1998) and Johnson and Evensohn (2000), opined that pre-colonial

slave trade, adverse incentive structures imposed by the imperial

powers during colonization, poor economic policies in the post-

colonial period and international trading regimes have all played an

important negative role in Africa’s agricultural performance.

Three main factors that contribute to agricultural growth are the

increased use of agricultural inputs, technological change and

technical efficiency. Technological change is the result of research

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and development efforts, while technical efficiency with which new

technology is adopted and used more rationally is affected by the

flow of information, better infrastructure, and availability of funds and

farmers’ managerial capabilities. Higher use and better mix of inputs

also requires funds at the disposal of farmers. These funds could

come either from farmers’ own savings or through borrowings.

Nigeria’s agricultural potentials are enormous, including an arable

land area of 72 million hectares of which only 50 per cent is currently

under cultivation. A large expanse of land can therefore still be

brought under cultivation. The country is endowed with a wide range

of ecological zones – from the Sahel, Sudan and Guinea Savannah of

the North to the Southern Rain Forest – that makes it possible to

produce many varieties of crops and livestock. The climatic

conditions are suitable for the production of cocoa, coffee, rubber,

sugar cane, yam, cassava, maize, millet, rice, banana, palm fruit,

orange, etc. Livestock farming also offers major attraction. Nigeria’s

ample waters provide great potentials for fishing and other aqua-

cultural activities. On the whole, agricultural production currently

accounts for over 40 per cent of the country’s gross national product.

More-so, in Nigeria, agricultural production is still highly dominated

by the small holder farming system. The farms are dominated by

4
small scale farmers who are responsible for about 95% of total

production. This is not unconnected with the unattractiveness of

agriculture which is a result of lack of necessary infrastructures in the

rural areas which forms the bulk of agricultural zones in the country.

In addition, small scale agriculture has in the time past suffered from

limited access to credit facilities, modern technology farm inputs and

inefficient use of resources. Credit requirements of the farming sector

have increased rapidly over the past few decades resulting from the

rise in use of fertiliser, biocides, improved seeds and mechanisation,

and hike in their prices.

Very often, agricultural sector stakeholders allude to the inadequate

quantum of public sector spending on agriculture, while paying less

attention to the quality of public spending in agriculture.

Services/functions with a mixed public-private good character can be

commercialised by contracting out to private operators or by cost-

recovery measures in public provision.

It is crucial to diversify and broaden the financing base for the

country’s agricultural development. To ensure the sustainability of

agricultural sector funding, there is need to elicit and leverage funds

from the private sector and civil society. Funding for the agricultural

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research system in Nigeria should be diversified to include public,

private, and beneficiary sources.

Competitive funds for agricultural production need to be established.

This fund would be used to finance some high-priority national

research activities, especially upstream research, and research within

innovative partnerships among national agricultural research

institutions, universities, and the private sector. The new Agricultural

Research Council of Nigeria should mobilize and coordinate the

funding for agricultural research and production. It is also important

to explore agricultural sector funding under the auspices of the New

Partnership for African Development (NEPAD). Another could be

levies on the exports of agricultural produce such as cocoa, rubber,

oil palm, cotton, cashew, and gum Arabic. Service users (for example

through producer associations) can be encouraged to provide funds

for research and extension priorities defined by them. This will create

a demand-driven hold research and extension by which service users

(farmers) can hold research and extension systems more

accountable for services provided.

Existing government agricultural financing institutions have a crucial

role to play. These institutions exist to correct the imbalance of

finance and credit suffered by agriculture vis-à-vis other economic

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sectors. They are designed to compensate for inadequate amounts of

credit and capital which the formal financial markets allocate to

agriculture and agro-allied investments. These institutions include

the Nigerian Agricultural Cooperative and Rural Development Bank

(NACRDB), the Nigerian Agricultural Insurance Company (NAIC), the

newly-established Commodity Marketing and Development

Companies, the Agricultural Credit Guarantee Scheme Fund (ACGSF).

Presently the outreach and impact of the ACGSF is limited and need

to be enhanced through enlightenment, increased transparency of

procedures and minimal administrative red-tape

1.2 STATEMENT OF THE PROBLEM

Inadequate funding hampers the ability of research institutes to

respond to poor farmers’ needs. For example, the federal and state

governments have not funded the Agricultural Development

Programmes (ADP) at sustainable levels. Although the ADPs have had

some positive impact on Nigeria’s rural sector, they have been

plagued by shortages of financial resources, especially after the

closure of the World Bank loans in early 1990s for reasons including a

lack of counterpart funds from the government. ADPs’ outreach

services to poor farmers by inadequate operating funds, thereby

putting significant limits on the effectiveness of the ADPs

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Availability of credit has been identified as a major constraint to

agricultural development in peasant economies. Small-scale farmers

dominate the agricultural sectors of these countries. Whilst there are

often considerable opportunities to increase production and farm

incomes by adopting new technology this potential can only be

realized if farmers can gain access to funds to finance the additional

inputs that are invariably required. All too frequently small-scale

farmers have insufficient savings to finance the investment in

additional inputs.

Under these circumstances the obvious solution for farmers is to

borrow against the improved returns they expect to achieve by

adopting improved technology. Unfortunately, the desired credit is

not available. This is largely because institutional lenders are

reluctant to advance credit to a sector where historically there is a

high incidence of default. In part this can be attributed to the

dependence of agricultural production on nature and the high

covariance of risk from adverse weather and the incidence of disease

between producers in any given location.

To this end, this study seeks to evaluate how effective retail banking

has been in financing and also aiding agricultural growth in Ifelodun

local government area of Kwara state.

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1.3 RESEARCH QUESTIONS
Based on the statement of the problem, this study aims at answering

the following research questions.

1. What are the factors influencing the agricultural output/yield?

2. Do banks have operational schemes/programmes that will aid

agricultural production?

3. What kind of effect/impact does the availability of credit

facilities (in form of loans) have on agricultural production?

4. What are the factors leading to the non-payment of credit

facilities acquired by the local farmers from the banks?

