Socioeconomic Analysis of the Relationship between the Socioeconomic Characteristics and the Leverage Ratio of Rice Farmers in Anambra State, Nigeria

Abstract

The burden of poor access to financial services tends to be heavier on rice farmers because of the government's predisposition to bridge rice demand-supply deficit through importation. Improving yields is insufficient to lift rice farmers from poverty. It is necessary to understand and change the system in which the farmers operate one of which is the debt-equity mix of the enterprise. This study analyzed the relationship between socioeconomic characteristics and leverage ratio of rice farmers in Anambra State Nigeria with a view to informing and influencing policy. A hundred rice farmers were randomly selected. Data were analyzed using descriptive statistics and regression analysis. The debt-equity ratio was 0.33. Therefore, the rice farmer could employ more debt to increase yield. In terms of solvency and credit worthiness, the rice farmer had the capacity to employ more debt for profitable investment. Targeted financial and risk management assistance should be extended to the farmers.