IMPACT OF AGRICULTURAL FINANCING ON THE AGRICULTURAL OUTPUT IN NIGERIA


IMPACT OF AGRICULTURAL FINANCING ON THE AGRICULTURAL OUTPUT IN NIGERIA  

ABSTRACT

This study examined the effect of agricultural financing on agricultural output in Nigeria.This study is necessitated by the fact that agricultural practices have not been given full attention they deserve in Nigeria knowing truly that the country by nature is gifted in agriculture and its neglect is our bane in terms of food production and revenue yield. The research relied on secondary data that was used, which concentrated on banks credit and Government funding of the agricultural sector within the time frame of 1980 to 2015.In this analysis,annual time series,unit root test, co-integration, CBN statistical bulletin, ordinary least square (OLS) and Augmented Dicker-Fuller(ADF) where part of tests used. Based on the results obtained, the estimated results showed that there was a positive and significant relationship between agricultural credit guarantee scheme fund and agricultural output in Nigeria.This means that an increase in agricultural credit guarantee scheme fund could lead to an increase in agricultural output in Nigeria.Again,there was a positive and significant relationship between government expenditure on agriculture and agricultural output in Nigeria. This is because an increase in the rate of interest charged farmers for funds borrowed discouraged many farmers from borrowing and thus less agricultural investment. At this end, there was the need for the government to continue to guarantee loans lent to farmers as this would encourage the banks to lend more to farmer

TABLE OF CONTENT

TITLE PAGE i

APPROVAL PAGE ii

DEDICATION iii

ACKNOWLEDGEMENT iv

TABLE OF CONTENT v

ABSTRACT x

CHAPTER ONE: INTRODUCTION

1.1 BACKGROUND OF THE STUDY 1

1.2 STATEMENT OF THE PROBLEM 5

1.3 RESEARCH QUESTIONS 6

1.4 RESEARCH OBJECTIVES 6

1.5 RESEARCH HYPOTHESIS 7

1.6 SIGNIFICANT OF THE STUDY 7

1.7 SCOPE OF THE STUDY 8

CHAPTER TWO: LITERAURE REVIEW

2.1INTRODUCTION9

2.2 THEORITICAL LITERATURE 13

2.3 EMPIRICAL LITERATURE 31

2.4 SUMMARY OF THE LITERATURE 37

CHAPTER THREE: RESRECH METHODOLOGY

3.1 METHODOLGY 39

3.2 THEORITICAL FRAMEWORK 41

3.3 SPECIFICATIONS OF MODEL 43

3.4 EVALUATION TECHNIQUES 43

CHAPTER FOUR: PRESENTATION ANS ANALYSIS OF RESULTS

4.1 ANALYSIS OF UNIT ROOT AND CO-INTEGRATION RESULTS OF MODEL I 45

4.2 IMPACT OF GOVENMENT AGRICULTURAL ON THE AGRICULTURAL PRODUCTIVITY IN NIGERIA     47

4.3 EVALUATION BASED ON ECONOMIC CRITERIA 47

4.4 EVALUATION BASED ON STATISTICAL CRITERIA 49

4.5 EVALUATTION BASED ON ECONOMETRICS CRITERIA 50

4.6 REGRESSION RESULTS 52

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND        RECOMMENDATION

5.1 SUMMARY 83

5.2 POLICY RECOMMENDATION 84

5.3 CONCLUSION 85

REFERENCE

CHAPTER ONE

 INTRODUCTION

1.1 Background of the Study.

Agricultural financing is a financial service ranging from short, medium and long- term loans, towards production and livestock insurance which covers the entire agricultural chain. Agriculture which can be defined as the activity of man for the production of food, clothing and the optimum use of terrestrial resource. 

Agriculture been stated as the back bone of Nigerian economy and the most important human economic activity. However, agriculture is originated from a Latin word 'Ager' means "field”, soil and 'Cultura' means "cultivation" which deals with the science, art or practising the cultivation of the soil, production of crops and raising live stocks and management of its products. 

The importance of agriculture in increasing the food supply for Nigeria’s teeming populations, providing adequate raw materials for agro–based industries, employment, capital and foreign exchange for economic development calls for banks and public sector’s partnership in agricultural financing for increased output. 

Nigeria’s quest for food security and self sufficiency will remain unrealisable if the country’s agriculture continues to rely on peasant farmers for agricultural financing. This is why successive Governments and banks in Nigeria have adopted various policies, programmes and actions to increase the flow of financial resources to the agricultural sector, in order to increase that sector’s output for self sufficiency. Self sufficiency in food production has engaged the attention of successive governments in Nigeria since the independence in 1960. This is because no country can claim to be either economically or politically sovereign if it cannot feed its people. However, judging by the growth rate of the agricultural products, the sector cannot be said to have performed optimally. 

To achieve the objective of this research, the appropriate agricultural finance policy and strategy must be adopted by the country and measures to intensify the role of financial institutions in accelerating the development of Nigeria’s agricultural needs to be given urgent attention especially in this era of global food crisis. Towards this end, the paper in section two discusses the literature review. Section three and four contain the methodology, results and discussion of findings while Section five is the conclusion and recommendations. In order for Nigeria to successfully diversity its economy and avoid the consequence of depending just on petrol, new innovation should be introduced to boost the agricultural sector as following steps;

Agricultural output in Nigeria can be influenced amongst other factors by Government policy framework in such areas as Central Bank of Nigeria, Bank Credits Guild Lines and Budgets Allocations; and it’s financing remains the mainstay of the economy since it is largest sector in term of its share in employment. 

