It's produced by horse having swallowed half of nuts (6)
I believe the answer is:
manure
'it's produced' is the definition.
I can't judge whether this defines the answer.
'horse having swallowed half of nuts' is the wordplay.
'horse' becomes 'mare' (mare is a kind of horse).
'having swallowed' means one lot of letters goes inside another.
'half of' suggests halving the letters.
'nuts' cut in half is 'nu'.
'mare' enclosing 'nu' is 'MANURE'.
'by' is the link.
Can you help me to learn more?
(Other definitions for manure that I've seen before include "Organic fertiliser" , "should promote growth" , "Fertilizing dung" , "Crap" , "Muck" .)