Agricultural Financing and Poverty Reduction Among Tomato Farmers in Ekiti State, Nigeria

This study evaluated agricultural financing and poverty reduction among tomato farmers in Ekiti State, Nigeria. It described the socioeconomic characteristics of tomato farmers, identified the agricultural financial options available, assessed the poverty status of the farmers, examined the effects of agricultural financing on poverty, and explored the constraints to financing tomato production. A three-stage sampling technique was used to select 120 tomato farmers, Data were collected through structured questionnaires and personal interview. Descriptive statistics were employed to analyze the socioeconomic characteristics, financial options, and constraints, while the mean per capital household expenditure method was used to assess poverty status. The poverty line was calculated by dividing the total household expenditure by household size, with a threshold set at two-thirds of the mean per capital expenditure. Probit regression analysis was applied to determine the relationship between agricultural financing and poverty reduction, considering factors such as age, sex, education, farming experience, credit access, and farm income. The findings revealed that personal savings were the most common financial source for tomato farmers, with Non-Governmental Organization (NGO) funds being the least accessed. Based on mean per capital household expenditure, 52 farmers were classified as poor and 68 as non-poor. The Probit regression model indicated that access to loans and increased loan amounts were associated with a reduction in poverty levels, while higher interest rates were linked to an increased probability of poverty. The study also identified significant constraints to financing, including lack of collateral, high interest rates, bureaucratic loan processes, and limited awareness of financial options. Additionally, short repayment periods, poor financial records, and fears of loan default were key barriers preventing farmers from accessing formal financial support. These findings emphasized the need for improving access to credit, lowering interest rates, and addressing financial constraints to foster poverty reduction among tomato farmers in Ekiti State.