1.1 BACKGROUND OF THE STUDY
Agriculture in Nigeria is practiced at subsistent level and is characterized by numerous farmers operating several scattered small and fragmented plots of land using traditional methods such as land rotation, bush burning and crude implements (Odoemenem et al, 2013). According to Oluwepo, (2010), poor people in developing countries are less privileged and lacked access to formal financial services, a situation that hinders them from contributing to the economic growth of their countries. They depend entirely on farming and farming activities for survival and generation of income, or depend on other non-farming activities to supplement their main sources of income. The validity of this statement becomes evident when it is realized that over 90.0% of the country’s local food production comes from small farms which are usually not more than 10 hectares in size, while at least 60.0% of the population earn their living from these small farms. Most farmers have limited resources, a factor that limits their productivity, investment, savings and income. In the midst of these, farmers have resulted to a number of options to enhance their farm production activities, increase household income and improve their well-being. One of these options includes pooling their individual limited resources in order to work together as members of a cooperative society. Savings are of great importance in a developing economy like Nigeria. This is because of the direct bearing it has on the level of economic activity of the nation. Similarly, within the agricultural sector, the degree of progress attained will largely depend upon what the farmers do with the additional incomes generated from year to year from their farm activities. This stems from the fact that the growth rate in the farming economy largely depends on the stock of capital built in a farm organization and the ploughing back of such stocks in form of savings for further improvement of the farm organization. If these increments are spent on household expenditure, without building up the necessary infrastructure, the future economic development of the nation will be hampered. Adequate integration of saving and investment programmes into development strategies is capable of improving resource allocation, promoting equitable distribution of income, and reducing credit delivery and recovery costs. Cooperatives serve as useful instruments for marketing farmers’ produce and as avenues for saving and credit facilities as these informal financial institutions are mostly preferred by farmers due to easy accessibility, smallness of scale, and informal nature of transactions (Adeyemo, 2013; Onyenwaku and Ozoh, 2014). Among the government programmes involved in loan schemes for cooperative farming is the Family Economic Advancement Programme (FEAP) all over the country. Over the years, many farmers in Nigeria have increasingly not been able to finance their farming activities. They have as such resulted to forming cooperative movements. These cooperative societies are associations of farmers who voluntarily come together to achieve a common goal through democratically controlled business organizations. The most important economic obligation of the members of the cooperative society is savings. Farmers are expected to save a specified amount of money daily, weekly, monthly or quarterly as it is convenient for the group and the individuals. This type of saving is important for agricultural production, because it allows farmers or members access to credit at the onset of the farming season which could boost farm production and income of the farmers. Odoemenem, 2014, Odoemenem, et al. (2016) observed that farmers make use of informal financial sectors to mobilize savings to develop their rural communities. They further observed that rural farmers in Benue State make use of informal financial institutions because they give them access to loans that they cannot get from formal financial institutions due to lack of collateral. Though this sector has its own besetting problems such as inadequate capital base for effective operation, poor record keeping, crude accounting system, gross mismanagement; farmers still prefer it to banks. Osuntogun et al. (2008), Odoemenem, (2015) were of the view that small scale farmers invested their savings in two major areas. These are the agricultural and non-agricultural sectors. Investment in the agricultural sector or farm activity includes the purchase of fertilizer and chemicals, hired labour and buying more land for farming. While investment on non-agricultural sector are mainly centered on education, trade expansion, building houses, dowry obligation, and purchase of durable assets. There is therefore need to examine the impact of these loans on income and increments in income, if any, while considering gender differentials of the farmers.
