THIRD TERM E-LEARNING NOTE

SUBJECT: AGRICULTURAL SCIENCE CLASS: SS 1

SCHEME OF WORK

WEEK TOPIC

1
Sources of farm power: Human - Animal - Mechanical - Electrical - Solar - Wind
- Water
2-5 Mechanization: Definition of mechanization. Prospect of mechanization The
advantages of mechanization: i. Increased productivity ii. Reduced drudgery iii.
Timeliness of operations etc.
Problems of mechanization
a) Disadvantages of mechanization: - displacement of workers - destruction
of soil structure - environmental pollution - compaction of soil
b) Limitations: - economic limitations - technical knowhow - small holdings .
Prospects of mechanization
6 Factors of production: Land , labour, Capital, Management
7 Farm manager: Functions of a farm manager: Planning, organizing, supervising
etc
8-9 Agricultural financing: Sources of farm financing: i. Agricultural banks ii.
Commercial banks iii. Cooperative societies iv. Money lenders v. Individuals
Agricultural financing Sources of farm financing continues vi. Savings and thrift
society vii. Self-financing viii. Government ix. Others

10 Implications of farm credits: The implication of farm credits e.g. interest rates

11 REVISION

13 EXAMINATION
LESSON NOTE FOR S.S.S 2, 3RD TERM
WEEK 1

SUBJECT: AGRICULTURAL SCIENCE

TOPIC: FARM POWER

CONTENT
 Definition of farm power
 Sources of farm power
 Advantages and disadvantages of farm power

DEFINITION OF FARM POWER

Power is the rate of doing work or the expenditure of energy. Power is measured in units of
joule/seconds otherwise known as watts. Farm power is the ability provided by various sources
to carry on farm work. Farm power then can be defined as the energy, force and source used to
carry out farming operations.

SOURCES OF FARM POWER

HUMAN POWER

This is the most important source of farm power without which all other sources are useless. It
involves the use of man’s intellect and/manual effort to carry out different farming activities. The
great advantage of human power is man’s intelligence which means he is able to control the
work he does.

ADVANTAGES OF HUMAN POWER

1. Man’s intelligence to control the work he does.
2. Man has the advantage to control all other sources of power
3. It is required in all farm operations
4. It is easily controlled and available.
DISADVANTAGES OF HUMAN POWER
1. The output per man per hour is very low.
2. Total production can only be of subsistent level.
3. A lot of drudgery is associated with the use of human power.
4. Man is exposed to high or low temperature, humidity, wind, pollution etc. when used as a
source of power on the farm.

EVALUATION
1. What is farm power?
2. Mention two advantages and two disadvantages of human power

ANIMAL POWER OR ANIMAL TRACTION

This is the use of animals in carrying out various operations on the farm. Pair of working bull
yoked together, camels, donkeys etc, are common animals normally used. Man controls the
animals where they are utilized. The power supplied by animals is for pulling plough, harrow,
planter, ridger etc. and for transporting the farm product.

Belgian Heavy Draft Horses

Belgian heavy draft horses have great strength. Farmers in Belgium sometimes use these horses
for plowing instead of tractors, which can get stuck in wet soil.

ADVANTAGE OF WORK ANIMALS

1. The use of animal power makes much less demand of human power as it is often proves
more effective in farming activities.
2. Animals can work for a long time if properly fed.
 3. It has a relatively low maintenance when compared to machines.
4. It can handle many farm operations.
5. It can be controlled.

DISADVANTAGES OF WORK ANIMALS

1. They can refuse to work if not properly handled
2. The cost of maintaining the animals feeding, veterinary servicesetc is high
3. Diseases may affect the efficiency of work animals
4. There is a limitation in the output of animals particularly in hot climate
5. They cannot work in Tse-tse fly infested areas.

MECHANICAL POWER
This requires the use of series of machines to carry out farm operations. Power transmitted
through engines can come directly or indirectly from electricity or from the burning of fuel.

ADVANTAGES OF MECHANICAL POWER

1. It can do more work per unit time more than man and animals.
2. Unlike human and animal power there is no fear of diseases.
3. It can be used in tsetse fly infected area.
4. They are the fastest and most efficient source of farm power.
5. They make farm operations timely

DISADVANTAGESOF MECHANICAL POWER

 1. High capital investment is involved in the accusation of machineries.
2. Many tractors are laid off in West Africa due to lack of spare parts.
3. It is not suitable for small land holdings.
4. Intensive mechanization displaces labour from the farm and can lead to unemployment.
5. It is not readily available.

EVALUATION
1. What are the advantages of mechanical power over work animals
2. State two disadvantages each of A. work animals B. mechanical power

ELECTRICAL POWER
This is power derived from electricity or generator. It is a neat or clean source of energy. It is
used to operate electric motors. Motors are used to operate many modern appliances such as
heater, incubator, mixer and some power tools. Electrical power is also measured in watts.

