Role of Agricultural Finance in Producing Food Crops

This paper presents a comparative analysis of current trends in financing of main food crops in the public irrigated schemes of the River Nile State (RNS) and analyzes various agricultural credit mechanisms that have been used in the State. It aims to explore the plausible framework in order to increase agricultural outputs and farmers returns in the area of study. It was on this basis the research undertook Elzeidab scheme of RNS as a case study. Primary data was collected by using structured questionnaires for (70) randomly selected respondents from Elzeidab scheme. Statistical analysis has been employed to assess current situation in financing of main food crops in the scheme. The paper unveiled that these crops are described as low value crops. Also, it revealed that the formal finance is characterized as inefficient to serve the target part of farmers while the informal one is limited to cover the farmer’ expenditures. The paper concluded that, the credit market in RNS is not well developed and the majority of households (93%) have no access to formal financial institutions. This allows the recommendation to be drawn that improving finance institutions will enable the tenants to improve their farm resources use.