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1. BAUCHI STATE UNIVERSITY GADAU DEPARTMENT OF ECONOMICS SEMINAR PRESENTATION ON IMPACT OF AGRICULTURAL CREDITS ON SESAME SEED PRODUCTION AND INCOME IN NIGERIA BY USMAN ADAM SALIHU SPGS/MECO/20/0034 SUPERVISE BY Dr. AUWAL YAHYA TILDE JANUARY, 2022. 1

2. INTRODUCTION BACKGROUND OF THE STUDY Agriculture has evolved through several stages of development in Nigeria as an indigenous occupation. This development is as a result of government policies and the state's approach to agriculture, which either diminishes or magnifies the sector's impact on the country. Agricultural development is the foundation for economic growth and provides a primary means of food security, job creation, and poverty reduction in Nigerian. (John & Charles, 2015). These are the same objectives that have led successive Nigerian governments to initiate various agricultural intervention programs in order to create jobs, improve food security, and aid in poverty reduction. According to John & Charles (2015), every attempt to eliminate poverty in Nigeria by successive governments and international donor agencies, such as the green revolution and Operation Feed the Nation, have been fruitless. The bulk of Nigeria's poor population live in rural areas, and a large percentage of them are small-scale farmers ( Owan , Ndibe , and Anyanwu , 2020). 2

3. INTRODUCTION CONT. AGRICULTURAL CREDITS In an effort by the successive government to revitalize the agricultural sector, an agriculture credit scheme was introduced, which is generally considered as a major input in the development of agriculture. The Agricultural Credit Guarantee Scheme Fund (ACGSF) was founded in 1977 to encourage financial institutions to lend more to the country's agricultural industry. The goal was to make it easier for farmers to get loans, which would lead to an increase in agricultural productivity in the country . (AGCSF), in an effort to improve farmers' access to credit, has implemented a policy that guarantees financial institutions a 75 percent recovery of the defaulted amount (in the event that borrowers default). Loans were issued at discounted interest rates at the start of the scheme, but under the currently operational Interest Drawback Program, market determined rates were finally applied (IDP). In its 34/35 years of existence, the scheme has guaranteed approximately 55 billion NGN (347,452,541USD) in agricultural loans to 770,438 project farmers as of June 2012. (Jonathan, Christiana & Daniel, 2020). 3

4. The above graph shows increased steadily during a two-year period. Between 2006 and 2008, the value of guaranteed loans fell dramatically due to a variety of issues, including nonrefundable of loan from those who collect. Guaranteed values of (ACGSF) have been increasing since 2007 and will continue to do so until 2015. Also, from 2016 to 2019, the guaranteed values are dropping at a quicker rate until 2020, when they begin to increase. Source: CBN, Statistical Bulleting (2020). INTRODUCTION CONT. 4

5. INTRODUCTION CONT. SESAME SEED The sesame plants likely originated in Asia or East Africa, and ancient Egyptians are known to have used the seed on many varieties of local and international foods. The seeds were used by the Chinese at least 5,000 years ago, and for centuries they have burned the oil to make soot for the finest Chinese ink blocks. The Romans ground sesame seeds with cumin to make a pasty spread for bread. Once it was thought to have mystical powers, and sesame still retains a magical quality, as shown in the expression “open sesame,” from the Arabian Nights tale of “Ali Baba and the Forty Thieves.” Sesame plants Sesame seeds 5

6. PROBLEM STATEMENT Agriculture is the key to economic growth and provides a primary means of food security, job creation, and poverty reduction among the rural poor The lack of appropriate financial facilities to enable small-holder farmers to acquire farming inputs has been identified as the biggest hindrance to high yield sesame cultivation in Nigeria. Modern technologies and input variety are exactly what promote high output. In order to make financing available to rural farmers, the federal government has created a number of agricultural credit schemes. Despite the fact that billions of naira have been disbursed to various crop farmers associations, including sesame seed, the sesame output remains below expectations, despite its critical demand in the international market. 6

