Rural Credit Use and Comparative Allocative Efficiency among Yam Based Farmers in Abia State, Nigeria
- *Corresponding Author:
- KC Obike
Department of Agricultural Economics and Extension Abia State University Uturu, Umuahia Campus,P.M.B 7010, Umuahia, Abia State, Nigeria
Received: 09 January 2013 Revised: 12/04/2013 Accepted: 14 April 2013
This study evaluated the Rural Credit use and comparative Allocative Efficiency among Yam based farmers in Abia state, Nigeria. Cost route approach using two sets of structured questionnaires were administered to a purposively sampled 120 yam based farmers (six credit users and six non credit users from ten major yam producing villages in the state) constituting 60 credit users and 60 non credit users. Data analysis consisted of statistical and econometric tools. The result revealed that farmers within the age range of 46- 74 and above were engage in yam production in the area of study with majority (80.0%) of the non credit users and (80.0%) credit user. A good number (86% for non credit users and 83% for credit users) of them had formal education with large household size of 5 – 15 family members. The two groups of farmers operated under the same existing technology; both farmers were factor biased or non – neutral in their production function i.e the two groups of farmers differ significantly in more than one slope coefficient. Credit users were found to use labour intensively in line with apriori expectations. For Allocative efficiency , the linear form fitted the data (R2 = 0.66) for credit users, the value of output of credit users were significantly influenced by labour, farm size and other production inputs, while farm size, value of fertilizer and depreciated asset were significant at 5% probability level for non credit users. A comparative Allocative efficiency revealed that both groups of farmers may not have achieved optimum or absolute Allocative efficiency in their production period. It is therefore important that government agricultural policy should encourage the increase of credit supply to yam base farmers to encourage yam production in the state.