What is it about?
In this study, we explored the impacts of having access to agricultural loans on cassava processing income. Our study attempted to eliminate research biases due to endogeneity and heterogeneity using a switching model to establish the determinants of having access to agric. Loan, as well as the impacts of agric. loan on the farm income of cassava processors with the aim of finding out whether the agricultural loan is effective in boosting the net income of cassava processing in the study area or not.
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Why is it important?
Inadequate access to agricultural loan has been identified as one of the critical vices against the development of cassava processing industry in Nigeria. However it is believed that having access to loan resources does not necessarily result in a better farm performance especially in cassava processing. Our study then want ahead to establish that having access to agricultural loan aids debt financing and improves farm income among cassava processors.
Perspectives
This study considered the decision to access a loan portfolio independent of the outcome of loan access. Admittedly, we treated access to loans as a non-random process, where the non-random biases associated with loan access and the possible heterogeneous interferences that make it almost impossible to isolate loan impact (incremental benefit or loss) on cassava income were addressed. We also explored a counterfactual approach to isolating the possible impacts of the financial stimulus on farm performance using endogenous switching regression and discovered that the impacts of the agricultural loans vary across age groups and are complementary to processing firm size.
Olabisi Damilola Omodara
Obafemi Awolowo University
Read the Original
This page is a summary of: The nexus between agricultural loan access and farm income of small-scale cassava processors in Oyo state, Nigeria: An endogenous switching regression approach, Journal of Agricultural Sciences Belgrade, January 2022, National Library of Serbia,
DOI: 10.2298/jas2201083o.
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