Abstract:
This research was designed to study the effect of credit acquisition and repayment on Agricultural production in Cross River State. The major objective is to study the effect of credit acquisition and repayment on agricultural production in the state. Specific objectives included: determination of credit disbursement and recovery strategies of agricultural credit institutions, determining and comparing agricultural production among beneficiaries and non-beneficiaries of credit schemes, identifying factors that affect credit acquisition and repayment and to compare agricultural production among credit defaulters and non-defaulters. The analysis was done with sample drawn from 120 farmers, 60 beneficiaries and 60 non-beneficiaries and credit officers in Cross River State, by the use of a multistage sampling technique and structured questionnaire, which felicitated information on farmers credit use, repayment rate, agricultural production of credit beneficiaries and non-beneficiaries, credits administration etc. Analytical tools used were descriptive statistics such as percentages, mean, frequencies, etc. to show the socio economic factors influencing credit acquisition and repayment in the state, multiple regression analysis was used to estimate the production function of both credit beneficiaries and non-beneficiaries and the chow test to determine the magnitude of the coefficient obtained from the two samples. Cassava was used for the analysis of the production output of beneficiaries and non beneficiaries of credit because it is cultivated in the 3 agricultural zones and a staple food of the people. The mean output of the crop for both farmers taken from 3ha of land is 1520kg and 967.50kg respectively. The chow test result was 8.920 showing that the marginal effects of the regressors on the regressants vary. Findings showed that agricultural production is still of minimal output. Among other factors, the socio-economic characteristics of credit beneficiaries influence rate of repayment and for non-beneficiaries influence the acquisition of credit.The study recommended among others that credit should be released to farmers during planting or stocking, Credit officers should reduce bureaucratic processes to encourage farmers to borrow credit and my key recommendations based on the study were:
- Reduction of interest rate to at most 5 percent to get more farmers to borrow.
Long gestation periods of up to two years should be given to allow the farmers prepare for repayment. Increase in the credit amount because of the inflationary era we are into.
