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THE ROLE OF COMMERCIAL BANK IN FINANCING THE AGRICULTURAL SECTORS

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

In the immediate past decade and this present decade, there have been seminars, conferences, articles, Journals and various publications by both local, national and International Organizations on the sharp decline in Agricultural production on these various programmes, some of these workshops, conferences and seminars include the followings.The 13th Annual workshop of the South – West Research Extension Farmers impute Linkage system (REFILS) helped at the Institute of Agricultural Research and Training (I.A.R.T), Moor plantation Ibadan in March 2000 with topic “Adaptive Research and Method in Agriculture”. - An Annual conference Organized by Agricultural Extension society of Nigeria (AESON) held at university of Ibadan Conference Society of Nigeria Centre, Ibadan on 10 – 12 April, 2000.

They emphases on the need to promote agricultural production to reduce the unguided population explosion which is at  geometrical progression (G.P) while Agricultural production was only growing in an arithmetical progression. These seminars, workshops, conferences also reminded the populace world wide of the impending danger posed by the continuous deforestation practices of our forest reserve, bush burning, over grazlng, continuous coming and other environment gradation hazards. They panted out little or on concerted effort are made in replacing the deforested areas. They called on the need to embark on a national forestation scheme and forest conservation In Nigeria, there bad been various campaigns for to inhabitants nationally to plant at least one tree crop in his vicinity annually (tree planting compaign) All these would have been uncalled for but for the indispensable role played by agriculture in Nigeria economy, justly this project work, Agriculture sector in developing and under – developed countries. It provides foods required for the teeming population in both the rural land populace. It also provides raw materials for our agricultural industries like Cotton to our textile industries.

Agriculture provides employment for about 60% of the labour force in developing countries. Agriculture also provides incomes to individuals, states, and the nation, to the peasant farmers and traders aluce. It provides money as income and means of live holds to the farmer who sells this farm wares to the populace. To the states, like Enugu state the cashew plantation at Ohhe not only provides raw materials to industries but also provide income to the state government and to the nation, it provides a means of export, thereby learning foreign exchange and consequently reducing the chorus balance of payment deficit prevalent in these region.  In 1969, Agriculture contributed 31% the cross Dmester product (GDP) in sierra Leone, 1957, it contributed over 61% to GDP in Nigeria and in the year 2001, proceeds from sales of grain (Agricultural product) in Nigeria amount to over N2.5N Billion (CBN Bullion Jan / March 2001) The percentage contribution of Agricultural sector to the national has seen declining since when the petroleum sector started contributing heavily to the national income. Presently, agriculture has assured a wider scope as against those days when agriculture was viewed as a narrow feed which includes the propagation of seeds and crops and the rearing of animals for man use. This does not fully inculcate all the relevant aspect of agriculture. Some agriculture in of seeds and crop, include souring and buying of farm input like seedlings machinery’s etc and the selling of its output (agricultural marketing) and the use and provision of credit in agricultural – financing). This later view is more prevalent now especially among the literate populace. The use and provision of agricultural credit will equally assist us in appreciating the role of commercial banks in financing agricultural project in Emugu state their problems and prospects. This forms the course of this project.

1.2    STATEMENT OF THE PROBLEM

The major concern of this study us to know from the lender (First Banks as the Commercial Bank) and the recount (Farmers and Agriculturists) loan effectively agricultural project are Financed in Enugu State a result of the  indispensable role of commercial banks. Since  the establishment of the bank in 1894, they has been carry out financial assistance to agriculturist.  Farmers encounter various difficulties when trying to get financial aids from commercial banks  - some of these difficulties are as follows:

(i)  Agriculturist / Farmers do not get financing aids such as Bank Loans / credit when they need it.

(ii)  Commercial banks granting loan to farmers due to adequate collateral for such loan .        

(iii)  Illiteracy among the farmers also create a very difficulties because of this farmer do not o to banks to receiving advisory services which might help then to increase their productivity.

1.3   PURPOSE / OBJECTIVE OF THE STUDY

1.   To find out whether carrying out feasibility studies for agricultural project is one the roles commercial banks plays in the financing of Agricultural projects in Enugu state.
2. To investigate whether provision of credit facilities to farmers is one of the first banks play in financing of agricultural projects in Enugu state.
3. To find out whether opportunity of safe custody of fund is one of the roles which First Banks play in financing of Agricultural projects in Enugu stare.
4. To find out whether provision of financial lease to farmers in Enugu state is one of the roles First Banks play in financing of agriculturist project in Enugu state.
5. To find out whether rendering advisory services to farmer is a role which First Banks plays in financing Agricultural project in Enugu state from 1999 –2003.

1.4     RESEARCH QUESTIONS

1. Is carrying out feasibility studies for Agricultural project one of the roles of commercial banks play in financing agricultural projects in Enugu state ?    
2. Is provision of credit faculties to farmers one of the roles of the First Bank play in financing of Agricultural project in Enugu state ?                                      
3. Is commercial banks in general and first bank in particular save funds realize by farmers in Enugu state.
4.  Is provision of financial lease to farmers in Enugu state one of the roles First bank play in financing of agricultural project in Enugu state.
5.   Is rendering of industry services to farmers in Enugu state one of the which First bank in particular and commercial bank in general play in financing of agricultural projects in Enugu state 1999 –2003.

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