Impact of credit constraints on aquaculture production and risk exposure in Ondo State, Nigeria

ABSTRACT

The issue of credit constraints cannot be underestimated in aquaculture production as it influences output through the amount and combination of inputs used. Hence, this research work studied the impact of credit constraints on aquaculture production and risk exposure in Ondo State, Nigeria. Multistage sampling procedure was employed to choose 180 fish farmers. To consider selection bias due to both observable and unobservable issues, an endogenous switching regression model was used to analyze data from 170 respondents who gave adequate information. The empirical findings revealed that being noncredit constrained increased fish output and reduced downside risk exposure (probability of output failure). Also, the farmer’s age, household size, education, nonfarm income, pond system, quantity of feed, and risk attitude significantly influenced credit status. Therefore, policy makers who intend to increase fish production and reduce output failure to bridge the supply-demand gap need to reduce credit constraints.

KEYWORDS:

• Credit
• constraints
• risk
• aquaculture
• endogenous switching regression model

Disclosure statement

No potential conflict of interest was reported by the authors.