1.2 STATEMENT OF PROBLEM
One of the basic problems confronting the development of agricultural sector in Nigeria could be attributed to inadequate savings, income and investment by the small scale farmers. Despite this problem, policy makers have not really drawn up adequate and comprehensive rural savings scheme that will motivate the farmers to invest their capital productively (Odoemenem et al., 2013; Sunday et al., 2011). According to Shitu (2012) capital accumulation is a major prerequisite of economic development and if the volume of savings are inadequate to meet investment requirements, major bottlenecks are likely to develop in the process of capital formation and the drive for development. The volume of investment has been found to depend on income, cost of procuring investible funds and entrepreneur’s expectations on the trend of the business in future.In recent times, there has been an upsurge of interest among developing economist, government and international donors to increase financial savings in developing countries, particularly in rural areas and among poor households [Obayelu, 2012], that are predominantly small holder farmers. This is because most of the farmers lack adequate resources (funds, inputs) to engage intensively on agriculture. However, in order to overcome their resources constraints, farmers have realized the importance of pooling their limited resources together by coming together to form cooperative societies for their mutual benefits. Various scholars such as [Odoemenem et al 2013, Akpan et al, 2011, Babatunde et al, 2007] have studied the savings and investment pattern of cooperative farmers in different parts of Nigeria.
1.3AIMS OF THE STUDY
The major purpose of this study is to examine the analysis of savings and investments patterns of potato farmers. Other general objectives of the study are:
1. To examine the patterns of saving and investment available among potato farmers in the Study area.
2. To examine the factors that determines the level of savings and investment by potato farmers in the study area.
3. To examine the influence of income on the savings and investments patternof potato farmers in the study area
4. To examine the factors influencing savings and investments behaviour among potato farmers in the study area
5. To determine the level of savings and investment made by the potato farmers in the study area.
6. To examine the relationship between income and savings and investment patterns of Potato farmers.
7. To examine the factors that militate against savings and investment in the rural areas and suggest policy recommendations based on the findings of the study.
1.2 RESEARCH QUESTIONS
1. What are the patterns of saving and investment available among potato farmers in the Study area?
2. What are the factors that determine the level of savings and investment by potato farmers in the study area?
3. Does income has influenceon the savings and investments pattern of potato farmers in the study area?
4. What are the factors influencing savings and investments behaviour among potato farmers in the study area?
5. What is the level of savings and investment made by the potato farmers in the study area?
6. What is the relationship between income and savings and investment patterns of Potato farmers?
7. What are the factors that militate against savings and investment in the rural areas and suggest policy recommendations based on the findings of the study?
1.5 RESEARCH HYPOTHESES
H0: There is no significant influence of income on the savings and investments patternof potato farmers in the study area.
H1: There is a significant influence of income on the savings and investments patternof potato farmers in the study area.
H0: There is no significant relationship between income and savings and investment patterns of Potato farmers.
H1: There is a significant relationship between income and savings and investment patterns of Potato farmers.
1.6 SIGNIFICANCE OF THE STUDY
The study will be of good help to policy makers, the government and those who are interested in improving agricultural activities or forming agricultural cooperative activities by which people take place in formalized long-term, deliberate and to great extent, specified form in the social and especially economic share of human endeavour.The significance of this study centers on the dearth of information on the saving and investment patterns of potato farmers in Nigeria. It is important to check if the flow of investment has been stable and whether saving is constant, now that the attention of Family Economic Advancement Programme (FEAP) is focused on cooperatives throughout Nigeria. The study findings will be useful for FEAP and other credit agencies for improving their programmes for effective and efficient cooperative farming activities.
1.7SCOPE OF THE STUDY
The study is based on the analysis of savings and investments patterns of potato farmers in Mangu, Barkin Ladi and Bokkos Local Government Areas of Plateau state.
1.8 LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.8 DEFINITION OF TERMS
Agriculture: This is the process of producing food, feed, and fibre by cultivation of certain plant and the raising of domesticated animal. It is a general term per productive activities like growing as crops raising of animal (including poultry) fishing and forestry.
Farmers: An individual whose primary job function involves livestock and/or agriculture. A farmer takes all the necessary steps to ensure proper nourishment of the items that he/she raises and then sells the items to purchasers. Some farmers have been able to capitalize on the need for high-demand products that they produce, such as organic vegetables and livestock.
Savings and investments:Savings is whatever is left over after income is spent on consumption of goods and services, investment is what is spent on goods and services that are not 'consumed', but are durable.
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