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IMPACT OF AGRICULTURAL CREDIT GUARANTEE SCHEME FUND ON AGRICULTURAL PRODUCTION IN NIGERIA, 1978-2011
This study was intended to examine the impact of agricultural credit guarantee scheme fund on agricultural production in Nigeria. This study was guided by the following objectives; to determine the impact of credit from Agricultural Credit Guarantee Scheme on agricultural production in Nigeria, to evaluate the extent to which ACGSF has impacted the output of the crop subsector of the agricultural sector in Nigeria, to evaluate the extent to which ACGSF has impacted the output of the livestock subsector of the agricultural sector in Nigeria, to evaluate the extent to which ACGSF has impacted the output of the forestry subsector of the agricultural sector in Nigeria, to evaluate the extent to which ACGSF has impacted the output of the fishery subsector of the agricultural sector in Nigeria and to articulate the policy implications of findings and to recommend possible intervention that could help in improving the scheme’s effectiveness. The study employed the descriptive and explanatory design; questionnaires in addition to library research were applied in order to collect data. Primary and secondary data sources were used and data was analyzed using the chi square statistical tool at 5% level of significance which was presented in frequency tables and percentage. The respondents under the study were 100 residents in Abuja metropolis, FCT, Nigeria. The study findings revealed that majority of the respondents were of the opinion that Credit provided under the Agricultural Credit Guarantee Scheme Fund, (ACGSF) have a significant positive impact on agricultural production in Nigeria; based on the findings from the study, Government should invest more in Crop production and livestock in other to diversify the earnings of the economy and eliminate her dependency on other nations.
1.1 Background of the Study
Agriculture represents one of the most important sectors of the Nigerian economy. It is particularly important with regards to its employment generation and contribution to gross domestic product (GDP) and export revenue earnings. Regardless of its rich agricultural resource endowment, however, the agricultural sector in Nigeria has recorded very low growth rate. Less than 50% of the country’s cultivable agricultural land is under cultivation. In addition to this, smallholder and traditional farmers who use undeveloped production techniques, with resultant low yields, cultivate most of this land (Manyong, et. al., 2015). The smallholder farmers are limited by various constraints among which access to credit according to Olomola (2010) is a major militating factor, against agricultural production and development in Nigeria. Problems associated with obtaining credit have been corroborated by different authors (Nto and Mbanasor, 2014; Olaitan, 2015; Okorie, 2014; Henri-Ukoha, et. al., 2011).
Credit delivery to the agricultural sector has been recognized as a major input in the growth of the sector in Nigeria. The decline in the contribution of the sector to the Nigerian economy has been blamed on the lack of a formal national credit policy and paucity of credit institutions, which can be beneficial to farmers and small and new business operators engaged in agriculture and agro-allied businesses (Rahji, et. al., 2010). In Nigeria, credit has been recognized as an essential tool for promoting Small and Medium Enterprises (SMEs). About 70 percent of the population is engaged in the informal sector or in agricultural production. The federal and state governments in Nigeria have recognized that for sustainable growth and development, the financial empowerment of the rural areas is vital, being the repository of the predominantly poor in the society and particularly the small and medium enterprises (SMEs). If this growth strategy is adopted and the latent entrepreneurial capabilities of this large segment of the people is sufficiently stimulated and sustained then positive multipliers will be felt throughout the economy (Olaitan, 2016; Olowu, 2011).
The Federal Government of Nigeria has severally instituted various agricultural financing policies through schemes, programmes and institutions, aimed at improving agricultural production capabilities, positively channel the potential of SMEs to alleviate the standard of living and pla