As the watchdog of the economy; Nigeria is placing much emphasis on financing other sectors most especially agricultural sector since agriculture has the potentials to stimulate economic growth through provision of raw material, food, jobs and increased financial stability (Obansa and Maduekwe 2012).

It follows that financing agriculture is one of the most important instrument of economic policy for Nigerian, In her efforts to stimulate development in all directions, finance is required by agricultural sector to purchase land, construct building, acquire machinery and equipment, hire labor, irrigation etc. In certain cases, such loans are needed to purchase new appropriator technologies. Adegeye and Dittohs (1985) gets it insights as the economic study of acquisition and use of capital in agriculture to help in its output in Nigeria.

In recent years, Nigeria has been a land with agriculture, yet the sector still accounts for a significant proportion of her gross domestic products. Agriculture is the leading sector in accounting about 63 and 54 percent to GDP especially in the 50s and 60s respectively (Aigbokhah, 2001). The sectors share in gross domestic product though fell in the post oil boom period, maintained yet persistent increase. For instance, between 1970 and 1980 the share of agriculture in real gross domestic product (RGDP)in Nigeria arranged 29.2%, it was 33.3% between 2001 and 2009; 

World (2007) opines that in Nigeria Agriculture is estimated to be largest contributor to non-oil foreign exchange earnings. This means that it holds the abundant potential enhancing and sustaining the country's foreign exchange. (Food and Agricultural Organization (2006) observed that agriculture contributes immensely to the Nigeria economy in various ways: provision of food for the increasing population, supply of adequate raw material sector, a major source of employment, generation of foreign exchange earnings and provision of a market for the productivity supports. The possible way forward among others, include the provision of finance. Farmers need access to cheap finance and not to be forced to borrow at sky-high interest rate from local money lenders: it can achieve by salting up moral bank - Specializing in the provision of finance to small farmers. Various measures have been adopted in insurance of these objectives in recent years. These include conveyance of credit to agricultural sectors at its interest rate, establishment of agricultural financial institutions and introducing finding schemes. 

Also in the recent time in country, following the Central Bank of Nigeria C.B.N (2010) animal growth rate of agriculture dropped from 55.2% in 2002 to 7.4% in 2006, which however, this research will focus on using variable like commercial bank loan to agriculture and loan guarantee to agricultural finance have impacted of agricultural output in Nigeria and its welfare.

1.2 Statement of the Problems

It is obvious that no aspect of the economy will do well without proper financial intermediation from the financial system of the agricultural output. However, the problems that give rise to this study are lack of loan to agricultural sector by commercial bank in Nigeria etc. There is high interest rate on agricultural Loan in Nigeria and the problem of low performance of the agricultural credit guarantee scheme fund which has lefty aims especially the need to make agricultural sector lucrative but it has not lift up his bidding, this calls to empirical assessment with a view to understanding the resultant effects from the huge investment from the government into this sectors. The vast employment opportunity and the quest towards diversification of the revenue sources by the federal government and development agencies have shifted attention towards the informal and agricultural sectors. For instance, example to sustain this agricultural production in Nigeria, the World Bank developed a project allied agricultural development project (ADPS) which was designed to enhance the production of agricultural productivity in Nigeria.

1.3 Research Questions

1. What is the impact of agricultural credit guarantee scheme funds on agricultural output in Nigeria?

2. What is the impact of government expenditure on agricultural output in Nigeria?

3. What is impact of commercial bank credit to agricultural output in Nigeria?

1.4 Research Objectives

The major objectives of this work are to determine the impact of agricultural financing on agricultural output in Nigeria.

1. To evaluate the impact of agricultural credit guarantee scheme funds on agricultural output in Nigeria

2. To ascertain the impact of government expenditure on agricultural output in Nigeria.

3. To determine the impact of commercial bank credit to agricultural output in Nigeria.

1.5 Research Hypothesis

The following hypotheses were formulated after the order of the research objectives to include:

H0. Agricultural credit guarantee scheme funds have no significant effect Agricultural output in Nigeria.

1. Government expenditures have no significant effect on agricultural output Nigeria. 

2. Commercial bank credit has no significant effect on the agricultural output in Nigeria.

1.6 Significant of the Study

This study is significant in the sense that it will reveal how agricultural financing can contribute to the growth of agricultural products. if proper attention is given to agricultural output through the financing system it will guide policy makers such as government and private sectors in making polices that will help the agricultural endeavors. This study will be useful to the student of economics, banking and Farmer etc. As it will aid in them for research.

1.7 Scopes of the study

This study is aimed at accessing the impact of agricultural financing to agricultural output in Nigeria, ranking from 1980 to 2015, which captures the extent to which agricultural have improved on agricultural output; through stimulating economic growth. Through our findings it stated that agricultural output will always fluctuate and is not constant, which will always increase at a certain year and also decrease at a certain year. 

.


TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.COM

Researchwap.com is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.com guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.com is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.com" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.