1.4 OBJECTIVE OF THE STUDY

In light of the foregoing, this study seeks to evaluate whether retail

banking services has any effect in agricultural production, especially

in the area of advancing credit/loan facilities to local farmers in

Ifelodun local government area of Kwara state. Other objectives are

as follow:

i. To identify the factors affecting higher agricultural output/yield.

ii. To identify operational schemes/programmes of banks in aiding

agricultural production

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 iii. To determine the impact of the availability of credit facilities (in

form of loans) on agricultural production.

iv. To identify factors leading to the non-payment of credit facilities

acquired by the local farmers from the banks.

1.5 SIGNIFICANCE OF THE STUDY

The emergence of a strong and dynamic banking sector is regarded

as a good sign by key stakeholders in both the agricultural and

banking sectors. This is so because major players in the nation’s

agricultural sector will immensely benefit from the newly emerged

banks’ robust financial base and lending policies.

Evidently, this study will be of significant importance to economic

technocrats, policy makers, and the nation at large in the following

the ways:

• Create awareness on the need to take further advantages of

banking programs/schemes available in the country.

• Bring to consciousness the existing potential in the agricultural

sector of our nation and also how it can boost economic

growth

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 • Assist policy makers, executives and other practitioners in the

industry to monitor, evaluate and adjust to the on-going

trends in the agriculture.

1.6 RESEARCH METHOOLOGY

This study requires both qualitative and quantitative research

approach, while the data type required is basically ordinal and

measurement data. The sample area i.e Ifelodun LGA, will be grouped

into existing communities/wards by means of cluster sampling

technique. After the clusters are identified, the target farmers will be

administered the questionnaires. Due to financial and time

constraints, and also the proximity of each cluster from the other, a

total of twenty (20) farmers per community/ward will be surveyed.

The survey data will be evaluated using descriptive statistics such as

means, standard deviations, and percentages. To this end, a

frequency distribution table will be constructed. Further analysis

carried out on the survey data entails the development of a

production model where agricultural production/output is the

explained variable i.e Y. Also, credit/loan facilities (measured in naira)

will form a part of the explanatory variables alongside other factors.

These other factors will be selected based on the output of a principal

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component analysis (pca) to be carried out on the items highlighted

on the questionnaire.

1.7 SCOPE OF THE STUDY

This study involves local farm owners and farmers from the individual

communities in Ifelodun LGA. Although, there are many other factors

that could impact agricultural production, this study covers only the

effect of credit/loan facilities on agricultural production, and the role

of retail banks in facilitating such facilities. Also the variables of age,

sex, marital status, educational background, ethnicity, religion, and

economic status among others were used for this study.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 THE NIGERIAN AGRICULTURAL SECTOR

During Nigeria’s political independence in 1960, agriculture was the

mainstay of the nation’s economy, providing food to feed the

population and fetching the bulk of the nation’s foreign exchange

earnings. However, the emergence of crude oil since the early 1970s

has changed the nation’s economic profile, marginalizing agriculture

in favour of the petroleum industry. In order to enhance the nation’s

economic growth, it is necessary to diversify the economy into non-

traditional exports. There-by reducing vulnerability to price instability

associated with the crude oil markets. In the agricultural sectors,

diversification could be horizontal or vertical. These require

processing primary agricultural commodities into intermediate and

finished products, with considerable value-added. This process is

expected to fetch higher export earnings with such commodities as

cocoa, cotton, palm produce, rubber, etc. Also, export diversification

into non-traditional agricultural commodities can become a veritable

source of foreign exchange earnings. This may include exportation of

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cut flowers, fruits, vegetables, herbs and several sea foods. These

agricultural commodities have a high dynamic potential because of

their high unit value and high elasticity demand. Therefore,

successful diversification into such products generally requires

introduction of new technologies. If these are put in place, positive

linkages may be created with domestic industry in food, beverages

and tobacco sector which are likely to spur export orientation, as well

as the emergence of domestic firms processing agricultural

commodities that may eventually become large enough to compete

in international markets (UNCTAD, 1998). Despite agriculture’s

crucial position in the national economy, it has remained below its

production potential, particularly in the past three decades. This

negative trend is reflected in the under-capitalization, which accounts

for its lack of competitiveness in the global markets. However, this

unenviable position can be reversed by injecting additional resources

into the agricultural sector from the windfall earnings that accrue to

the petroleum industry from time to time. For example, in the

aftermath of the recent crisis in the Middle East, where American-led

coalition forces invaded Iraq in 2003, oil prices have reacted sharply,

rising in recent times beyond $40 (USD) per barrel to the current

price of $83 (USD) per barrel in September 2007. Additional

14
resources generated from the windfall can provide the nation’s

agricultural sector with the support it needs to tackle food insecurity,

and foster export diversification.

New resources for the nation’s agricultural sector can be tailored to

assist smallscale farmers and their organizations through the

following schemes:

(a) Micro-credit programmes, (b) Provision of agricultural inputs with

subsidies where necessary, (c) Additional funding to assist the

nation’s agricultural research institutes to generate novel agricultural

technologies, (d) Capacity building for both private and public

extension agencies to disseminate sustainable agricultural

techniques, (e) Fostering enduring partnerships between farmers’

organizations, governmental bodies and international development

agencies, (f) Developing, export markets for the nation’s primary and

processed agricultural commodities and (g) Upgrading social and

physical infrastructure, particularly in rural areas, where they are in

dismal conditions.

2.1.1 Major Sources of Agricultural Productivity

A. A. Komolafe (2001) stated that there is great potential in

developing economies to resuscitate and expand production of

traditional agricultural exports as well as new ones given the current

15
level of resource endowments and the new market potential offered

by regional integration. Available data show that of the total land

area of 91,077 thousand hectares, about 35 per cent or less is

currently crop land, about 23 per cent is pasture land while about 15

per cent is forest. The land mass can also be classified into three

main vegetations: swamps/rain forest, savannah and semi-arid

savannah.

He further states that about 73-75 per cent of Nigeria’s land mass is

amenable to farming and can support a wide range of tree and staple

food crops, livestock and forestry production. Also blessed with a long

marine coastline and numerous rivers and lakes, it can boast of

fishing and aquaculture.

In their publication “Technical and Allocative Efficiencies of Small

Scale Growers in five selected Local Government Areas of Ebonyi

State”, Ejike, S.O., and A.O. Ukut, (2001), explained that the potential

exists to resuscitate traditional export crops such as cocoa, rubber,

palm produce, coffee through replanting of aged plantation and in

some cases cleaning up abandoned ones. They, Ejike, S.O., and A.O.

