A Review of Agricultural Finance Policy Development in Nigeria
This paper concentrates on a review of agricultural finance policies and the role of credit on agricultural development in Nigeria. It is well known that agricultural financing is the life-blood and nerve centre of agri-business enterprise with which all other inputs would be procured. It is in recognition of the role of finance in agricultural production that the Nigerian government has over the years formulated agricultural finance policies, programmes and institutions meant to encourage food production and better the lives of farmers. These agricultural finance policies, programmes and institutions are highlighted and discussed. The role of credit in agricultural development is crucial and its constraints can affect farmer’s investment behaviour. It is found that loan beneficiaries often obtain more farm income than non-beneficiaries. Generally, small scale farmer’s low access to credit facility is due to the requirement for collateral and the perceived high risk and uncertainty of agricultural production. The paper recommends that since farmers constitute the majority of population of Nigeria, they deserve government attention through the provision of incentives, particularly finance, in the form of credit. It is also recommended that policies geared toward diversification of agricultural credit activities should be encouraged in order to minimize risk and specialised staff should be allowed to handle loans granted to farmers so as to avoid default.
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