CHAPTER ONE INTRODUCTION
- Background to the study
Agriculture remains the bedrock of the Nigerian economy. It is the critical sector, capable of providing solutions to the socio-economic crisis and hunger that constitute the major bane in the country’s economic progress. This is through the provision of food, employment for labour force, income generation and supply of arable and cash crops, woods and timbres, livestock and fisheries (Esobhawan, et al 2013). Despite its decline in the 1970s, which many policy analysts attributed to the sector’s neglect, following the discovery of petroleum, agriculture still provides employment for 70% of the nation’s population, foreign exchange for the country and raw materials for the industries.
The agricultural sector has a multiplier effect on any nation’s socio-economic and industrial fabric because of its multifunctional nature. The performance of the sector is also important in the country’s food security and poverty alleviation efforts, since majority of the poor are located in the rural areas and depend directly on agriculture and its related economic activities for their means of livelihood (Olukoya, 2003).
Rural areas in Nigeria are characterized by small scale farmers that are poor. Increase in rural poverty is attributed to low agricultural productivity. Rural farmers’ returns on their efforts are constrained by a number of factors, including inadequate capital. Buttressing this, Esobhawan and Alabi (2011) opined that farming production business in Nigeria is characterized by small- scale farm holders with fragmented farm holdings, rudimentary farming system, low capitalization and low yield per hectare. They further added that small farm holders constituted about 80% of the farming population in Nigeria. Obasi and Agu (2000) stated that about 70% of Nigeria’s population are involved in agriculture, while 90% of the total food production are from small farms with 60% of the populace earning their living from these farms (Oluwatayo et al, 2008).
The agricultural sector serves as market for products of the non-farm sector as well as major contributor to the nation’s Gross Domestic Product (GDP) but small-scale farmers play a dominant role in this contribution. However, their productivity and growth are hindered by limited access to credit facilities (Rahji and Fokayode, 2009; Odomenem and Obinne, 2010). Despite its importance, Fakayode, et al (2008), stated that agriculture in Nigeria is still faced with
numerous problems such as inadequate funding, non-availability of inputs in the right quantity and quality, underdeveloped marketing system and inadequate infrastructural facilities for production which in turn warrants farmers’ need for credit. Inadequate flow of funds (credit) into agriculture has been identified as the most limiting problem to increasing agricultural production in Nigeria (Okorie, 1998). This has resulted in slow development in the sector with attendant increase in food import (Enoma, 2010; Adetiloye, 2012). Also, Yunus (2000) revealed that micro-credit has proved to be an effective and popular measure in the ongoing struggle against poverty, enabling those without access to lending institutions, to borrow at bank rates to start business. According to him, on the average, developing countries have fewer than 20 bank branches per 100,000 adults, and people deposit money at the rate of one-third of what obtains in developed countries. This lack of formal financial services, along with many other factors, have inhibited farmers and other entrepreneurs, particularly in rural areas, from increasing savings, capital formation and investments, with consequent reduction in household consumption. Financial services could help farmers to accumulate funds to purchase input such as fertilizer which are helpful for increasing the production of food crops such as yam, cassava, rice, maize, cocoyam etc.
According to IITA (2009), the crop cassava, manihot esculenta, a woody shrub of the Euphorbiaceae (spurge) family, a native of South America, is extensively cultivated as an annual crop in tropical and subtropical regions of the world. It stated that cassava is the third largest source of food carbohydrates in the tropics, after rice and maize. Similarly, it has been proved that cassava is a major staple food in the developing world, providing a basic diet for over half a billion people. IITA, in its extensive research work has documented that cassava is also one of the most drought