Financial Allocation in Agricultural Sector in Nigeria

Abstract

Agricultural finance is basically related to agricultural development. It is based on the economic belief that agricultural development is a process that involves adoption by farmers of new production practices and the acquisition of new input materials. Unfortunately, the rural capital market cannot supply the needed funds to finance such innovations. As a result, agricultural development in Nigeria as in similar developing nations is stunted. The problem of agricultural finance then becomes that of finding adequate fund for agricultural development, identifying the right farmers who could benefit from such fund, extending such fund to the right section are the Nigerian farm credit corporation and the new programmes. The Nigerian Agricultural Cooperative and Rural Development Bank (NACRDB) has been restructured and is being recapitalized for greater efficiency and to provide credits to individual farmers, cooperative societies/bodies for all classes of agricultural projects. The bank is also concentrating on the promotion of its popular “group lending scheme” whereby a much higher proportion of the active farming population is being reached by its retail outlets across its six zonal offices.