THE ROLE OF FINANCIAL INSTITUTIONS IN AGRICULTURAL DEVELOPMENT IN NIGERIA
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Agricultural developments in Nigeria were established during the third National Development Plan (1975-1980) to enhance agriculture and food production. These are World Bank assisted projects consisting of an input delivery and credit supply system.
However the role of financial institution in agricultural development involves ways and means by which a farmer obtains the entire necessary fund required in order to carry out agricultural production. And it also deals with the supply of demand for funds in agricultural sector of the economy. Where a farmer has a sufficient capital of his own to carry out farm production he can then obtain credit from the best available sources.
Agricultural finance is playing significant role in the development of the agricultural sector because adequate fiancé is required by farmers to establish economic size farms or large scale farms, and to expand existing farms. Adequate finance also brings significant changes in the structure of agriculture. This is because finance enables the acquisition of machinery and farm equipment to substitute labour use and the purchase of other farm inputs.
The use of finance in farming leads to rapid increase in farm land value which necessitates the farmers to look outward for fund.
Agricultural finance from co-operative societies is very important in communities where credit institutions such as commercial banks are lacking; farmers who belong to a co0operative society can often get inputs against liens over produce for sale through the societies. Credit it normally limited to goods and services, but cash loans are sometimes made.
Therefore, agricultural fiancé is development are has been made mandatory in Nigeria through government directives on rural banking and the lending of a certain percentage of the banks loanable fund or deposit to agricultural sector of the economy.
As a result of the Nigeria enterprises 1972, the federal government of Nigeria acquired banks shares.
However, agriculture is very important in most developing countries.
The purpose of agricultural or land Banks is to help in the development of agriculture with the supply of credit. It requires to provide short and long term loans to farmers to carry our agricultural production.
OBJECTIVES OF THE STUDY
The objectives of this study are
1. To examine the impact role of financial institutions in agricultural development
2. To examine why there is decline in agricultural production
3. To examine the ways and means by which a farmer obtains all the necessary fund required in order to carry out agricultural production
STATEMENT OF THE PROBLEM
The following are some of the statement of problem
1. The low educational background of some of he farmers makes it difficult for majority of the farmers to get information about the existing credit facilities and the procedure involved in getting such loans
2. Farmers in some cases do not get their disbursement from the ministries loan units in good time for finely operation
3. Inadequate supervision of individual farmers bring about difficulty in recovery loans that has been given to farmers
4. State agencies do not reach the number of farmers originally targeted
5. Funds to other project that is not originally included in the programme without due consultation bring about difficult in loan recovery
6. Most, farmers do not have the required collateral to obtain loan
7. There are many loan defaulters and this prevents other farmers from benefiting
8. Too many risks in farming. There is risk of crop failure as a result of disease s and pest, prices of products may fall after harvest
SCOPE OF THE STUDY
The study is reviewing the effects role of financial institutions in agricultural development in Nigeria. This is only a case study since the result will be directly relevant to financial institution in agricultural development in Nigeria and the society at large
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