Ukut, (2001), further stated that there is also potential to corner

exports of staple crops such as cassava and yam that Nigeria is

renowned as a major producer while the savannah zones support a

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wide range of traditional grains such as sorghum, maize, beans and

oil seeds. Indeed, our land resources are one that can guaranty that

the nation is self-sufficient in the production of a wide variety of food

crops and livestock. The greatest supply side challenge would

therefore to strive to raise productivity through technological change

(use of intensive chemicals, fertilizers, integration of livestock into

farming systems, better irrigation methods, hand-tools and storage

methods and improved animal and crop husbandry.

Again, Dimgba F. O (2001), emphasized that large domestic markets

provided by agro-allied industries especially the food and beverage

industries offer opportunity to add value to traditional non-export

grains such as sorghum and cassava mainly to target ECOWAS

market. This, he opined, would represent a major dividend of the

current regional integration effort. Opportunities also exist to

substitute traditional grains for imported ones by industries such as

sorghum and maize for malted barley in the brewery industry,

cassava and other grains in the flour and feed industry instead of

wheat and a host of others. These are immense opportunities for

resuscitating and inducing agro-allied exports.

Adeleke T. O (2003), in his publication “Economics of Farm

Production and Marketing” clearly emphasized that there is also

17
great potential for piggery and other livestock production targeted

mainly at export markets. He also stated that “One area of

comparative advantage that has been relatively unexploited is

cultivation of fresh fruits, vegetables and horticulture for export, and

that almost all flora and fauna can grow in Nigeria with very little

effort.”

2.1.2 Constraints to Increasing Agricultural Productivity.

(a) Sector-wide Constraints

Available research results and literature have identified a number of

sector-wide constraints to increasing agricultural productivity in

Nigeria. According to Fakunle, J. O (2001), these include: poor

agricultural pricing policies, low fertilizer use, low access to

agricultural credit, land tenure insecurity, land degradation, poverty

and gender issues, low and unstable investment in agricultural

research, and poor market access and marketing efficiency.

Poor Agricultural Pricing and Low Fertilizer Use

Fertilizer use is promoted mainly by the fertilizer subsidy policy in

Nigeria. Input subsidies have been a part of Nigeria’s agricultural

price policy since independence, and in spite of economic reforms in

Nigeria, fertilizer subsidies have remained (Fakunle, J. O, 2001).

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In addition, Ajuonuma O.O, (1999) reiterated that under these

sustained and high input subsidy programs, investments in core

public goods such as research and extension, which also aim to boost

productivity, are limited. Ajuonuma O.O (1999) further stated that

although improved crop varieties exist, low fertilizer use is a serious

constraint to agricultural productivity growth, averaging 10 to15

kilograms per hectare. An important factor is low and unstable

domestic production. There has been no domestic production of

fertilizer since the early 2000s, because NAFCON, the dominant

fertilizer producer in Nigeria, has been shut down. Other issues which

affect domestic supply of fertilizers include high transport costs from

port to inland destinations, poor distribution infrastructure, the

absence of capital for private sector participation in distribution,

significant business risks facing fertilizer importers, and

inconsistencies in government policies.

Low Access to Agricultural Credit

Access to agricultural credit has been positively linked to agricultural

productivity in several studies. Yet this vital input has eluded

smallholder farmers in Nigeria.

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Fakunle, J. O, and Imeh O, F (2001), opined that Banks with large loan

funds are generally difficult for smallholder farmers to access.

Problems with collateral and high interest rates appear to frequently

screen out most potential rural smallholder beneficiaries. In addition,

agricultural loans are often short-term with fixed repayment periods,

a loan structure that is not suitable for annual cropping or livestock

production.

Land Tenure Insecurity and Land Degradation

According to Dimgba F. O, (2001), an important institutional

constraint is the absence of a clear title to land. Group ownership of

land in Nigeria has been associated with such problems as limited

tenure security, restrictions on farmers’ mobility, and the inevitable

fragmentation of holdings among future heirs. Dimgba F. O, (2001)

also stated that it may also limit access to formal credit, since the

farmer cannot use land as collateral which reduces incentives to

invest in land quality maintenance or improvement. Kolawole B. F,

(1999) clearly noted that because poor farmers cannot afford

alternative farmlands, and do not have customary access to lands not

inherited, they remain on depleted lands and further degrade these

20
resources. Thus, poverty and custom may constrain farmers’ ability

and willingness to mitigate land degradation, leading to declining

productivity.

According to the Global Assessment of Soil Degradation (GLASOD),

more than one-fourth of the agricultural land in Nigeria is severely

degraded, with most of this very severely degraded, meaning major

and irreversible losses in productivity. In situations where technology

is affordable, poor knowledge may lead to over use of agrochemicals

such as fertilizers, which may precipitate environmental problems.

But of immediate concern today in Nigeria is under usage of

fertilizers as a result of high costs. Land degradation has been

manifested in soil erosion, especially the southeast zone;

desertification due to deforestation, mainly in the northeast and

northwest zones; and oil spillage, especially in the oil producing

states. In addition, shorter fallow periods, especially around

homesteads, have resulted in low soil fertility.

Low and Unstable Investment in Agricultural Research

When research is poorly funded, agricultural technologies cannot be

improved, and there will be no downstream farm income increase,

rural employment generation, reduction in food prices, establishment

21
of agro-based industries, and economic growth. In short, the absence

of new technologies in agriculture will slow the growth of agricultural

productivity and the reduction of rural poverty. (Dele Oladele, 2003,

“Agricultural blue print for rural Nigeria”)

Public research and development (R&D) spending in Nigeria has been

low and unstable since independence, and the government budget

process for funding agricultural research is complex. The time

between the submission of planned budgets by research agencies

and the approval and release of funds is lengthy and often out of

tune with research work plans. The approved amounts and the

disbursement processes very often fall far short of the planned

budgets of the research agencies. Private sector involvement in

agricultural research has remained negligible to date.

