1.1 Background of the Study
Livestock are animals that are reared in the farms (homes) for their economic importance. They are reared for the purposes of consumption, savings and as capital assets. Livestock production can be practised as a small or large scale enterprise. It can also be practised as a full or pastime business. Examples of conventional livestock are cattle, goat, sheep, pig, and poultry. There are also micro-livestock or mini-livestock. According to Madubuike (2004), micro-livestock or mini-livestock are the small sized animals, vertebrates and invertebrates, aquatic or terrestrial, of weight usually lower than 20kg and usually gathered from the wild. It includes fish, snail, grass cutter, giant rat, quails and guinea pigs.
Generally, livestock are important because of their products (meat). Livestock products provide animal protein which is very necessary for a healthy human life. Animal protein significantly contributes to the total supply of nutrients in food intake and increases the productivity of human labour (Mahmood, Khalid and Kouser 2009).
The contribution of livestock production to the national objective of providing sufficient animal protein at affordable prices, generating income and providing employment to some of the populace makes imperative the need for assistance in terms of credit to boost production (Okogie, 1999). Also, the principles of Economics and Finance have shown that by using other people’s funds along with his own, an entrepreneur is most likely to improve his business substantially than if he had depended solely on his equity (Lot, 1998).
Credit is the back bone for any business activity including agriculture. Agriculture, as a sector, depends more on credit than any other sector of the economy because of the seasonal variations in the farmer’s returns and a changing trend from subsistence to commercial farming (Mahmood, Khalid, Kouser, 2009). This is, in view of the fact that credit plays an important role in enhancing agricultural productivity, especially in developing countries (Iqbal, Munir, Abbas, 2003). The unpredictable and risky nature of agricultural production, the importance of agriculture to our national economy, the urge to provide additional incentives to further enhance the demand by lending institutions for appropriate risk aversion measures in agricultural lending provided justifications for the establishment of the Agricultural Credit Guarantee Scheme Fund (ACGSF) by the Federal Government of Nigeria in 1977 (Mafimisebi, Oguntade, Mafimisebi, 2008).
The scheme was established to facilitate the flow of institutional credit from commercial and other deposit banks to farmers in order to stabilize their farm productivity, increase their output, income and loan repayment capacity. The fund is under the management of a board while the Central Bank of Nigeria is the managing agent for the administration of the scheme. In September 2003, the Central Bank management and Board of the Agricultural Credit Guarantee Scheme Fund approved the participation of licensed community banks (now Microfinance banks) in the Agricultural Credit Guarantee Scheme with effect from January. 2004. The agricultural purposes for which loans can be guaranteed under the scheme are:
a. establishment or management of plantations for the production of rubber, oil palm, cocoa, tea and similar crops;
b. cultivation or production of cereal crops, tubers, fruits of all kinds, cotton, beans, groundnuts, sheanuts, beniseed, vegetables, pineapples, banana and plantains,
c. animal husbandry including poultry, pig, cattle rearing, fish farming, rabbitry, snailery, grass-cutter farming, honey production. (CBN, 1978).
The scope of (c) above was expanded in the Amendment Decree of 1988 to include fish culture, fish captures and storage. As at now, bank loans under the scheme are guaranteed up to 75% against default in payment, subject, in the case of loan to an individual to a maximum of one million naira and in the case of loan to a co-operative society or a corporate body to a maximum of five million naira (CBN, 2005).
1.2 Statement of Problem
Animal protein is usually used as a criterion to measure food quality but this is recognized as a limiting factor in the diets of many people in developing countries. Nigeria is rated as an animal protein deficient country (Ohajianya, Onyeagocha and Ibekwe, 2006). Okorie (2002) reported that per capita protein intake in Nigeria averages 51.7 grams daily of which 8.6 grams came from animal sources. This is far below the minimum of 65 grams of animal protein intake level recommended by the Food and Agriculture Organization (Madubuike, 1992). It is also a known fact that Nigeria imports most of the livestock and its products such as poultry products, fish and beef that are consumed by her citizens. This situation is attributable to low livestock production and its consequence is low consumption of the products because of high prices.