Role Of Financial Institution In An Agricultural Development

INTRODUCTION
Background of the Study
Agricultural sector is a major part of economic enhancement and development of any nation, as it is the hob of all economic activities which invariably helps to enhance other developments. It provides competence for individuals to become trained farmers and at the same time equip them with the necessary skills to be self reliant and able to face the challenges of the prevailing economic change.
However, agriculture has four major roles to play in economic development. These are, to increase the supply of food for domestic consumption, to release labour for industrial output, to increase the supply of domestic savings and to earn foreign exchange. The final role that is the ear foreign exchange implies that the country is open to international trade.
Not withstanding the role of agriculture in the country’s economy, agriculture is encountering a lot of problems, which lead to decline and poor performance in agricultural sector. These problems include lack of fund: inadequacies in the supply and use of farm inputs, unfavourable macro-economic policy; land constraints; poor post-harvest technology; environment Harvard: diseases and pest infestation labour constraints; low rate of adoption of appropriate technology; transportation; low income earning etc. infact agriculture in Nigeria is caught in a low level of equilibrium trap.
In the past, attention given to agriculture by government was not encouraging. Farming was pushed to the background and farmers were not introduced to the modern method of farming which would have gone a long way in helping to boost agriculture. Until 1976, during the first Obasanjo regime, alteration was beginning to be given to agriculture with the launching of operation feed the Nation (OFN). The idea behind OFN was that all Nigerians should join hands together to produce food for ourselves and the Nation. Ever since then, successive government have followed with different programmes all aiming at developing agriculture and agricultural projects.
Moreso, government has shown great concern in this wise idea with the establishment of Nigerian Agricultural and co-operative Bank LTD (NACB). This bank, which is an apex up to grant agricultural credit to the agricultural and agro-allied section of the Nigerian economy. This is carried out through the provision of loans to individuals, co-operative organizations, limited liability companies, state and Federal Government Agencies.

Statement of the Problem
In many developing countries of the world, financial facilities are few and far between. In reviewing the evolution of financial markets in Asia, Latin America and African counties, it was asserted that the new financial facilities are clearly needed to external financial carriage especially in Nigeria. In supporting this assertion, it was shown that at ascertain stage in agricultural development, agricultural, credit clearly does become a strong force for further improvement.
Therefore, of the two capital markets (the institutional and non-institutional) available to rural producers, the informal sources is the most extensive suppliers of credit in Nigeria, yet this source has not supplied the amount of credit in terms required by farmers to modernize their farming methods.
Based on the above, these questions arise from the following problems.
1. Why agriculture has be relegated to the background in Nigeria.
2. Why has the government not be ale to salvage agriculture and place it in its rightful position in the economy inspite of its laudable agricultural programmes.
3. Should the low level of institutional credit be attributed to in sufficient funds in effective supervision by monetary authorities and political interference etc.
The above problems are set to help to investigate and analyze the role of financial institutions in agricultural development in Nigeria.

Purpose of the Study
This could be seen in three ways:
(i) To identify the problems of agriculture and its finance in Nigeria?
(ii) To access the role of financial institutions in assisting government to solve the problems that may be identified.
(iii) To propose solution for some of the general problems of agriculture and measure to intensity the role of financial institutions in accelerating and balancing the development of Nigeria’s agriculture, through a modern and more enlightened agricultural policies/programmes.

Significance of the Study
It is obvious that agricultural production especially food is of economic value and develops the entire nation as well. The current problems associated with high cost of production of food cannot be separated from the general health of the economy because of its adverse effects. These problems are of interest not to the government alone, who will prefer a moderate increase in food prices but they are also of great concern to the consumers whose earnings are been eroded by the high prices of food.
However, these pieces of work would inform the farmers and others who would like to get into farming;
(i) The type of agricultural credit finance that is available in the Agricultural Development Bank.
(ii) The conditions for borrowing
(iii) Detail requirement
(iv) How to apply for loan
(v) The problems associated with agricultural lending in Nigeria.
On the whole, the research offers an interesting and a good recommendation that will help government and their agents to face identified agricultural financing problems in Nigeria.

Scope of the Study
This study was indented to bring to light the role of financial institutions in the agriculture development in Enugu and our country, Nigeria. This was supposed to have covered the entire states of the Federation but because of the wide geographical spread of the research subjects and the limited finance to travel personally to these states.
In addition to the poor portal system in the country to receive feedback through questionnaire and within the time limit required writing and submitting this work. Therefore, the information was gathered from the Agricultural Development Bank here in Enugu.

Research Questions
(i) How should loans be granted to farmers in order to assist in agricultural development in the state?
(ii) What are the problems experienced by farmers in the state in getting the agricultural loan facilities?
(iii) Are the Bank staff adequately and properly trained in order to improve relationship with customers?
(iv) What are the remedial measures to be employed to ensure the success of the agricultural financing programmes in the state and entire nation?

Definitions of Terms
Agriculture – It is a cultivation of the soil and rearing of animals. It is also a science and practice of producing crops and livestock from the natural resources of the earth.
Agriculture sector – It is means cheaper food, allowing Tongans to spend money on other products.
Credit Facility – It is a loan or collection of loans taken on by a corporation.