Analysis of the effect of credit on the crop output of rice farmers in Benue State, Nigeria

The study was conducted to analyze the effect of credit on crop output of rice farmers in Benue state, Nigeria. Random and stratified sampling method was used to select 236 respondents in the study area. Out of the selected respondents only 208 responded and submitted the administered well-structured questionnaires correctly. Therefore, the study was based on 208 primary data collected from registered Savings and Credit Cooperative (SACCO) members in the three Local Government Areas of Benue State. In this study the year 2011 was used for before credit was obtained and 2015 for after credit was obtained. Descriptive statistics Foster –Greer –Thorbecke (FGT) poverty measure and double difference estimator was used to analyze the data collected. The analysis showed that 60.2 % and 67.5% which is majority are male beneficiaries and non-beneficiaries of credit respectively. The active age of the rice farmers were 31-40years and 41-50years for beneficiaries and non-beneficiaries respectively. The result from poverty severity index showed that 3% of the beneficiaries constitute the poorest after obtaining credit and 5% of the non-beneficiaries constitute the poorest also in the same year 2015. The result of the double difference estimate showed that the SACCO credit had a positive effect on the crop output of the beneficiaries of the credit with crop output mean value of 1176.84kg. SACCO executives and the Government should develop strategies that will bring in more funding, loans and grants to the cooperative consequently enhance availability of credit to members. This will help members who are smallholder farmers to become big estate farm holders. It is also possible that more credit availability to members is a key to poverty reduction due to its positive effect on the crop output as seen in the study.