Effect of agricultural credit on the output and profitability of egg farms in Abia State, Nigeria

Abstract

The study examined the effects of agricultural credit on the output and profitability of egg/arms in Abia State, Nigeria. Primary data were collected with structured questionnaire during the 2004 production season from a total of 120 egg farmers selected using purposive random sampling technique with which the production, profit and cost functions were estimated using the Ordinary Least Squares (OLS) regression technique. Results show that total quantity of feed, farm size and cost of drugs positively and significantly influenced egg output at 1%, 1% and 5% levels respectively. Results of the profit function reveals that total output of eggs, agricultural credit and average price of eggs per crate had positive and significant effects on profit at 1%, 5% and 5% levels respectively. Sufficient evidence exists to suggest that productivity level differ across farms with and those without access to credit. This study recommends increased incentives to farmers in form of credit facilities. Farmers should be encouraged to belong to organized farmer groups such as Co-operatives.