Professional Documents
Culture Documents
SAMAR UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF ECONOMICS
ID:SU/1301820
January, 2024
Samara Ethiopia
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Table of Contents
Contents Page
Acronyms.............................................................................................................................................................IV
CHAPTER ONE.......................................................................................................................................................1
1. INTRODUCTION............................................................................................................................................1
1.1 Background of the study.............................................................................................................................1
1.2 Statement of the problem..........................................................................................................................2
1.3 Objective of the study................................................................................................................................3
1.3.1 General objective................................................................................................................................3
1.4 Significance of the study.............................................................................................................................4
1.5 scope of the study......................................................................................................................................4
1.6 Limitation of the study...............................................................................................................................4
1.7 organization of the study............................................................................................................................4
2 .LITERATURE REVIEW.........................................................................................................................................5
2.1 Theoretical Literature.................................................................................................................................5
2.1.1 Definition and concepts of rural credit................................................................................................5
2.1.2 Source and type of credit in Ethiopia..................................................................................................5
2.1.3 The problem of rural credit.................................................................................................................6
2.1.4. Fertilizer and agricultural output........................................................................................................7
2.1.5 Ethiopia Fertilizer Sub sector...............................................................................................................7
2.1.6 The Role of Improved seeds................................................................................................................7
2.1.7 Source of Improved seed.....................................................................................................................8
2.2 Empirical Literature....................................................................................................................................8
2.2.1 Credit policy in Ethiopia.......................................................................................................................8
2.2.2Fertlizer policy Initiate..........................................................................................................................9
2.2.3 Economic performance of credit in (1994-1995)................................................................................9
CHAPTER THREE..................................................................................................................................................11
3 METHODOLOGY...............................................................................................................................................11
3.1 The study’s Area.......................................................................................................................................11
3.1.1Types and sources of data..................................................................................................................11
3.2 Sampling Techniques’ and sample size.....................................................................................................11
3.3 Method of data analysis...........................................................................................................................13
3.4 Model specification and Estimation Technique........................................................................................13
3.4 Definition of variables.............................................................................................................................. 13
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4.1 Timeschedule……………………………………………………………………………………………………………………………….……….16
4.2 Budget breakdown.....................................................................................................................................16
REFERENCES...................................................................................................................................................18
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Acronyms
AIDB Agricultural industrial Development Bank
AISCO Agricultural input Supply Corporation
BORAD Bureau of Rural Agricultural Development
CBE Commercial bank of Ethiopia
DAS Development Agencies
DBE Development bank of Ethiopia
ESC Ethiopian Seed Corporation
ESE Ethiopian seed enterprise
FAO Food and Agricultural organization
GDP Gross Domestic Product
MOA Ministry of agriculture
NBE National Bank of Ethiopia
NGO Non –Governmental Organization
SNNPR South Nation Nationality and people of Region
UNDP united Nations Development Program
WB World Bank
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CHAPTER ONE
1. INTRODUCTION
The government of Ethiopia in 1993 introduced polices to support agricultural input sector with
objective to organizer and as well as liberal the seed,fertilizer and pesticides sectors . sectors
distribution and market or both privative and public entities furthermore these polices facilitate
import and distribution of commodities in conductive and competitive environment
market .Therefore the national seed fertilizer and pesticide agencies were established since July.
2002 , these three entities were grouped under the natural agricultural inputs authority in the
charge of ensuring the overall coordination of the sector.
The financial components of the program were and still are supported by the commercial bank of
(CBE) as well as other leading Institution in providing credits to imputers distributors and uses
of agricultural inputs.
As of its launch in 1995 till 2000 the extension package program experienced increased annual
interest from the farmers in rained agricultural production areas and proved Ethiopia capacity to
reach national food sufficiency, this led in 2000 and 2001 to cereal production generating buffer
stocks .However the production increment was not accompanied by necessary any mechanism to
insure market price between November 2000 and may 2002 .comes quality. Further asset of the
rural population occurred as farer was complied with returned the credit and loans contracted or
the purchase of these inputs packages (Cushier and Lamias. 2001).
The Ethiopian economy is dominated by agriculture that accounts for over 50% of Gross
Domestic product (GDP) 90% of export earning and 88% of the labor force .It also supplies
food to the urban areas and raw materials to the manufacturing sectors. Despite the significant
contribution of agriculture to the Ethiopian economy, particularly maize production, the sector
faces various challenges that hinder its productivity and growth. These challenges include both
biotic and abiotic factors, such as weed infestation, drought, floods, and soil nutrient
deficiencies. Among these challenges, weed infestation stands out as a significant constraint,
leading to reduced maize grain yields. Weed competition not only affects maize yields but also
increases production costs and interferes with harvesting processes.
There fore inadequate role of input credit on productivity of maize and this study an attempt
done to investigating the role of input credit in productivity and previous study are done in in
different area of Ethiopia on the role of agriculture input credits on productivity of maize
however .this research different from the other .researches studying different where there is no
any research was done soil fills this gap will be conducted with aim of answering the following
research questions.
What are the problem that hinder farmers to use agricultural inputs credit maize
production
What the trend looks like in provision and collection of agricultural inputs credit
What is the role of agriculture inputs credit in the productivity of maize
2 .LITERATURE REVIEW
2.1 Theoretical Literature
2.1.1 Definition and concepts of rural credit
The term credit is defined in different ways by different authors Belshow.H(2003) in the book of
provision of credit especially reference to agricultural defined the credit as <<….a condition
which enables adperson to extend his control as distinct from his ownership of resources>>.
Credit is viewed to be essentially our concept .In process of borrowing money as farmers to
obtain the economic power to carry out particularly course of action (E.L Baum and other
2001;p23).According to William claim(2007), agricultural credit is<<wider view of the context
of prevailing food gain the reduction of poverty among the rural poor the view initiatives aimed
at increasing the flow of investment for the agriculture production in the developing
countries.agricultural credit might be considered timely but the urgent concern.
The provision of credit involves two parts amender and borrower .It also invite scaprice for each
transfer or control over money which is the interest ratio charged by lender to borrower (Elias
2002). In the process of credit there are individual the one who lead the money the one who
relieve the money .There is also certain amount of money charged by the lenders to the
borrowers haste pay credit sum of money in favor of the person to who control over is
transferred>>(Elias frank,.2002).
2.2Empirical Literature
2.2.1Credit policy in Ethiopia
3 METHODOLOGY
Yi=β0+β1IS+β2E+β3FS+β4FE+β5P+β6ac+β7FS1+β8F+β9S+β10MS+ui
Where:
This model allows for examining how each independent variable (such as improved seed,
education, etc.) affects maize productivity. The coefficients (β) represent the expected change in
maize productivity for a one-unit change in the corresponding independent variable, holding all
other variables constant.
Estimation Technique: The estimation technique will be used to estimate the coefficients of
the regression model is Ordinary Least Squares (OLS) regression. OLS regression minimizes the
sum of squared differences between the observed values of the dependent variable and the values
predicted by the regression equation. This technique provides unbiased estimates of the
coefficients and allows for testing hypotheses about the relationships between the independent
and dependent variables.
Using OLS regression, the model parameters (β coefficients) will have estimated based on the
available data on maize productivity and the independent variables. The estimated coefficients
are then used to analyze the impact of agricultural input credit and other factors on maize
productivity, providing valuable insights for policymakers, researchers, and stakeholders in the
agricultural sector.
Table1. A rough calculation of time which will be required for the study is
outlines in the following