Access to trade credit and its impact on the use of European Union (EU) approved pesticides among smallholder cocoa farmers in Ondo State, Nigeria

The use of EU-approved pesticides is low in Ondo State, especially among smallholder cocoa farmers. Perhaps, trade credit, being one of the most important sources of credit, would increase the use of EU-approved pesticides among smallholder cocoa farmers. Therefore, this study investigated access to trade credit and its impact on the use of EU-approved pesticides among smallholder cocoa farmers in Ondo State. A multistage sampling procedure was used to select 240 smallholder cocoa farmers for the study. Data were analyzed using descriptive statistics, a double hurdle regression model, and an endogenous switching probit regression model. The descriptive results showed that on average, respondents were 44 years of age, 16 years of farming experience, 7 people for household size, and 2.70 hectares for farm size. Most of the respondents obtain trade credit from their respective farmers' cooperatives (82%), while others obtain trade credit from input suppliers (73%) and cocoa exporters (66%). It was also noted that only 35% (84/240) of the smallholder cocoa farmers use EU-approved pesticides on their cocoa farms. A majority (73.4%) of the respondents used the Ridomin 66WP gold (Cuprous Oxide + metalaxyl-M). Others use Esiom 150SL (Acetamiprid) (37.5%), Funguran-OH (Copper hydroxide) (49.1%), touch down fort (Glyphosate) (47.5%), and Actara 25WG (Thiamethoxan) (25%). The result further showed that age, gender, household size, farm size, cooperative membership, and assets significantly influenced the probability of a farmer receiving trade credit. However, gender, household size, year of farming experience, cooperative membership, and assets are statistically significant in determining the amount of trade credit obtained by the farmers. The first stage of the ESPM revealed that gender, age, household size, farm size, and cooperative membership significantly influence the smallholder cocoa farmers' access to trade credit. While the second stage of the ESPM revealed that significant use of EU-approved pesticides among users of trade credit is affected by age, household size, education, access to extension services, and cooperative membership. Meanwhile, among non-users of trade credit, variables such as age, farming experience, farm size, land ownership, and cooperative membership significantly affect the use of EU-approved pesticides. After controlling for observed and unobserved covariates, the study concluded that access to trade credit positively impacts the use of EU- approved pesticides among smallholder cocoa farmers. It was concluded that policy strategies aimed at increasing the use of EU-approved pesticides among small cocoa farmers should take into account trade credit.