Poor Market Access and Marketing Efficiency

Agricultural marketing efficiency in Nigeria is dismally low. Transport

costs are high due to poor road conditions, limiting access to inputs,

credit, and output markets, and reducing the transmission of key

market information. (Timothy Fisayo, A, 2000)

(b). Commodity-specific Constraints

Staple Crop Constraints

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Three of the leading staple food crops in Nigeria are cassava, maize

and rice. Several improved varieties of these commodities have been

released through years of on-station and adaptive research. Most of

the varieties released, however, have multiplication problems.

Contract growers (also called outgrowers) are often denied good

prices for the resulting harvests at the end of the growing season,

which in turn discourages future farmer participation. In addition,

while many of the varieties are high yielding, they score low on other

parameters such as resistance to drought, pests, and disease; and

early maturity. On-farm costs of producing these crops are still very

high at the small scale level in Nigeria. Agrochemicals are largely

imported at prohibitive costs. Thus, fertilizers and insecticides are

rarely applied to recommended levels. (Timothy Fisayo, A, Kolade

M.O et al 2000)

Again, Timothy Fisayo, A, Kolade M.O et al (2000) stated that making

food available goes beyond increasing on-farm production to include

year-round storage and processing. Due to a combination of low

productivity and post harvest losses, year-round grain availability is

low in Nigeria. Grains in storage are partially lost to storage pests and

diseases. It has been estimated that 10 percent of the total

23
production of grains and 20 percent of the total production of tubers

are lost or wasted annually to poor or non-storage.

According to Adebimpe Lawal (1999), there are also everyday

challenges faced by the various levels of tuber and grain processing.

Medium to large scale processors face problems such as inadequate

equipment and fabricators. Okon F and Adebimpe Lawal (2001) also

insisted that this problems that cut across all processors include

unstable market conditions, unstable government trade policies and

difficulty sustaining the supply of raw materials to processors.

Livestock Production Constraints

Collins Madu (2003) in his publication “The constraints to livestock

production in Nigeria” noted that part of the constraints include

biological limitations of the indigenous breeds of animals,

unavailability of production inputs such as feed, water and good

quality pasture year-round, lack of effective veterinary services, and

unavailability of vaccines and veterinary drugs at reasonable costs.

Collins Madu (2003) further noted that non-grazing livestock depend

on compounded feeds, which are affected by seasonality and the cost

of raw feed materials. The pastoral system relies on natural

rangeland for ruminant feeding. Again he said that the expansion of

24
cropping activities has reduced available water and grazing

resources, leading in turn to conflicts among pastoralists, fishermen

and farmers.

With 90 percent of the national livestock herd under traditional

management, genetic factors seriously limit livestock productivity in

Nigeria (Ifelodun M A, 2004). He further stated that the absence of a

grandparent stock and the collapse of the livestock breeding and

multiplication programs have reduced high-quality livestock

production. Public veterinary services have declined and livestock

diseases account for 30 to 40 percent of the productivity losses.

The specific constraints in livestock marketing and processing in

Nigeria include poor packaging facilities for products in the value

chains, lack of cold storage facilities in abattoirs at wholesale and

retail markets, and the absence of standards for meat and other

livestock and poultry products.

2.2 THE CONCEPTUAL DEVELOPMENT OF RETAIL BANKING

Feringthing Kelby (2004) stated in his article “Banking and Banking

style in the twenty-first century” that in years gone by there was no

need for “retailing” in the banking industry simply because only a few

banks were in operation and competition was virtually non-existent.

25
According to Trubik and Smith, (2000), arm-chair banking was the

order of the day. The banks expected customers to come from very

distant towns and villages to patronize them. In fact the customers

were at the mercy of the banks and the latter dictated the terms and

conditions of the business. It was indeed a sellers market. The

customers had no say and the banks could afford to do whatsoever

they felt like doing. The customers then bore the brunt of whatever

the situation was no matter how harrowing, bitter or ugly their

experiences were. They had no choice. The customers who were

supposed to be king and the very purpose of the banking business

were considered secondary.

According to Hassan A. T (2001), since the introduction of the

structural adjustment Programme (SAP) on the 29th September 1986;

the story has then changed. Many banks have been issued with

operating licenses and this paved way for keen competition. The

bank customer’s tastes also increased and become varied. This

means that if a bank fails to satisfy its customers, the latter would go

and open accounts with other banks were they may gain satisfaction.

The older banks now stood the risk of loosing their customers to the

new ones.

26
According to Ajayi Ibi (1980). Competition was then accentuated in

the banking industry by the general deregulation of the economy

pursued under the Structural Adjustment Programme. In the same

view, Ogwuma Paul (1980) was of the opinion that deregulation

opened up the gates for new banks and other financial institutions

and this development then jolted the existing banks out of their deep

slumber. It dawned on them for the first time that to survive the

heightened competition, they had no alternative than to act swiftly.

They realized that for their financial services to be patronized, they

must be brought to the attention of the potential and target users for

whom they were intended. Many financial services are also offered by

some organisations such as the Bureau de Change Companies and

this mean that banks have to compete with other organization and

not just with one another in the market place. To retain their existing

customers and win more business, it became obvious that they must

adopt a positive marketing approach.

2.2.1 Service Strategy of Nigerian Retail Banks

Garland (2002) observed that retail banks usually operate on a long-

term "cradle-to-grave" customer management strategy. This means

that some customers may be regarded as being unprofitable in the

short terms but become profitable over time. Retail banks in Nigeria

27
have typically viewed their primary customers as males between 20

and 55 years old (Ojo, 1994). Usually, males are seen as the primary

wage earners and decision makers for financial planning in their

households (Bartos, 1989). As the rationale goes, these male

individuals offer the maximum profitability since they not only have

the resources but also the necessary focus on increasing their assets

(Hisrich and Ozturk, 1999).

Increased growth from sales of financial services to the male

segment has been the primary strategy of retail banks in Nigeria

(Ojo, 1994). In short, male customers have been viewed as the

golden geese of the financial service marketplace. But as Javalgi,

Belonax and Robinson (1990) remarked, while this strategy may

achieve some growth, the financial services needs of females are

usually unclear.

Finally although some of the previous findings relating to retail bank

choice are consistent with the ethos of Nigerian culture that

emphasises social and family ties there has not been a study devoted

to identifying differences in retail bank choice between male and

female customers especially in an African context.

28
 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION

According to Fadairo (1999), the analysis and interpretations of the

raw data of an investigation are the means by which the research

problem will be answered and stated hypotheses tested. Therefore,

this chapter takes a look at the different stages required to carry out

a study of this magnitude, and role of useful statistical methods of

data analysis.

