International Journal of Current Multidisciplinary Studies Available Online at http://www.journalijcms.com Vol. 1, Issue, 1, pp.10-23, june, 2015 RESEARCH ARTICLE THE EFFECT OF COUNTERPART FUND PAYMENTS ON THE IMPLEMENTATION OF FADAMA III INTERNATIONAL DONOR PROJECT IN RIVERS STATE: 2009-2012 Somiari, Fubara Richard * , Chukuigwe, E. C., Ewubare, B and Ekine, D. I Department of Agricultural and Applied Economics/Extension, Faculty of Agriculture, Rivers State University of Science and Technology, Port Harcourt, Rivers State, Nigeria. Keywords: Counterpart, Fund, Payments, FADAMA III, International, Donor, Assets, Beneficiary, Capacity Building, Grants, World Bank. Article history : Received on May 20, 2015 Received in revised form, May 28, 2015 Accepted, June 19, 2015 Published June 28, 2015 ABSTRACT: This study analyzed the effects of beneficiary contributions, local and state government counterpart fund payments on the implementation of FADAMA III project in Rivers State from 2009 –2012. Monthly and annual time series secondary data of counterpart fund payments within the period under review were used for the analysis. The study made use of descriptive statistics, the short run ordinary least square test, unit-root test analysis, Co- integration procedure, as well as Parsimonious Error Correction Models. Results show long run relationship between the dependent and independent variables. The parsimonious result for the Total Project Implemented (TPI) equation shows that all for every ₦1 million paid as beneficiary contributions by FADAMA Groups, the value of Total Project Implementation increases by N 2.91 million. The result of Asset Acquisition for Groups (AAG) equation shows that with every N 1 million paid as beneficiary contributions by FADAMA Groups, the value of Asset Acquired increases by N 1.12 million monthly. The result for Capacity Building for Groups (CBG) equation shows that for every N 1 million paid as beneficiary contributions by FADAMA Groups, the value of Capacity Building increases by N 137,620 monthly. The result for the OPT equation shows that for every N 1 million contributed by beneficiaries of FADAMA, the value of Output Produced is increased by N 4.72 million monthly. Also, every N 1 million disbursed by the World Bank fund to FADAMA Groups, the Output Produced increases by N 1.42 million monthly. Based on the findings of the study, it is recommended that there should be legislative approval to deduct counterpart fund payments at source to avoid the problem of nonpayment after project takeoff as this will contribute effectively to full implementation of FADAMA III project. INTRODUCTION: Nigeria’s agricultural sector has a high potential for further growth. Productivity is low and can be much improved. Basic social and Productive infrastructure is both inadequate and in a state of decay due to low budgetary provision for operation and maintenance of the facilities and lack of community participation in maintenance. The agricultural research and extension systems are unable to respond to the increasingly diverse needs QUICK RESPONSE CODE Corresponding author: Somiari, Fubara Richard Department of Agricultural and Applied Economics/Extension, Faculty of Agriculture, Rivers State University of Science and Technology, Port Harcourt, Rivers State, Nigeria. Article can be accessed online on: www.journalijcms.com Copyright © Somiari, Fubara Richard et al., This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. of rural clients, including advice on sustainable land management. Deficiencies in input distribution systems limit the timely availability of improved seed, fertilizers, chemicals, and machinery. Livestock and fishery sub-sectors also lack adequate availability of inputs such as feeds and veterinary inputs. Many Farmers could not have access to financial services(less than 10 percent of rural household use formal banking and insurance services) limits the farmers’ ability to obtain inputs and exploit the opportunities offered by a huge and rapidly growing domestic market. (World Bank, 2008). It was in the light of the above problems that the FADAMA III project was established, although the effective implementation of this project required the payment IJCMS