COOPERATIVE AND AGRICULTURAL FINANCING. (A CASE STUDY OF ABIA STATE).

ABSTRACT

This study is an analysis of cooperative and agricultural financing in Ikwuano local government area of Abia State. The objectives were to ascertain the capital reserve of cooperative societies and to determine the sources of finance for cooperative society in the area. To determine the extent to which cooperative societies have improved farmers access to financial capital in the study area.

Three communities were randomly selected and five (5) cooperative society were equally selected and data were solicited with the use of structured questionnaires. Also data were collected on such variables as socio-economic characteristics and management practices. Data were analysed using simple descriptive statistics such as chi-square and survey method were adopted, all geared towards gathering information as regards to how cooperative and agricultural financing are being done in those areas.

Also, in every organization be it profit oriented or non- profit oriented organization, finance is the life wire of such organization. Likewise, in every sector of the economy like agriculture and cooperative society as for the purpose of this research work, finance is very essential. In the course of this research work, we will identify and highlight various ways and methods in which this society is being financed. The system of going for long and short term borrowing has gone a long way in helping the cooperative and agricultural movement in that area, often times, the government through the ministry of Agriculture and ministry of cooperative in collaboration with chambers of commerce and industry do give their maximum assistance for the development and growth of the society. In the same vain, lack of adequate financial assistance can lead to big problems and constraints and as a matter of which poor service to its society and the public at large. 

TABLE OF CONTENTS

Page

Cover page

Title page                                                              i

Certification                                                           ii

Dedication                                                             iii

Acknowledgements                                                 iv

Abstract                                                                v

Table of contents                                                    vi

CHAPTER ONE

1.0  Introduction                                                    1

1. General Overview of the study                           1
   1. Statement of the problem                                 2
   1. Objective of the study                                      3
   1. Scope of the study                                           4
   1. Test of Hypothesis /Questions                                  5    
   1. Significance of the study                                          6
   1. Limitations of the study                                    6
   1. Definition of terms                                           8

CHAPTER TWO

• Literature Review                                             10

2.1  History of cooperatives                                     11

2.2  Formation of Cooperatives                                13

2.3  Goals of cooperatives                                       14

2.4  Types of cooperatives                                       15

• Importance of cooperative financing                   19
  • Benefits of cooperative and agricultural financing 19
  • Sources of funds in cooperatives                        20

CHAPTER THREE

3.0  Research Methodology                                      25

• Introduction                                                    25  
  • Research design                                              26
  • Sampling design                                              26
  • Method of data collection                                         27
  • Procedure for processing data                                  27

CHAPTER FOUR

4.0  Presentation and analysis of data                       29

4.1  Presentation of data                                                29  

4.2  Analysis of data                                               31

4.3  Test of hypothesis                                           32

CHAPTER FIVE

5.0  Summary, Conclusion and Recommendations             36

5.1   Summary                                                       36

5.2  Conclusion                                                      37

5.3  Recommendations                                           38

       Bibliography                                                 40

          Appendix                                                                                42

CHAPTER ONE

1.0  INTRODUCTION

1.1  GENERAL OVERVIEW OF THE STUDY

       Agriculture is the oldest industry known to mankind and it is the source of our food and raw material for many industry (Lot, 1985), infact, it can be justifiably referred to as the worlds primary industry (Lot, 1985). At more than 25 years after the country’s political independence, it is a paradox that Nigeria agriculture still manifests the typical symptoms of a peasant agriculture, the farms are small averaging less than five (5) hectares of land and accounting for over 90 percent of the total production, the farming population is itself rapidly going down, with attendant deterioration in the vigour and stability of the human labour, the  primary production suffers from irreversible rural and urban migration which contributed to the depopulation of the country side thereby making labour more scare and thus more expensive, the livestock industry is dominated by nomadic herdsmen while the fishing sectors is essentially artisans, the forestry resources which are the bounties of nature suffer from massive exploitations without regeneration (Ijere et al., 1988).

       The result of that is low productivity and slow rate of growth which is between (1980-1985) has been put at one percent per annum. For an economy which is heavily skewed inferior of primary production, this growth rate will hardly be seen as impressive. The cause of this is stagnation in the agricultural sectors which is so numerous and varied as they are complex. It has been argued that the oil “syndrome” has undermined the performance of the agricultural sector by accelerating the shift of labour, capital managerial talent to other industries (Ijere et al., 1998). Also the past urban basis for public policies enhanced the productivity of investment in non-agricultural commodities to the detriment of investment in the agricultural sector (Ijere et al., 1998).

1.2  STATEMENT OF THE PROBLEM

The problem associated to cooperative and agricultural financing has caused a lot of harm than good in the industry and commercial sector. The major ones are the inadequate funds to execute a project in the rural areas. As a matter a fact farmers who live virtually below the subsistence level and have no real connections with the people that matter in the community or society have no tangible assets to bank or government grants. Presently the locations of commercial banks are almost confirmed to the urban areas. Being profit oriented, those commercial banks tend to favour their concentration on their branches alone which is the urban areas where business is booming (Ijere, 1985).

A pertinent question to ask then is at a micro level, are the rural areas’ industrialists and farmers doomed to external acute shortage of funds.