These steps include, but not limited to,

• Research design; the “shape” of the design

• Data specification; kind of data collected

• Sampling and data collection techniques; the kind of sampling

carried out, and

• Data analysis method; the kind of statistical method applied

Each of the afore-mentioned stages is critical to the proper

structuring of this part of the research and will be further explained

for clarity sake.

29
3.2 RESEARCH DESIGN
Quantitative and Qualitative research was applied in this study.

These research designs focus on objective means and subjective

experience respectively. Quantitative research “allows” for data that

is collected in some objective and replicable manner: this

methodology provides greater “distance” between the data and

researcher. On the contrary, qualitative research deals with the

collection of data in subjective manner in which the research “goes”

to the subject or respondent in order to get the needed data. In both

instances data is analysed statistically.

3.3 DATA SPECIFICATION

There are about four data types usually considered in the study of

random variables (and research works). Such data are common in

engineering, Agricultural, Medical and Business practices, namely;

• HISTORIC OR CHRONOLOGIC DATA: This is the first type of

data associated with time related observations or

measurements, a case of time series data. Historic data are

subject to being lost if not observed initially.

• FIELD DATA: These are observations or surveys in space such

as water level measurements, responses to interviews or

30
 questionnaires etc. Apart from economic factors as the

limiting conditions, resurvey of field data is always possible.

• EXPERIMENTAL DATA (LABORATORY): A number of data

belong to this group which is found useful in basic and

applied research. For instance, sample soft soil from farm

lands are analysed in the lale as soil quality tests.

• SIMULTANEOUS MEASUREMENTS OF TWO OR MORE RANDOM

VARIABLES: This is a necessary requirement for developing

regression models amongst such variable.

In line with the overall objective of this study, two types of data will

be required for test of hypothesis; Chronologic data and Field data.

The chronologic data is gotten from secondary sources online, while

the field data is from the survey carried out to get input from

surveyed respondents.

3.4 SAMPLING PROCEDURE

A sample is a representative portion of a target population, whereas

Sampling refers to the process of selecting/choosing a sample. There

are basically two broad classes of sampling; Random sampling

process, and Non-random sampling process.

31
Random sampling process refers to the selection process where each

element within the population is has equal opportunity to be selected

as part of the sample. Examples are simple random sampling,

stratified random sampling and cluster sampling. Therefore, the Non-

random sampling refers to the process where the selection process is

influenced by the researcher in some form or the other, hence

leading to a bias selection.

Our study entails the use of Random sampling process/method in the

selection of sample farmers and farm owners across the three

districts of the LGA. Specifically, a kind of random sampling called

Stratified-Cluster sampling was used to select the sample. This

method requires the study population be first grouped into clusters,

and then the element within each cluster is stratified. Therefore, the

LGA was clustered on the basis of its districts; Afon, Owode, and

Orire. Thus three clusters were created. About twenty (20)

farmers/farm owners per cluster were surveyed, which implies that a

total of sixty (60) farmers/farm owners were surveyed generally.

32
3.5 METHOD OF DATA COLLECTION:

A questionnaire was designed for the purpose of this study and

serves as the main instrument of data collection. Secondary sources

were equally consulted for information on bank schemes and loans

etc.

The questionnaire administration was carried out by the researcher

and with the aid of a few research assistants. Based on the sampling

technique used in the selection process, the questionnaires were

administered to the farmers in their respective wards/districts.

All administered questionnaires were duly collected from the

respondents and later processed for data analysis.

3.6 TECHNIQUE OF DATA ANALYSIS

Our research requires that key statistical analytical tools be

employed hence core Descriptive and Inferential statistics was used

in the analysis of data related to this work in order to reach some

valid and reliable conclusion.

The data gathered was summarised using the descriptive statistics

like frequency distribution tables, percentage and relevant charts.

This was also be done by ensuring the appropriate measure(s) of

33
location and dispersion are applied. Inferential analytic tools was

employed namely regression analysis (multiple).

A regression model was developed to help determine the effect of

small and medium enterprises on poverty. The nature of our study

demands the use of multiple regression analysis. The regression

model broadly divided into two types of variables;

• Response variable i.e Dependent variable denoted as Y

• Predictors i.e Independent variables denoted as b

The procedure for determining formulas to solve multiple regression

analysis co-efficient requires that we establish the formulas to meet

an objective of minimizing the sum of squares error for the model.

Methods of calculus are applied, resulting in k+1 unknowns for

multiple regression analyses with k independent variables. For

multiple regression models with two independent variable, the result

is three simultaneous equations with three unknowns (b0, b1, and b2 )

b0n + b1∑X1 + b2∑X2 = ∑Y

b0∑X1 + b1∑X12 + b2∑X1X2 = ∑ X1Y

b0∑X2 + b1∑X1 X2 + b2∑X22 = ∑ X1Y

34
The process involved in solving these equations, mostly when k is

greater than 2 (as in our study k = 3) is tedious and time consuming

hence we employ statistical softwares.

The general model is given as

Y = b0 + b1X1 + b2X2 + b3X3

Where;

Y – Dependent variable

b0 - Constant

b1, b2,…, bn – Coefficients

X1, X2,…, Xn – Independent variables

The model was then subjected to an overall significance test by way

of Analysis of Variance (anova).

A Principal Component Analysis (PCA) was carried out on all variables

covered by the questionnaire so as to determine the most significant

variables for the regression models. This (PCA) transforms the raw

score of the variables into a covariance matrix, and later the Eigen

analysis was carried out on the covariance matrix. Also, the

coefficient of determination and adjusted coefficient of determination

were determined. These values inform us of the percentage of

35
variation in the dependent variable that the independent variables

account for.

The derived regression model will thus be subjected to test of

significance using analysis of variance (anova) to determine the level

of significance/relevance of the model.

36
 CHAPTER FOUR

4.0 DATA ANALYSIS AND PRESENTATION OF RESULTS

4.1 INTRODUCTION
The study is conceptually focussed on the impact of retail banking on

agricultural production specifically as it concerns the availability of

loans to farmers for agricultural purposes. Questionnaires were

administered to total of eighty (80) farmers in Ifelodun LGA of Kwara

state. The results are presented in three sections.

