Agricultural Financing SS3 Agricultural Science Lesson Note

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

1. Define agricultural finance
2. State the importance of Agricultural Finance
3. Discuss the sources of Agricultural Finance

AGRICULTURAL FINANCE

Agricultural finance is simply how funds used in the agricultural business are sourced. It is the supply and demand of funds used in the agricultural business for production, processing and marketing activities. 

IMPORTANCE OF AGRICULTURAL FINANCE

1. It enables farmers to adjust to changing economic conditions.
2. It increases efficiency.
3. It encourages farmers to take up new farming innovations.
4. It ensures the timeliness of farm operations. 

SOURCES OF AGRICULTURAL FINANCE

1. Agricultural bank: Agricultural banks such as the Nigeria Agricultural and Cooperative Bank (N.A.C.B) were established in 1973 to grant loans to all potential farmers. Only farmers can borrow money from the bank, hence it is called the Farmers’ Bank”.
2. Commercial Bank: Commercial banks are major sources of lending to agriculture. Banks like First Bank, U.B.A, and Union Bank have agricultural departments where the farmers can get loans to carry out their farming activities.
3. Supervised agricultural credit Scheme: This scheme was set up with the purpose of granting loans to farmers. The scheme is supervised by the Central Bank of Nigeria (C.B.N)
4. Thrift and saving societies: Members contribute money either daily, weekly or monthly. At the end of an agreed period, the money is paid back to the members which they can use for their farming activities.
5. Money lenders: These are people who lend out their money to farmers to enable them to produce. However, the money lender will charge high interest rates and demand security for such loans.
6. Cooperative societies: These are the people who come together to pull their resources (money) together to produce. Members can easily get loans from the societies.  Apart from this, commercial banks prefer to give loans to cooperative societies rather than individual farmers.
7. Government agencies: Farmers can easily get loans from certain government agencies like the National Directorate for Employment (N.D.E) and Agricultural Development Projects (A.D.P) for their farming activities.
8. Self-Finance: This refers to the money saved by an individual which can be used to finance his farming activities.
9. Individuals: Farmers can also borrow money from individuals like friends and relatives to finance a project

EVALUATION:   

1. Define agricultural finance

1. State the importance of Agricultural Finance
2. Discuss the sources of Agricultural Finance

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively