Credit Constraint and Technical Efficiency of Smallholder Cassava Farmers in Osun State, Nigeria

Abstract

This study investigated the effect of credit constraint on technical efficiency of smallholder cassava farmers in Osun State, Nigeria. A structured questionnaire was used to collect primary data from 200 smallholder cassava farmers using a multi-stage sampling procedure. Data collected were analysed using descriptive statistics and stochastic frontier model. Results from the descriptive statistics showed that majority (81%) of the cassava farmers were male with the mean age of 44.1 (±14.9) years. About 86% of the respondents were married with mean household size of 6.9 (±3.5) persons. The results further revealed that 65% of the farmers were credit constrained. Results obtained from the stochastic frontier model showed that smallholder cassava farmers had an average technical efficiency of 73.6% in cassava production. The empirical results from the frontier model showed that man-day of labour significantly influence the technical efficiency of smallholder cassava farmers in Osun State. However, access to credit, amount of credit constrained and years of education were the major sources of technical inefficiencies among smallholder cassava farmers. The study concluded that majority of smallholder cassava farmers were credit constrained, as the amount of credit they received is not sufficient for their production which subsequently affected their technical efficiency. It was recommended that organizations giving agricultural credits to cassava farmers should enhance their credit services. This will assist smallholder cassava farmers to improve their technical efficiency.