A study of constraints Small-Scale cotton farmers face in loan repayment: The case of Monze farmers

Abstract

This study was designed to establish non-producer price constraints that deter small-scale cotton farmers from meeting their loan obligations. The study was initiated to establish constraints that can supplement factors such as low producer prices that deter small- scale cotton farmers from meeting their loan obligations. The stud specifically focused on those farmers whose loan repayment records in out-grower schemes were low. The rationale of the study was to establish the constraints and later recommend interventions that would enhance good performance. The specific objectives of the study were to establish the optimum loan size for the small-scale cotton farmers that they would manage to meet the loan obligation. In addition, the study was conducted to have an insight on the attitude of the farmers on the loan. To achieve the objectives of the study, primary and empirical data was collected through a structured questionnaire. To supplement primary data secondary data was collected from research reports, agricultural bulletins and other publications to enrich the study. Primary data was analysed using the Statistical Package for Social Sciences (SPSS). The enterprise budget was generated using Microsoft Excel. The findings of the study show that farmers fail to meet their loan obligations due to low yields per hectare. Most farmers in Monze get on average 600kg per hectare, which is far below the national average yield of 800kg per hectare. This low yield interprets into low Gross Margins of less than K350, 000 the average Gross Margin in the country. The study revealed that yields are low due to inadequate knowledge by farmers on new and efficient technology in cotton production. For example, most farmers have not adopted the new sprayer ulva + a more efficient sprayer than the knap sack sprayer.