The analysis shows the background details of the farmers specifically

as regards their demographic profiles i.e age, sex, marital status,

household size etc. This was done by means of frequency distribution

tables. t-test analysis was conducted to evaluate hypotheses 1 and 2,

while a regression model was developed to determine the impact of

bank credit facilities, among others, on agricultural production.

Microsoft Excel 2007 and Statistical Package for Social Sciences

(SPSS) version 17 were used for the analyses.

37
4.2 EVALUATION OF THE PROFILE OF SURVEYED
HOUSEHOLDS

Table 4.1: Demographic profile of households surveyed

CHARACTERISTICS N PERCENTAGE
SEX
male 58 72.5
female 22 27.5
AGE
21 - 30 21 26.25
31 - 40 35 43.75
41 - 50 13 16.25
51 - 60 8 10
61 above 3 3.75
MARITAL STATUS
single 21 26.25
married 36 45
widowed 12 15
divorced 9 11.25
others 2 2.5
TYPE OF FAMILY
mono 29 36.25
poly 51 63.75
LEVEL OF EDUCATION
non formal 11 13.75
primary 32 40
secondary 26 32.5

38
CHARACTERISTICS N PERCENTAGE
tertiary 4 5
adult 7 8.75

CHARACTERISTICS N PERCENTAGE
RELIGION
Christianity 48 60
Islam 32 40
HOUSEHOLD SIZE
1-5 19 23.75
6 - 10 37 46.25
11 - 15 22 27.5
16 above 2 2.5
Source: Author’s field survey, 2009

Sex distribution

Table 4.1 reveals that 58 out of the total 80 farmers surveyed are

males, this account for about 72.5% of the total respondents, while

about 22 of the farmers surveyed are females accounting for about

27.5% of the total respondents surveyed. This could be due to the

fact that farming is regarded as an occupation requiring agility and

physical fitness; hence it’s largely dominated by males.

39
Age of Household Head

Table 4.1 reveals that about 35 of the farmers are aged 31 to 40

years, while 13 of the farmers surveyed are aged 41 to 50 years. This

accounts for 43.75% and 16.25% respectively. Also, about 8 of the

farmers are aged 51 to 60 years, accounting for about 3.75% of the

entire farmers surveyed.

Furthermore, about 21 of the farmers are aged 21 to 30 years, while

3 of the farmers are aged 61 years and above. This accounts for

about 26.25% and 3.75% respectively.

Marital Status

Results in table 4.1 indicates that 36 of the total 80 farmers are

married and they make up about 45% of the entire farmers surveyed,

while about 12 of the respondents are widowed, accounting for about

15% of the entire farmers surveyed. Also, 9 of the farmers are

divorced, thus accounting for about 11.25% of the entire farmers

surveyed.

Furthermore, 21 of the respondents are singles, while 2 of the

respondents are classified as “others”. This account for 26.25% and

2.5% respectively of the entire farmers surveyed. These figures

40
indicate that there are more married people in the farming profession

than farmers grouped in other marital status.

Type of Family

Result in table 4.1 reveals that 51 of the farmers surveyed practice

polygamy, this accounts for about 63.75%, while 29 of the farmers

practice monogamy which accounts for about 36.25% of farmers

surveyed. This simply implies that at least 6 out of every 10 farmer

practices polygamy.

Educational Status

Table 4.1 reveals that 32 of the respondents surveyed had primary

education, while about 11 of the respondents had non formal

education. This accounts for about 40% and 13.75% respectively of

the entire farmers surveyed. Also, 26 of the respondents had

secondary education, accounting for about 32.5% of farmers

surveyed. Furthermore, 4 of the farmers had tertiary education, while

7 had adult education, thus accounting for 5% and 8.75%

respectively of the entire respondents surveyed.

The various educational status highlighted in table 4.1 clearly

indicates that at least 70% of respondents had obtained basic formal

education.

41
Religion

Table 4.1 shows that 48 of the farmers surveyed profess Christianity

accounting for about 60%, while 32 of the respondents profess Islam

which accounts for about 40% of the respondents surveyed.

Household Size

Table 4.1 reveals that 37 of the farmers surveyed have about 6 to 10

members which accounts for 46.25%, while 22 of the farmers

surveyed have about 11 to 15 members which account for 27.50%.

Furthermore 19 farmers have about 1 to 5 members, while 2 of the

households have at least 16 members which accounts for 2.5% of the

farmers surveyed.

42
4.3 TEST OF HYPOTHESES.

The analysis was to determine the correlation between Agricultural

Production, and the Demographic characteristics of the respondents

(Age, Marital status, Level of Education, and Household size). The

correlation co-efficient (r) values were calculated using Karl Pearson

Product Moment Correlation analysis, while the significance level (α)

was set at 0.05. The correlation co-efficient values (r) are deemed

significant when the respective p-values (i.e probability values of the

correlation co-efficient) are less than the significance level of 0.05.

Hypothesis 1:

There is no significant relationship between the Age, Marital status,

Level of Education, and Household size of farmers, and Agricultural
production

Table 4.2: Relationship between Age, Marital status, Education level,

and Household size of farmers, and Agricultural production

Variable N R p
Age 80 0.042 0.150
Marital status 80 0.002 0.935

43
Level of
Education 80 0.037 0.200
Household size 80 -0.056 0.063
**α= 0.05
**Correlation is significant at p< 0.05 level

Agricultural production and Age

Evaluation of the relationship between Agricultural production and

Age of farmer shows a correlation co-efficient (r) of 0.042, and a p-

value of 0.150, which is not significant since p-value is greater than

0.05. This implies that there is no significant relationship between

Agricultural production and Age of farmer.

Agricultural production and Marital Status

According to table 4.2, the relationship between Agricultural

production and the marital status of farmers shows a correlation co-

efficient (r) of 0.002, with a p-value of 0.935, which is not significant

since p-value is greater than 0.05. This implies that there is no

significant relationship between Agricultural production and the

marital status of farmers.

Agricultural production and Level of Education

44
According to table 4.2, the relationship between Agricultural

production and the level of education of farmers shows a correlation

co-efficient (r) of 0.037, with a p-value of 0.200, which is not

significant since p-value is greater than 0.05. This implies that there

is no significant relationship between Agricultural production and the

level of education of farmers.

