ABSTRACT
One cannot be in doubt that Nigeria government have embarked on good credit policies to ensure availability and accessibility of credit to enhance rural farming, such as rural banking programme, micro finance banks, agricultural credit guarantee scheme and Nigeria agricultural co-operative and rural development bank. However, the effect of these credit programmes among maize farmers and impact on production has given little research attention. Thisstudy examinedthe effect of agricultural credit on maize production in Ovia North East Local Government Area, Edo State, Nigeria. The specific objectives were to describe the socio-economic characteristics of farmers in the study area; identify the sources of credit available to maize farmers in the study area; estimate the volume of credit obtained by the farmers in the study area; estimate the cost and returns accrued to maize production; determine the effect of agricultural credit on farm size, yield, revenue and profit among maize farmers; identify the determinants of profit in maize production in the study area and identify the constrains encountered by maize farmers in accessing credit facilities for maize production.A two stage sampling procedure which combined purposive and simple random sampling techniques was employed to select 70 maize farmers for the study. Data were collectedwith the use of structured questionnaire. Descriptive statistics, budgetary technique, multiple regression analysis and t-test were employed in analyzing data for the study. The results revealed that the sources of credit to the respondents were Commercial banks, Rural banks, development banks Micro finance bank, cooperatives, farmers group, friends and relatives. The highest volume of credit received was from development bank and the average amount received from development bank was ₦150,000. The total revenue from maize production before access to credit facilities per hectare was ₦393100.79 and a gross margin of ₦131485.17 with profit of ₦70377.34/ha was generated.Total revenue from maize production after access to credit facilities per hectare was ₦596620.66, gross margin was₦220,859.35 and the net profit was ₦75811.10/ha.There was a significant difference (p = 0.00, t = -4.92) between farm size, revenue hand yield before and after access to credit. Cost of hired labour and cost of herbicide positively affected profit before access to credit. (p = 0.001; t = 3.459 andp = 0.000; t = 4.355respectively). While cost of herbicide was the only significant variable affecting profit after access to agricultural credit. It is thusconcluded that credit brought about higher productivity and profit in maize production. Hence, the studyrecommended that existing banks should be encouraged to have more rural outlets, while there should be federalgovernment policy of empowering rural farmers to have access to more agricultural inputs such as seeds and herbicides at subsidised rate.
