WHY IT IS DIFFICULT GETTING CREDITS FOR AGRICULTURAL ACTIVITIES IN NIGERIA

Agricultural Credit or Loan is money or materials borrowed for agricultural activwity with the aim of paying back on a future date. The need for credit in agriculture is very important for a succesrful food production policy of any nation. Goverments in most poor countries has implemented various agriculvral schemes over the years; without achieving the purpose for these schemes. There are a lot of problems making it difficult for credits from these schemes getting to the rural and poor Farmers for the purpose of agricture. Below are some reasons: 1. Market System - The Market system is not developed in these countries. Farmers don't get the right value for their produce. Poor prices affect the capital base of these Farmers. Most times, they make losses. There is no encouragement to borrow as paying back is difficult. 2. SUBSISTENCE FARMING - This should develop to commercial farming, but due to comlex social, cultural, political and economic reasons most of the farming systews are still subsistence in poor countries. Most Farmers in these countries don't venture into agricultural credits. 3. FARM LOSSES - Lack of developed storage facilities especially for perishable produce and the poor transport system among ouher factors cause farm losses and farmers are unable to build a strong capital base. 4. HIGH RISK FACTOR - Uncertainty in agricultural credit . Since credit business is for profit making most Creditors are not prepared to give loans that cannot bring good returns and most poor Farmers are not prepared to take risk of losing the little gains from their harvest. So Agricultual Credit Business is not a very successful businnes in these countries. 5 .POLITICAL - Credit from most Goverment credit programs end up in the hands of those who are not genuine Farmers, while some genuine Farmers divert these credits to other purposes 6. LACK OF INFORMATION - Most Farmers are not informed when and where to get available credit. 7. ILLITERACY OF RURAL AND POOR FARMERS 8. LACK OF COLLATERAL WHEN DEMANDED 9. NO GOOD FARM RECORDS - It is difficult to access those Farmers who don't keep records. 10. INADEQUATE FINANCE - Goverment programs for agricultural credits never have enough financial allocations. This is one of the reasons for small number of beneficiaries. And there is no provission to continue and sustain these programs. 11. DELAY - There is a lot of delay before credits get to Beneficiaries of Goverment agricultural credits. Most times the farming season is over before such credits get to the Farmers. 12. HIGH INTEREST RATES - In most poor countries profits from agricultural produce can hardly meet up with the high interest rates on commercial loans.