Agricultural production and Household size

An examination of table 4.2, the relationship between Agricultural

production and the household size of farmers shows a correlation co-

efficient (r) of -0.056, with a p-value of 0.063, which is not significant

since p-value is greater than 0.05. This implies that there is no

significant relationship between the behavioural pattern of

adolescents and outburst of anger at-risk behavior.

45
Hypothesis 2:

There is no significant difference in agricultural production output

between bank credit facilities and other sources of credit facilities

Table 4.3: t-test analysis on difference in agricultural production

output based on bank credit facilities and other sources of credit
facilities

Primary sources of
credit N Mean df t p value

Bank 21 5880 78 -0.291 0.707

Other sources 59 5940
*significant at p < 0.05, where α = 0.05

The t-test analysis for the difference in agricultural production output

between bank credit facilities and other sources of credit facilities

reveals a mean score of 5880 for farmers having bank credit

facilities, and 5940 for farmers having other sources of credit

facilities. The analysis yielded t-value of -0.29 at 78 degrees of

freedom which was deemed not significant at p=0.77, hence

hypothesis 1 is not rejected. This implies that there is no significant

difference in agricultural production output between bank credit

facilities and other sources of credit facilities.

46
This further implies that credit facilities issued by the banks, and that

issued through other sources have similar effect on the output of

farmers. This could be due to the fact that there could be other

factors responsible for variance in agricultural production beyond

availability of credit facilities.

4.4 EVALUATION OF THE IMPACT OF SMEs ON POVERTY.

This section critically looks at the impact of Bank credit facilities (and

other sources of credit facility), employment density (measured in

proxy as number of employees), and selected demographic variables

(such as marital status, household size, level of education, and age)

on Agricultural productivity. To this end, a regression model was

developed using the following variables;

• Bank credit facility – denoted as BNK

• Other sources of credit facilities – denoted as OTR

• Employment density– denoted as EMP

• Age– denoted as AGE

• Education– denoted as EDU

• Marital status– denoted as MST

• Household size– denoted as HSZ

The result of the analysis follows;

47
Table 4.4 : Multiple regression coefficients for impact of SMEs on
Poverty

Predictor Coefficient SE t p
Coefficient
Constant 1.5443 0.118 2.63 0.000
(b0)
AGE 0.087 0.018 -1.12 0.082
OTR 0.952 0.021 3.44 0.024
BNK 1.042 0.017 4.76 0.001
EMP 0.714 0.022 2.44 0.016
MST -0.159 0.025 -1.19 0.132
HSZ -0.177 0.025 -1.16 0.219
EDU 0.091 0.041 1.09 0.226
S = 0.3385 R-Sq = 61.1% R-Sq (adj) = 56.4%

Table 4.4 shows the coefficient of each explanatory variable and their

respective significance in the model.

Each variable is subjected to a test of significance to determine if it’s

suitable for the model, hence the following hypothesis;

H0: bi=0 (the co-efficient is not significantly different from zero)

Ha: bi≠0 (the co-efficient is significantly different from zero)

48
The calculated t and P values respectively show that at an alpha level

of 0.05 (level of significance), the co-efficient of OTR, BNK and EMP

are significantly different from zero; while the co-efficient of AGE,

MST, EDU and HSZ are not significantly different from zero.

The value of the co-efficient tells us of the level of impact made to

agricultural production by each respective variable. This implies that

for every increase in BNK (bank credit facility) the amount in

agricultural production will be positively affected by a factor of 1.042,

while for every increase in OTR (other sources of credit facility) the

amount in agricultural production will be positively affected by a

factor of 0.952. Again, for every increase in EMP (employment

density) the amount in agricultural production will be positively

affected by a factor of 0.714.

This signifies that agricultural production will be positively affected

by bank credit facility (BNK), other sources of credit facility (OTR),

and the employment density (EMP) i.e number of employee. Hence,

these variables have will greatly influence agricultural activities

provided they are available to farmers.

The other variables do not make any significant impact on

agricultural production, this is shown by their t and p values

49
respectively. Thus, agricultural production will not be

impacted/effected by these selected demographic variables – Age,

Marital status, Household size, and Level of Education.

Lastly, the R-sq (adj) value reveals that about 56.4% of the variation

in agricultural production is accounted for/ influenced by bank credit

facility (BNK), other sources of credit facility (OTR), and the

employment density (EMP).

Based on table 4.4, the regression model is stated as:

Agricultural production = 1.54 + 1.04 BNK + 0.71 EMP + 0.950 OTR

The overall significance of the model was tested using analysis of

variance (ANOVA), thus the following hypothesis;

H0: b1= b2 = b3 =0 (the model is not significant)

Ha: at least one of the coefficients is not equal to zero (the model is

significant)

Table 4.5: ANOVA output for multiple regression model

Source DF SS MS F P
Model 7 18.57 2.65 2.574 0.048
Residu
al 72 74.21 1.03

50
Total 79 17.78
α = 0.05

Table 4.5 shows the regression yielded an F-value of 2.574, and p

value of 0.048 which is significant since p<0.05, thus the null

hypothesis is rejected. Therefore the model is significant. This implies

that the model developed is fit for determining agricultural

production.

51
4.5 SUMMARY OF FINDINGS
The results, as presented in tables 1 and 2 above, indicated the

following;

That about 72.5% of the farmers are male, while about 27.5% of the

farmers are females-which is likely due to their tedious nature of

farming

Farmers aged 31 to 40 years account for 43.75%, while farmers aged

41 to 50 years account for about 16.25% of those surveyed. Also

farmers aged 61 years and above account for 3%

Married farmers make up about 45%, while farmers that are single

account for about 26.25% of the entire households surveyed

Farmers practicing polygamy account for 63.75%, while farmers

practicing monogamy account for about 36.25% of the entire farmers

surveyed

Also, about 40% of farmers obtained only a primary education,

13.75% obtained non-formal education, while about 5% obtained

tertiary education

52
Farmers professing Christianity account for about 60%, while about

40% profess Islam.

46.25% of farmers have about 6 to 10 members in their household,

while 2.5% of the farmers have at least 16 members in their

household.

