Role Of Central Bank Of Nigeria (C.B.N) In Agricultural Finance Development, Problems And Prospects

BACKGROUND OF THE STUDY
Agriculture is defined as the cultivation of land for the purpose of producing food for man, feed for animal and fiber or raw material for our industries. It is includes the processing and marketing of crops”. In order 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.
Agriculture is one of Nigeria’s largest industry and it does only provide the food and cash crops which are consumed locally and exported to earn foreign exchange, but also employs more than 75% of the entire population, thereby generating revenue to individuals and government.
This goes a long way to increase the ratio of our Gross National Product (GNP).
It is important to note that the present economic predicament of Nigeria could be credited to the drastic fall in the contributions of the agricultural sector. The contribution of agricultural sector to the national economy before independence and the years period after, cannot be emphasized. During this period of per-independence and shortly after words, agricultural products dominated in Nigeria export trade, but today, these products (GNP). Agriculture contribution in the early years of independence (1963 – 1964) was 61.5% throughout the 60s. In the 1970s, it declined miserably by 2.3%. The decline may be attributed to the domination of the nations exports by oil since 1970 and the oil sector accounted for 57:6% of total export income in 1970 and this share rose steadily, attaining an overwhelming proportion of 98% in 1981.
This oil lead to absolute neglect in the both GDP (Gross Domestic Product) and export earnings which has been the major factor dictating the need to reactivate out agricultural products. The need for the re-activation and in effort to revamp this sector has been the reason 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 problems like disease and pest attacks, fire destructions, industries pollution, machinery breakdown and other problems.
To these problems, the farmers need some aids in solving or minimizing them.
Loan, through the Central Bank of Nigeria seems to be one of the solutions to these problems. To deal more effectively with these risks that the farmers are exposed and to encourage the growth of Agriculture Contribution towards our economy; agriculture insurance was introduced and launched in Nigeria on 15th December 1987, by the Federal Government of Nigeria. The scheme at it’s launched in Nigeria in the year has a budgetary allocation of N4.5m, N6.5m was used to set initial expenses and N35m, the initial contribution to the reserve fund. The main farming activities being covered under this scheme are crops (maize and rice) livestock (poultry and cattle). Tangible fixed assets like farm buildings and farmers, employees and dependants.
Following the formal launching, the Nigeria Agriculture insurance Company was established by the Federal Government of Nigeria (Central Bank of Nigeria i.e their agent) to enhance and oversee the operation of the scheme and to underwrite the loans given to farmers by the Central Bank of Nigeria. The scheme was designed to benefit the small, medium and large scale farmers, either in group or as individual producers.
In order to make the scheme a success, the Federal Government of Nigeria through the Central Bank of Nigeria subsidized the premium rate to 59% to enable subsistence farmers to participate in the scheme. This will definitely boost food production and surplus for exportation upon the efforts of the Central Bank of Nigeria to make this scheme a success, it has not been following effectively and efficient as expected, hence, this is an indicator that there has been some elements of problems debilitating it from functioning positively.

1.2 STATEMENT OF PROBLEM
It is self incident that agriculture has been losing it’s portal role in Nigeria economy irrespective of the various programmes that have been designed to resuscitated it. Finance has been traced to the major handicap to the typical Nigeria farmer, lack of modern farming storage facilities, making and distribution system.. Then the central Bank of Nigeria the apex bank has been mandated by the federal Government of Nigeria is find a solution to these problem.
Consequently, the central Bank of Nigeria through its agencies grant credit for the purpose of agriculture. But was faced with the following problems:
– Lack of general awareness.
– Inadequate public enlightment
– Mismanagement
– Lack of co-operation from the lending house
To minimize the high rate of default that characterized the agricultural insurance company was introduced.
– Public’ skeptical attitude toward insurance
– Lack of liquidity cash to pay the premium .
The problem is that the impact of agriculture on the economy continuously dwindle irrespective of the various efforts of the central Bank of Nigeria including the recent of introduction of Nigeria Agricultural insurance company.

1.3 OBJECTIVE OF THE STUDY.
The major objective of this study is to determine appraise and identify the performance of the central Bank of Nigeria and it’ agencies including the Nigeria Agricultural Insurance company and the performance of the central of Nigeria and Agricultural financing.
This involves.
– To determine the exact efforts of the Central Bank of
Nigeria in agricultural financing.
– To identify the Central Bank of Nigeria agencies in
relation to Nigeria agriculture.
-To identify the problems associated with the implementation of these agencies and suggest solution so as to improve agricultural financing
-To appraise the pre and post Nigeria Agricultural Insurance company and the performance of the central Bank of Nigeria in agricultural financing.
– To determine why agricultural pivotal position in the
economy is still from being recovered with a view to
recombining possible solutions.
These objective are very important because agriculture is the bedrock of any sound-economy more especially in Nigeria context because of her natural endowments in agriculture. I believe that this is why various government have always come up with agricultural slogan as the key to their major objectives such slogan belonging to different past government includes – operation feed the Nation Green Revolution.

