Impact of credit on the climate adaptation utilization among food crop farmers in Southwest, Nigeria: application of endogenous treatment Poisson regression model

Abstract

AbstractThe importance of credit in agriculture and technology adoption is well researched, but little is known about its impact on the intensity of climate adaptation strategies (CAS) utilization. To contribute to the literature on climate change, the study examines the impact of credit status on the intensity of CAS utilization with its treatment effects. Unlike previous studies that investigated CAS as binary decisions or multi-class models, the study changed the narrative by measuring the number of CAS adopted and utilized by crop farmers. Farm-level data were collected from 150 crop farmers in Southwest Nigeria using a well-designed questionnaire. Descriptive statistics and the endogenous treatment Poisson regression (ETPR) model were used for the data analysis. The results revealed that credit status positively and significantly impacts the intensity of CAS utilization. Other farm-level factors that jointly impacted CAS utilization were education, experience, age, income, extension contacts and farm size. Likewise, the credit status co-joints with climate variables, such as access to climate information, perceived rainfall and temperature, to impact the intensity of CAS utilization in the area. Based on the treatment effects estimates, an average crop farmer will utilize 1.986 times CAS more when he is not being credit constrained, while the average crop farmer in the treated group will utilize 1.757 times CAS more than it would if s/he is credit constrained. Thus, the policy should focus on revamping credit institutions that prioritize requisite adaptation strategy resources.