Also, the model developed indicated that employment density

(measured in proxy as number of employees), productivity

(measured in proxy as monthly turn-over), and level of education had

significant impact on poverty. Each of these variables impact/affect

poverty by a factor of 0.95, 1.04, and 0.71 respectively per unit

increase.

53
 CHAPTER FIVE

5.0 SUMMARY, CONCLUSSION, AND RECOMMENDATION

5.1 SUMMARY
This study primarily evaluated the basic characteristics of sampled

households and SMEs in Asa local government area of kwara state.

And also a regression model depicting the impact of employment

density (measured in proxy as number of employees), productivity

(measured in proxy as monthly turnover), and other demographic

variables on poverty was developed.

Availability of credit has been identified as a major constraint to

agricultural development in peasant economies. Small-scale farmers

dominate the agricultural sectors of these countries. Whilst there are

often considerable opportunities to increase production and farm

incomes by adopting new technology this potential can only be

realized if farmers can gain access to funds to finance the additional

inputs that are invariably required.

This study was deemed to be of significant importance to economic

technocrats, policy makers, and the nation at large since it will create

54
awareness on the need to take further advantages of banking

programs/schemes available in the country; bring to consciousness

the existing potential in the agricultural sector of our nation and also

how it can boost economic growth; and assist policy makers,

executives and other practitioners in the industry to monitor,

evaluate and adjust to the on-going trends in the agricultural sector.

The study also identified some existing constraints to Agricultural

Productivity in the following aspects;

(a) Sector-wide Constraints: Poor Agricultural Pricing and Low

Fertilizer Use, Low Access to Agricultural Credit, Land Tenure

Insecurity and Land Degradation, Low and Unstable

Investment in Agricultural Research, Poor Market Access and

Marketing Efficiency

(b) Commodity-specific Constraints: Staple Crop Constraints,

Livestock Production Constraints

55
5.2 CONCLUSION
In Nigeria, it has been shown that agriculture is the dominant

economic activity in term of employment and linkages with the rest

of the economy. About 75% of Nigeria land is arable of which about

40% is cultivated. It is because of the importance of agriculture as

well as the fact that significant improvement in rural welfare depends

upon its development that the governments (Federal, State and

Local) over the years have pursued policies and programmes aimed

at the expansion and modernization of agriculture. These

programmes and policies all have the bottom line of trying to unlock

the agricultural and rural development potentials by enhancing the

capacity of the rural dwellers, making agriculture more profitable,

providing infrastructural facilities and hereby raising the rural people

standard of living.

Therefore, it is important to note that though agriculture has not

made the desired impact on the Nigerian economy in spite of all the

efforts and supports of succeeding administrations and governments

gives a cause for concern. This underscores the fact that there exist

56
fundamental issues or problems which confront farmers and

stakeholders which hitherto have either not been addressed at all or

have not been tackled wholesomely.

Owing to the above, Obadan (1997) opines that the main factors that

cause low agricultural output include; inadequate access to credit

facilities, inadequate physical assets such as land and capital and

minimal access by the poor to credit even on a small scale,

inadequate access to markets (where the poor can sell goods and

services), and low endowment of human capital

It is also worthy of note that, according to Pandey,(2000 ), there is no

single ideal way to financing agricultural enterprises, each business

has individual circumstances which makes its requirement unique;

the markets in which it operates, its age and the stage of its life cycle

which it has reached, its ownership, rate at which its owners hush to

expand etc. He further identified two main channels that have been

used as credit for agricultural enterprises as Formal and Informal

sources. He identified the formal sources to include commercial

banks, merchant banks, saving, banks insurance companies, and

development banks, also government loan agencies and cooperative

credit societies. Also, the informal sources were identified as Owners

57
savings, Retained earnings, Friends and relations, Clubs, ‘Esusu’ and

Money-lenders among others.

Obitayo (1991) noted that some of the major problems affecting

agricultural production stem from their nature and characteristics. He

identified some of these problems as uneven competition arising

from import tariffs which at times favour imported finished product,

lack of access to appropriate technology, weak demand for products

arising from low and dwindling consumers purchasing power

aggravated by lack of patronage of locally produced goods by the

general public as well as those in authority.

Obitayo (1991) further opined that absence of long term finance to

fund capital assets and equipment under project finance for agro-

firms could equally hamper agricultural production

Finally, Biggs and Shah (1998), using panel data from enterprise

surveys in five countries in Sub-Saharan Africa, report that large

agro-firms (>100 employees) over a three year period in the early

1990s emerged as the dominant source of net job creation. These

agro firms contributed about 56 percent of net job creation in Ghana,

74 percent in Kenya, 76 percent in Zimbabwe, and 66 percent in

Tanzania.

58
5.3 RECOMMENDATION
Based on findings and the conclusions reached on the issues raised

by this study, the following are the recommendations of the

researcher;

1. There arises a cogent need for measures that’ll lead to

mobilizing and allocating financial resources to farmers. This will

further boost the agro-firms in building and consolidation

process. The government’s efforts should also be geared

towards improving the enabling environment, which will help to

reduce agency problems and transaction costs and mitigate

problems of access.

2. Furthermore, agro-firms will have to figure out different kinds of

strategies and structures, and develop core technical

capabilities to respond appropriately to the new market and

institutional conditions they face. The need to readjust in the

areas of Financial capital flow, Strategy, Core technical

capabilities will involve considerable cost to the agro-firm and

requires access to an array of “dynamic learning mechanisms,”

59
 which facilitate and shape the evolution of strategies, structure,

and capabilities (Teece, and Shuen 1990; Nelson 1991).

3. Government at all levels should create an enabling “financial

environment” that’ll help facilitate availability of credit facilities.

Some instances could be the formulation of policies that

guarantee easy access to loans/credit facilities from banks and

other formal sources of funding. Equally of importance in such

policies will be the need to put in place measures that’ll

guarantee the security of such loans given out to farmers/agro-

firms. This stems from complaints by banks/other formal sources

of funding that loans advanced to the farmers are usually not

returned as at when due, and in most instances, the repayment

periods actually drag.

4. Finally, the need to put in place a fair competitive market

environment that encourage locally produced crops. This has

been a major concern for the farmers since they are faced with

uneven competition arising from import tariffs which at times

favour imported finished product, and therefore leads to

dwindling consumers purchasing power aggravated by lack of

patronage of locally produced goods by the general public as

well as those in authority.

60
61