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PROJECT TOPIC: THE ROLE OF CENTRAL BANK OF NIGERIA IN AGRICULTURAL FINANCE DEVELOPMENT, PROBLEMS AND PROSPECTS

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Agriculture is defined as “the cultivation of land for the purpose of producing food for man, feed for animal and fibre or raw material for industrial companies.  It also includes the processing marketing of crops.  In other words, it embraces all activities involved in the primary and controlled production of plant and animals, such as fishing, forestry, farming, livestock, poultry and small scale industries connected with processing of agricultural products.

The agricultural sector forms the background of Nigeria economy despite concerted effort in industralisation.  Agriculture occupies the pride place as the source of livelihood for over 70 percent of the population.  It is recognized as a pre-requisite to economic development.  With large scale dependence on agriculture for food, raw-material for industries etc, one would expect production to increase, rather it is disheartening to note that this is not the case.  Agriculture has suffered some neglect due to lack of investment since the inception of oil boom in 1970.  In fact, Nigeria is experiencing a decline in the space of agricultural production in general, this situation is causing a great concern to the government.  Throughout the 1960s, Agriculture contributed 61.5%.  in the 1970s, it declined miserably be 2.3%.  This decline may be attributed to the domination of the nations export by oil since 1970 which accounted for 57.6% of total export income and rose steadily, attaining an overwhelming proportion of 98% in 1981.  As a result there was an absolute neglect in agriculture to both God (Gross Domestic Product) and export earnings which has been the major factor dictating the need to reactivate our agricultural products.  The need for this re-activity and in effort to revamp this sector has been the reason for raising budgetary allocation in recent years to it.  It rose from 6% in 1970s to 22% in 1984.  this increase acts as incentive and motivation to farmers, but these farmers while engaging in these agricultural ventures are exposed to a lot of problem like diseases and pest attacks, fire destructions, industrial pollution, machinery breakdown and other problems.  To these problems, the farmers need some aids in solving or minimizing them.


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