Effect of Agricultural Credit on Small Scale Rice Farmers in Southern Taraba State, Nigeria

This study determined the effect of agricultural credit on small scale rice farmers in Southern Taraba State, Nigeria. The specific objectives of the study were to describe the socio – economic characteristics of small-scale rice farmers in the study area, identify the credit sources available in the study area, determine the influence of agricultural credit among small-scale rice producers and to identify constraints faced by small-scale rice farmers with regard to credit in the study area. Data were collected from a sample of 139 rice farmers selected through multi-stage sampling procedure using questionnaire and analyzed using simple descriptive statistics and regression analysis. Results revealed that 76% of the respondents were male, 67% were married. The mean household size, farm size and age were 50%, 37% and 30% respectively. Most (81%) of the respondents had one form of formal education or another and family land (48%) was the dominant. Informal credit sources were the majority (75%). The results also indicated thrift and credit (25%) and friends/relatives were the dominated sources of credit among the small-scale farmers. The regression analysis results indicated that farm size, fertilizer, quality of seed, amount of loan and marital status were positive and statistically significant at 5% level of significance, while family labour was positive and statistically significant at 1% level of significance. This implies that increase in these variables lead to increase in the output of rice production all things being equal. The coefficient of determination R2 was 0.77 which implies that 77% of the variations in the rice output were explained by the explanatory variables. This indicates that credit has a great positive effect on small – scale farmers or rural farmers as most farmers invested or used the agricultural loans they procured on agricultural production activities. Therefore, Commercial banks and other credit institutions should improve upon their loan procedures, so as to grasp more farmers to have access to their credit sources and loan should be disbursed to farmers with minimum delay will enable farmers meet their farm needs in the right season and increase in their farm output.