A STATISTICAL STUDY ON THE EFFECTS OF AGRICULTURAL LOANS ON FARMING ACTIVITIES IN NIGERIA

CHAPTER ONE

1. INTRODUCTION

Since the discovery of crude oil in Nigeria, farming has been plagued by inconsistencies and relegation. Agriculture is a vital sector of the Nigerian economy. Its importance in economic development cannot be overstated; according to Umar (2004), agriculture accounted for 40 to 60 percent of national income between 1960 and 1976 alone, and agriculture employs 50 to 80 percent of the labor force. Agriculture plays important roles in Nigeria’s economic development. These are to increase food supply for domestic consumption and export, as well as to create more jobs.

Despite its critical role in the country’s economy, agriculture has had its fair share of problems, leading to decline and poverty.

performance in agricultural sector. The primary issue is a lack of adequate funding.

Agricultural activities in Nigeria have been steadily declining as a result of increased government and other corporate financing, such as commercial banks. Previous governments in Nigeria have made efforts to resuscitate agriculture activities in Nigeria by making provisions for loans so that agriculturists, the vast majority of whom are ordinary Nigerians, can access these loans to improve their production base and employ labor. When it comes to getting these funds to the actual rural farmers who are in desperate need of this assistance, agricultural financing in Nigeria has proven to be fairly successful. The impact of an adequate agricultural loan on agricultural activities cannot be overstated. over emphasized. A lot of things must be done correctly for the agricultural loan system to be effective again. Agricultural loans are viewed as a catalyst that activates other production factors and makes underutilized capacities operational for increased output (Ijere, 1998). Thus, agricultural loans play an important role in agricultural and rural development because they enable farmers to reap economies of scale, venture into new fields of production, employ new technologies, and provide utilities to a growing market.

1. Statement of general problem

Because the majority of these farmers are rural dwellers, there hasn’t been a defined way of properly financing agricultural activities in a developing country like Nigeria. Another issue is the difficulty these farmers have in obtaining government loans because the majority of them are peasants. A major issue that prompted us to conduct this research is determining the percentage of success recorded in assisting farmers, particularly those in villages, with loans. Another major issue is determining whether increased agricultural loan assistance would actually reduce unemployment and increase productivity.

1.2. Aims and Objectives of the study

The primary goal of this study is to determine the level of success recorded in assisting rural farmers to increase productivity.

To learn about the challenges those farmers faced when evaluating these loans

To learn which institutions have been particularly helpful in assisting farmers to increase productivity.

To determine whether increased assistance would result in an increase in employment and productivity.

To determine whether there is a link between agricultural credit or loan and productivity in Nigeria. We’d also like to know the nature of this relationship, if it exists.

To determine whether there is an equal relationship between agricultural loans and employment levels in Nigeria. We are also interested in the nature of this relationship (if it exists).

1.3. Significance of the study

The importance of this study is to determine the level of success in assisting farmers in rural areas.

Another important aspect of the study is determining whether there is a link between increased government financial assistance and increased productivity. The following are the study’s other implications:

a) How are loans made available?

b) What are the causes and consequences of loan repayment default?

c) What methods has the bank devised for loan recovery?

d) What difficulties have farmers had in obtaining these loans, and what is their attitude toward repayment?

e) Do farmers enjoy evaluating these loans in general?

f) To understand how successful agricultural financing has been in recent years, as well as the reasons for this success.

g) Is sufficient

Does agricultural funding boost employment?

h) How do agricultural loans stimulate farming activity?

1.4. Scope and limitation of the study

This research focuses on the impact of agricultural loans on farming activities in Nigeria, with a case study of the ohaofia local government area in Abia state. Another goal of the research is to determine the relationship between agricultural loans in Nigeria and employment, as well as the level of satisfaction of the end users of these loans.

Limitation

It is important to note the limitations of this research work, the most significant of which is the difficulty in administering the questionnaire in the ohaofia local government area; respondents’ responses were not as expected in that some information was required but was not provided.

Despite the limitations mentioned above, it is hoped that this research will be useful to the Nigerian government, its citizens, farmers, and agricultural organizations who may be interested in this work.

1.5. Definition of terms

A loan is money that an organization, such as a bank, lends to someone or a group of people.

Agriculture: Farming science or practice.

1.6. Research Hypotheses

The following are the research hypotheses:

1ST HYPOTHESIS

H0: In Nigeria, there is no significant relationship between the agricultural loan system and employment levels.

H1: In Nigeria, there is a significant relationship between the agricultural loan system and the level of employment.

0.05 is the level of significance.

If the p-value is less than the level of significance, reject H0. Otherwise, accept H0.

We’d also like to know the nature of this relationship, if it exists.

HYPOTHESIS NO. 2

H0: In Nigeria, there is no significant relationship between the agricultural loan system and agricultural output.

H1: In Nigeria, there is a significant relationship between the agricultural loan system and agricultural output.

0.05 is the level of significance.

If the p-value is less than the level of significance, reject H0. Otherwise, accept H0.

We

are also curious about the nature of this relationship (if any)

3RD HYPOTHESIS

H0: In Nigeria, there is no significant relationship between the agricultural loan system and farming activities.

H1: In Nigeria, there is a significant relationship between the agricultural loan system and farming activities.

0.05 is the level of significance.

If the p-value is less than the level of significance, reject H0. Otherwise, accept H0.

We are also curious about the nature of this relationship (if any).