AGRICULTURE FINANCING IN NIGERIA PROBLEMS AND PROSPECT
CHAPTER ONE
INTRODUCTION
Background of the Study
Agricultural sector is the earliest sector of the economy in the history of mankind. The history of agriculture started when man wandered from places to place gathering fruits and animals to satisfy his immediate need. As at that time, man had three basic necessities in life, these are air water and food air and water is provided naturally while food has to be provided by man himself with much and little hindrance from nature. Agriculture as the backbone of West Africa economy is further revealed by the fact that it contributes an average of about 75 percent of various counties exports. Agriculture supplies about 80 percent of Nigeria’s exports.
The importance of agriculture in the economy of west Africa is borne out by many factors, for instance, it employs between 60-90 percent of west Africa occupied population in Liberia, 80 percent of the working population is engaged in agriculture forestry, fishing and breeding more than 60 percent of the employed labour force is engaged in agriculture in Ghana in the Ivory coast, 85 percent of the population are farmers, and the percentage rises to go if we include the immigrant population of that country in Senegal 80 percent of the active population is engaged in agriculture. All these point to the facts that agriculture is the main source of livelihood of West Africa Agriculture as an economic development has provided a dominant position within the economy of each country gives at a crucial role in the economy development of West Africa. It provides raw materials for the textile, tyre, soap, cocoa, fruit canning and cigarette factories.
In 1968, agricultural exports formed 72 percent of the total exports of Ghana. The 408.000 tons of agricultural products, valued at about 24,000 million CFA Francis, which the Cameroon republic exported in 1964. Constituted about 80 percent of their total exports. At about 20 percent of the total agricultural output of West Africa is exported while the remaining is consumed directly or used by the local industries. The rates of economic development and growth of Nigeria and West Africa countries of the under developed and developed ones has increase efficiently under production of the existing exports crops as permitted by the world markets, and the developing of new ones in orders to increase foreign exchange earning which turn permits the import of the goods and services needed for development. This goes to say that one of the most significant impetus for economic development lies in the size and stability of a flow of maximum proportion of investment in agricultural output which will have to be rapidly expanded. Also, with an increase in the incomes obtained from the sale of food stuffs and agricultural raw materials by the farmers more funds will be available for further investment in agriculture and the new industries.
According to Areoye (2014), some states have low agricultural potentials, it has also been observed that West Africa small scale farmers applies a lot of general labour, the supply of which is plenty, and a little capital to a wider extent of land than his counterpart in the economically advanced area of the world. Simple implement likes hoes and cutlasses are used on the frames while fertilizers and manures are not widely used. Almost all the traditional farmers are uneducated thus activities not properly organized and production cost are not carefully related to their yearly output. However, bulk of agricultural production in West Africa come from millions of small scale farmers in Nigeria, peasant farmers cultivate averages of two to three areas and in some part of the Northern states, each extended family has been found to hold about 17 areas, about one quarter of which is usually under permanent cultivation. It is significant that apart from food products the bulk of exports like rubbers, cocoa, cotton and palm kernels are produced on the small holding of millions of West Africa peasant farmers. And in spite of the significance of large scale plantations farming in Liberia and Ivory coast yet now here does the proportion of plantations exceed 10 percent of the total cultivated land. Lastly, the small scale farmers use traditional methods of farming one of these is shifting cultivation and bush fallowing by which they allow land to go back to bush after a few crops. Thus, new land is cleared for cultivation which may be for two or five years, depending on the pressures of populations of land after which it is abandoned for a number of years, the percentage of the total land area that is under fallow at any period of time has been estimated to be at least 40 in Nigeria which however engages it to problems in food production in Nigeria.
STATEMENT OF PROBLEM
The problem of low productivity and lack of improvement in agriculture has been traced to various causal factors. One of such course is the lack of adequate finance to the agriculture’s. They complain that they do not have enough fund to carry on with their activities. We want to investigate the reasons why these formers find it difficult to raise enough money to carry out their important work I will also investigate the ways of eliminating these problems. Several measures have been taken by the government to encourage agriculture financing in the country but they houses not yielded the necessary effect for they are established.
OBJECTIVES OF STUDY
The study seeks to examine the various roles of financing agriculture in Nigeria. Other objectives for the study are:
1. To ascertain if high interest rate of lending is the problem of agricultural financing in Nigeria.
2. To know if the reduction of interest rate will increase agricultural financing in Nigeria.
STATEMENT OF HYPOTHESES
H0: High interest rate of lending is not the problem of agricultural financing in Nigeria.
H0: Reduction of interest rate will not increase agricultural financing in Nigeria.
SIGNIFICANCE OF STUDY
Findings from an authentic study of this nature are expected to contribute immensely to our educational and agricultural policies and prospect in West African. It would also assist formers and business men who are opportune to read this research work in their business activities. It would bring about increase in exportation of farm product hereby make life conformable in Nigeria.
Managers of agriculture business will be able and also have a wide range of solution to deal with agricultural financing in rural development. Agriculture is very important in man’s everyday life particularly in providing food for individual providing revenue for formers and the agriculture sector generate a sizable point of the national income and can also contribute its quota to the success of the student in our institutions.
DEFINITION OF TERMS
This research topic has some very key words which call for treatment before anything else.
Agriculture: This is a sector of economic achinilyes which provide human with some of their needs. Or the science and practice of captivating the land and keeping animal for man’s use.
Authentic: Genuine know to be true
Financing: The management of money
Prospect: Way of soling problem
Export: Selling goods to another country
