Agricultural Loans, as Catalyst for Food Production in Nigeria: The Problems and Prospects

Abstract

The global demand for food is on the increase as a result of the growing world population. Many governments of the developing economy, Nigeria being one of them, have recognized these facts and have initiated various policies to ensure that loans are granted to agriculture. In recognition of the vital role agriculture plays in food production, the Nigerian government has established specialized banks and agricultural funds to carter for the financial needs of Nigeria farmers. However, the problem is the method of food production. Mechanized farming which ensures large-scale production is capital intensive, considering the assertions that agricultural loan is a sine qua non to food production. Therefore, this paper evaluates the impact of these agricultural loans on food production, the problems and prospects. Data for the study were sourced through secondary means and hypotheses formulated in order to attain the objective of the research. The data were analysed with SPSS (multiple regression) and formulated hypotheses tested with F-ratio and student t-test. Findings revealed that agricultural loans have significant and positive impact on food production in Nigeria. Hence, there is need to increase and sustain the amount of credits disbursed to the sector if the rate of food production is to meet with the pace at which the population is growing.