7. RESEARCH OBJECTIVES The broad objective of this study is to investigate the impact of agricultural credit on sesame production and farmers income in Nigeria, while the specific objectives are: To examine the impact of agricultural credit on sesame production in Nigeria. To examine the relationship between agricultural credit and farmers’ income. SIGNIFICANCE OF THE STUDY The impact of agricultural financing on sesame seed and farmer income in Nigeria is going to be investigated in this study. The study's findings are likely to be valuable to policymakers, to contribute to growing body of literature, economists, and the general public in their efforts to enhance the agricultural sector and increase sesame seed output in Nigeria and the whole economy. Finally, the recommendations will aid future study or contributions to agricultural credit and sesame production in Nigeria's development quest of increased sesame seed output. 7

8. LITERATURE REVIEW CONCEPTUAL REVIEW AGRICULTURE A ccording to International labour organisation (2011), define agriculture as all forms of activities connected with growing, harvesting and primary processing of all types of crops, with the breading, raising and caring for animals and with tending gardens and nurseries. . Agriculture is the deliberate effort to modify a portion of Earth’s surface through the cultivation of crops and the raising of livestock for sustenance or economic gain (Rubenstein, 2003 ). AGRICULTURAL CREDIT: Agricultural credit can be defined as the process of sourcing, acquiring and application of capital in agricultural business. Or agricultural credit can also be defined as the acquisition or procurement and use of capital for the purpose of production, processing and marketing of agricultural products. It deals with the supply and demand of fund in agricultural sector economy, farmer must have money to carry out his farming activities 8

9. SESAME SEED According to Kodgav (2021) defined sesame seed as a tall annual harbiceous plant of tropical and subtropical areas of the old world, cultivated for its oil reach seed. The sesame seed is popularly known as Ridi in Hausa, Osisi in Igbo, Yamase or eaku in Yoroba and Ishwa in Tiv language. TYPES OF SESAME SEEDS There are three major variants of the sesame seed, but the most common sesame seed in Nigerian are: White Sesame: Seeds this type of sesame seed is usually grown in the Middle Belt of the country, especially Benue and Nasarawa State. Golden Sesame Seeds are mostly found in the Northern part of Nigeria (Kano State is a major producer of this type). The Golden/Light brown sesame seed is slightly nutty, mild, firm and not crunch. LITERATURE REVIEW CONT. 9

10. Black Sesame Seed: Black sesame seeds tend to be more crispy and filling than white sesame seeds, which also have a relatively toned-down flavour . Black sesame seeds have a more crunchy, stronger & nuttier flavor layered, nutty texture than white sesame seeds. White sesame seed Golden/Brown sesame seed Black sesame seed 10

11. EMPIRICAL REVIEW 11 S/No 1 2 3 AUTHOR/ YEARS Babajide Fowowe (2020). Etonihu I.K, Rahman S.A, and Usman S (2013). Central Bank of Nigeria (2018). TITLE The effect of financial inclusion on agricultural productivity in Nigeria. Determinants of Access to agricultural credit among crops farmers in a farming community of Nasarawa state, Nigeria. Commercial Agriculture Credit Scheme Evaluation and Impact Assessment Report. METHODOLOGY The study makes use of the Living Standards Measurement Study– Integrated Surveys on Agriculture (LSMS-ISA). Descriptive statistics and stepwise linear regression model were use. A mixture of qualitative and quantitative methods. SAMPLE Three-time period with time series and cross-sectional dimension data. 125 Random Sampling technique. The sample size of the study was three state of the federation (Kano, Rivers and Oyo state). RESULT The finding reveal that financial inclusion, irrespective of how it is measured, has exerted positive and statistically significant effects on agricultural productivity in Nigeria. The result of the study observed that education, distance to source of credit and types of credit source were significant factors affecting farmers’ accessibility to agricultural credit The finding reveal that beneficiaries involved in both agriculture production and processing recorded positive aggregate growth difference in income and volume of produce when compared with nominal and real output growth of agriculture and manufacturing.

12. METHODOLOGY Auto-regressive Distributed Lag (ARDL), is selected as the proposed methodology to analyses the impact of agricultural credit on sesame seed production and income in Nigeria. ARDL was selected because it provide remedy to some basic time-series problems such as endogeneity problem. 12

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