CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Agriculture involves the cultivation of land, raising and rearing of
animals and raw materials for industries. It involves cropping live stock,
forestry, and fishing, processing and marketing of these agricultural products.
Food is man‟s most important basic need before those of clothing and
shelter. It is provision therefore, has been the major concern of man from the
past years since it is both an essential condition and sinequanon to life.
Agriculture being the provider of food can then be concluded as the life wire
of any nation and thus be concluded as the life wire of any nation and thus its
importance cannot be over emphasized.
When Nigeria gained their political Independence in 1960, agriculture
was dominant sector of the economy. It contributed over 65% of the country‟s
Gross Domestic Product (GDP) and provided the bulk of the foreign exchange
earnings through the foreign exports of the cash crops. The sector catered
adequately for nearly all food requirement and raw materials
for industry in the country. Agriculture
performs a number of functions in an economy such as:
1.2 STATEMENT OF THE PROBLEM
Nigerian agriculture is confronted with many problems which ranged from
low yield to low productivity and inadequate facilities among others. Oyatooye
(1981) was on the same path when he noted that the problem of agriculture in
Nigeria can be discussed under four headings.
I. Technology
II. Marketing
III. Finance and Government
Such problems include problems of providing adequate extension
services, agricultural inputs, storage facilities, agricultural credit,
marketing information and efficient marketing arrangement, infrastructures such
as feeder roads efficient power supply and institutional reforms where
necessary. William (1981) pointed out that, the major problems facing Nigeria
today are the needs to transform her agricultural industry from one traditional
input with low productivity to one which enables her to meet the rising
expectations of her people and to correct the social and economic
imbalance created by lopsided development
between her rural and urban areas which have encouraged the youths and others
to migrate from rural areas.
His statement is a valid one as when it was made from we have seen, the
Nigerian economy is characterized by a high degree of rural to urban drift in
search of greener pastures leaving the farm land to old aged men who are unable
to provide all the food requirements of the growing population. This is
responsible of the growing population. This is responsible for the high cost of
food as there is pressure on the little produced.
Adekanye‟s assertion (1988) when he stated that: it is a common
knowledge that present farmers and artisans who the back of the rural
population do not get adequate and timely loans from financial institutions and
they have no collateral and equally they do not get supplies of raw materials
of standard quality even at the market place as they come under the ditches of
rich farmers and sellers in the urban areas. The need for setting up of rural
based commercial banks is very urgent.
1.3 OBJECTIVE OF THE STUDY
The main objective of this study is to assess the role of the
commercial banks in agricultural development in Nigeria from 1986-2009.
Specifically the study tends to be achieving the following objectives.
I. To access the scope and achievements as
well as highlight new role of Nigerian Commercial Banks to Agriculture.
II. Identify the inherent problems of
agricultural financing which have hindered the smooth flow of credit from banks
to agriculture.
III. To offer solutions to identified problems.
1.4 HYPOTHESIS OF THE STUDY
The hypothesis guiding this study are of two type H0 which is the null
hypothesis and H1 which is the alternative hypothesis H0 is that the Banking
Industry has played an important role in agricultural development in Nigeria.
H1: is that the Banking Industry has not played an important role in
agricultural development in Nigeria.
1.5 SIGNIFICANCE OF THE STUDY
This study is useful in many ways.
Firstly, Nigerian farmers can know the type of credit or assistance
offered by Nigerian Banking Industry and the benefit from them.
Secondly, it will help to update knowledge on
how the banks especially commercial banks in Nigeria, thus making it useful for
other researchers, schools and readers.
Thirdly, it will enable the Nigerian government to take advantage of
the suggestions and more result oriented policy towards boosting agricultural
production in Nigeria.
Finally, the salient findings of this study will also make the farmers
to be more result oriented in agriculture.
1.6 SCOPE AND LIMITATION OF THE STUDY
This study covers the period between 1986-2009; it will be an oversight
to think that study such as this will be accomplished without impediments and
constraints. Much as it seems incontrovertible that odds will be imminent there
are some glaring inexorable cases.
Some respondents to interviews are always simplified and simplify in
relating information to researchers.
Again, to think of development only in terms of increasing agricultural
output is an under statement.
There is also the clamored non-existence of
relevant and indispensable literature as versatile as possible.
The limitation put together explains why the research is scaled down from 1986-2009
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