1.4 RESEARCH QUESTIONS
(1) To what extent is the establishment of Nigeria Agricultural Insurance Company (NAIC) helped in increasing Agricultural Productivity in Enugu State.
(2) To what extent do farmer benefit from (NAIC) in the event of natural hazard which resulted to financial loss.
(3) How does the establishment of NAIC in Enugu State enhance the level of lending of agricultural loans to the farmers by financial institution.
(4) To what extent has the establishment of NAIC helped in evenly distribution of government financial relief packages to farmers who sustain financial loss from natural disaster?

1.5 RESEARCH HYPOTHESES
The role of Central Bank of Nigeria in agricultural finance development will not be complete without testing the following hypotheses:
1. Ho: There is no significant relationship between the mean perception of NAIC staff of Enugu State office and farmers in Enugu on the improvement of agricultural productivity in Enugu State since the establishment of NAIC.
Hi: There is significant relationship between the mean perception of NAIC staff of Enugu State office and farmers in Enugu on the improvement of agricultural productivity in Enugu State since the establishment of NAIC.
2. Ho: There is no significant difference between the NAIC staff of Enugu State office and farmers in Enugu State view on the benefit farmer derive from NAIC in the event of nature harzards on their farm set-up.
Hi: There is significant difference between the NAIC staff of Enugu State office and farmers in Enugu State view on the benefit farmers derive from NAIC in the event of Natural harzard on their farm set-up.
3. Ho: There is no significant difference between the NAIC staff of Enugu State office and farmers in Enugu State office and farmers in Enugu State enhance the level of lending of Agricultural loans to farmers by financial institution.
Hi: There is no significant difference between the NAIC staff of Enugu State office and farmers in Enugu State enhance the level of lending of agricultural loans to farmers by financial institution.
Hi: There is significant difference between the NAIC staff of Enugu state office and farmers in Enugu State enhance the level of lending of Agricultural loans to farmers by financial institution.
4. Ho: There is no significant difference between the NAIC staff of Enugu State office and farmers in Enugu State helped in evenly distribution of financial relief packages to farmer who sustain has from natural disaster.
Hi: There is significant difference between the NAIC staff of Enugu State office and farmers in Enugu State `helped in evenly distribution of financial relief package to farmers who sustain has from natural disaster.

1.6 SIGNIFICANCE OF THE STUDY
Unless the cause of a problem is found, any attempt at solving the problem would likely be efforts in futility. But when the basic causes of a problem situation are identified, solutions would be easily found.
The contribution of agriculture in the nations economy in providing basic raw material for industries, food for the teeming population and to the balance of trade and payment cannot be over-emphasized.
Moreso, it creates employment opportunities acts as a source of revenue to the government and private sector of the economy.
So, in this context, since agricultural cannot be ignored, there is therefore a need to undertake this descriptive research in order to determine the true nature of it’s problems moreso in the light of agricultural financing.
The research work when complete will be of use to the following;
– The farmers and agriculturists
– Insurance companies (agricultural insurance companies)
– Students in the department of banking and insurance.
– The Central Bank of Nigeria (Federal government)
– Subsequent researchers in the topics

1.7 SCOPE LIMITATIONS AND DELIMITATIONS
This research work centres on the roles of Central Bank of Nigeria in the development of the economy with greater attention being given to its contribution in the financing and development of the agriculture sector of the economy.
The major source of some very vital data on the work of course is the Central Bank of Nigeria but because of it’s own policies, the major information areas are not accessible to the public.
Being limited by the volume and size of first degree research project, an exhaustive investigation into every detail involved in the study of the development roles was not fully carried out rather a full investigation was carried out on the policies of the bank as they affect agriculture.
The researcher encountered some problems in carrying out the research. Some of these problems include:
(a) Lack Of Statistical Data: There are scanty materials on this topic and no availability of data. Even the data are available they are mostly out dated information.
(b) Attitude of Bank Officials: Following the banking profession of principle ‘secrecy’ most of the bank statistical data when requested for.
(c) Financial Constraints: The researcher faced a little financial problems in going from one financial institution to another and in making photocopies of data collected as most of these financial institutions refused to give out the originals to research students.
(d) Finally the short time available to the researcher formal another determinant to scope of the researcher.
However, these limitations notwithstanding, the researcher still came up with a well articulated study that will add to the stock of solutions to the problems of agricultural financing in Nigeria and the implementation of the policies of the Central Bank of Nigeria (CBN).

1.8 DEFINITION OF TERMS
DEVELOPMENT => This means a process of sustained
increased in both per capital income and total income accompanied by structural modification of the socio economic and political environment.
FINANCIAL INSTITUTION=>These are institutions, either
private or public which to channel loanable funds from savers to borrowers.
AGRICULTURE=> In this research paper, the word “Agriculture” is used in its common parlance which includes production, research and training in fields of crops, forestory fishing and livestock.
SMALL SCALE FARMERS=>this is the small size of farm holding; literacy and ignorance; little to capital, lack of tangible assist and clear title to land; how level of productivity; low income; generally vural milieu.
FARMERS=> The term farmer” have been used in a generic sence to cover the spectrum of agricultural production.