Credit Use and Production Efficiency of Cocoa Farms in Ondo State, Nigeria

A. Oladapo, A. M. Shittu, M. U. Agbonlahor and O. E. Fapojuwo

Nigerian Journal of Agricultural Economics, 2012, vol. 03, issue 01

Abstract: This study analyzed the pattern of access/use of credits by cocoa farmers in Ondo State and its effect on technical efficiency in cocoa production. The study was based on primary data obtained by interviewing a cross-section of 183 randomly selected cocoa farms. These were drawn in a multi-stage sampling process that covered the five dominant cocoa producing Local Government Areas (LGAs) of Ondo State Nigeria, namely: Idanre, Ondo West, Odigbo, Owo, and Akure South. The data were analyzed using descriptive and stochastic frontier methods. The study found that most (95.1%) of the cocoa farms were operated by males, with a mean age of 49.8years. Majority (66.7%) had no more than primary school education. Only 58.5% of the cocoa farmers used credit during the 2009/2010 production season. The mean amount procured during the production season was N66, 259.02. These were procured mostly (83.2%) from produce merchants. Increase in credit use was revealed to be associated with significant (p<0.05) reduction in technical inefficiency among the cocoa farms. Hence, the study recommended that government and other stakeholders should support enhanced credit delivery, most especially through the produce merchant system in the study area.

Keywords: Agricultural Finance; Production Economics; Productivity Analysis (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ags:naaenj:267882

DOI: 10.22004/ag.econ.267882

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