IMPACT OF CREDIT ON ASSET ACCUMULATION AMONG POULTRY FARMERS IN SOUTHWESTERN NIGERIA

Abstract

Maintaining consistent production level during adverse circumstances (such as disease and fire outbreaks) has been a challenge to most poultry farmers in Southwestern Nigeria, leading to reduced output and income. Credit use helps to transform opportunities and increase capacity for accumulating assets which could be converted during such adverse periods to meet household and production needs. Studies on the relationship between credit and asset accumulation are limited. Therefore, the impact of credit on poultry farmers’ asset accumulation in Southwestern Nigeria was investigated. A three-stage sampling procedure was used. Oyo and Ogun States were selected based on prevalence of poultry production. Six and four Local Government Areas were proportionately selected from Oyo and Ogun, respectively. A total of 550 poultry farmers comprising 330 from Oyo and 220 from Ogun were randomly selected. Data were collected with the aid of questionnaire on farmers’ socio-economic characteristics (age, sex, marital status, household size, educational level, years of experience), production enterprise (Egg Only- EO, Meat Only- MO, egg and meat), labour type (Family Only- FO, Hired Only- HO, family and hired) and association membership. Information on farming mode: full or part-time; Flock Size (FS); Account Relationship with Financial Institutions (ARFI) and Credit Users (CU) were also collected. Asset accumulation was disaggregated into household and productive assets. Data were analysed using descriptive analysis, double hurdle regression, Foster, Greer and Thorbecke poverty index and propensity score matching at α0.05. Age, household size and farming experience were 43.7±10.4 years, 5±1.94 persons and 8.2±6.7 years, respectively. Ninety percent were male, 90.9% married, 53.6% were engaged full-time, 51.7% had tertiary education, while 57.0% were members of the association. Credit Users (CU) were 25.7% and the average amount of credit received was ₦831,000.0 per annum. The EO producers were more among CU (73.2%) than the Non-Credit Users (NCU) with 71.6%, HO labour was higher among CU (25.4%) than NCU (18.5%) and ARFI was also higher for CU (90.6%) than NCU (59.0%). Asset accumulation of CU (₦6,490,744.0) was significantly higher than NCU (₦2,468,466.6). Household asset accumulation was ₦4,051,528.0 for CU and ₦1,920,570.0 for NCU. Productive asset accumulation was ₦2,439,216.0 for CU and ₦547,896.6 for NCU. Credit was increased by vocational training (β=0.5318), being married (β=0.6037) and ARFI (β=1.3296) but reduced by FS (β= -5.11E-06). Amount received as credit was determined by per capita asset value (β=6.39E-09), ARFI (β= -0.0542), EO (β= -0.0892), MO (β= -0.0711), HO labour (β= -0.0621) and part-time farming (β=0.0471). Household asset poverty (HAP) line was ₦339,960.75 per annum, Asset Poor (AP) farmers were higher for NCU (81.0%) than CU (55.0%), poverty severity (PS) was higher for NCU (63.0%) than CU (35.0%). Productive asset poverty line was ₦137,476.22 per annum, AP farmers were higher for NCU (69.0%) than CU (55.0%), PS was lesser for NCU (45.5%) than CU (46.1%). The impact of credit on asset value of CU was ₦3,982,443.0 and ₦1,751,858.0 for household and productive assets, respectively. Credit improved the asset accumulation of poultry farmers in Southwestern Nigeria, especially for household assets