PROFITABILITY AND VIABILITY OF FISH FARMING ENTERPRISES USING GOVERNMENT CREDIT AGENCY LOAN IN OGUN STATE OF NIGERIA

Abstract

In spite of the potential of aquaculture, there are lots of problems militating against its development in Nigeria. The
major constraint to increased fish production in Nigeria is poor rate of capital formation and lack of credit facilities
among others. Robust economic growth cannot be achieved without putting in place well focused programmes to
reduce poverty through empowering the people by increasing their access to factors of production, especially credit.
Governments in both developed and developing countries attempt to overcome these problems by subsidizing credit,
setting up credit guarantee fund schemes and specialized agricultural credit bank and stimulating institutional
innovations in the financial system. Sixty beneficiaries of the Nigerian Agricultural Cooperative and Rural
Development Bank (NACRDB) loan were randomly selected from Agricultural extension zones in Ogun State.
Structured interview guides and face to face interview were used to elicit information from the respondents. The
data collected were analyzed using descriptive statistics and profitability ratio. The cost and return analysis
indicated that, total variable cost was N1,396,617.63, while the total revenue was N3,446,467.00, which gives a net
farm income of N430,236.88. The profitability ratio gives a benefit cost ratio of 1.14. This indicates profitability of
small scale fish farming in the study area. The regression analysis showed that the best fitted model is the double
log function which recorded a coefficient of determination (R2) of 0.39. Constraints hindering fish farming in the
study area include high cost of feeding, poor marketing channel and inadequate capital. It is recommended that
farmers should group themselves together as cooperators so as to have access to credits and inputs at cost.