ADVANTAGES OF ELECTRICAL POWER

1. It is easy to operate
2. It is efficient and it saves labor
3. It is a cheap source of farm power
4. It gives quick and immediate result.
5. It can be used for various services and at different time.

DISADVANTAGESOF ELECTRICAL POWER

1. Electricity supply is not regular especially in developing countries like Nigeria.
2. Electrical fault may cause serious hazards.
3. It cannot be widely used in the field.
4. Cost of installation and maintenance is high.
5. It is dangerous and fatal if carelessly handled
SOLAR POWER
This is the power derived from radiation, light and heat reaching the earth from the sun. This
energy is the ultimate source of energy and it can be converted into electrical energy by installing
solar panels. Solar energy is trapped into photo – voltaic cell or solar collectors which is then
converted into electrical energy and stored in batteries or used directly.

Solar Power
These solar panels convert energy from sunlight and can be used to generate electricity.

ADVANTAGES OF SOLAR POWER

1. Solar power is inexhaustible.
2. Solar energy can be used to dry crops, power machines and generate electricity.
3. Solar energy technology is environment friendly.
4. It is readily available.
5. Solar panels have long life span.

DISADVANTAGES OF SOLAR POWER

1. It requires a lot of technical knowhow.
2. It is only available during the day.
3. Its provision cannot be controlled.
4. It cannot be adjusted on readily stored.
5. Excess of it can cause transpiration and evaporation.

EVALUATION
1. Outline four uses each of A. solar power B. electrical power
 2. What are the disadvantages of electrical power

WIND POWER
This is the power generated by wind movement. Wind power is made possible through the use of
windmill that helps to pump water out of the boreholes or in generating electricity.

A water-pumping windmill in spring, Arizona, provides water for agricultural use. The blades, or
sails, are mounted at an oblique angle on the horizontal shaft. The fantail rudder steers the bladed
wheel into the wind to maximize the windmill’s efficiency.

ADVANTAGES OF WIND POWER

1. Wind can be harnessed to drive boats, power grinders and to operate water pumps.
2. It can be used for drying farm produce.
3. It is cheap and available everywhere.
4. It is used in winnowing, i.e. separation of chaff from grains.
5. It can serve as alternative to electrical power.

DISADVANTAGES OF WIND POWER

1. The supply of wind is sporadic and uncertain.
2. A large windmill often proves to be very expensive for the energy it produces.
3. It cannot be stored.
4. It is difficult to control.
5. It is limited to certain farm operations.
WATER POWER
This is the power derived from water flowing in rivers, oceans, dams etc. It is used in hydro-
electric stations to drive the turbines. A turbine is a rotating engine with its blade driven by
water.

Electricity Generators
Generators at the Bonneville Dam in Oregon produce electricity as water flows through large
turbines and drives the axles of the generators. The Bonneville Dam is located on the Columbia
River between the states of Oregon and Washington. The Bonneville plant is one of many
hydroelectric stations in the northwestern United States.

ADVANTAGES OF WATER POWER

1. A steady and uninterrupted flow of water can be made to turn turbines or water wheels to
generate electrical energy.
2. It is used in transportation of farm goods.
3. It can be used to process farm produce.
4. It is needed in seeds germination and normal growth of crops
5. It is needed in the process of photosynthesis by plants.

DISADVANTAGES OF WATER POWER

1. Low level of water can hinder electricity output.
2. It is not available in all areas.
3. It could be destructive if not carefully handled.
4. Supply is affected by weather.
 5. It cost huge sum of money to set up and maintain

EVALUATION
1. State four uses each of A. water power B. wind power
2. Mention two disadvantages of wind power

BIOGAS
A method of generating power by making use of farm wastes, especially animal dung, urine etc
collected and processed to produce methane gas.

ADVANTAGES OF BIOGAS
1. A cheap source of power.
2. It can be used to generate heat for brooding chicks.
3. It can be used for cooking and drying.
4. It can also be harnessed to generate electrical energy.
5. It can easily be controlled.

DISADVANTAGES OF BIOGAS
1. It requires expertise which may not be easily available.
2. It is expensive to set up and maintain.
3. It is not a common source of power.
4. It is restricted to where animals are reared on a commercial basis.
5. If not properly handled, it can lead to fire incidence.

GENERAL EVALUATION
1. What is farm power?
2. What are the sources of farm power?
3. State three advantages and disadvantages each of
a. Wind power b. Water power c. Solar power d. Electrical power e. Animal power
f. Biogas
4. State three uses of biogas
 5. List three sources of hydroelectric power

READING ASSIGNMENT
 Essential Agricultural Science Chapter for Senior Secondary Schools by O.A. Iwena
pages 14, page 122 - 129.
 Answer the following questions from WAEC PAQ 2005 theory question 1, 2008 theory
question 1

WEEKEND ASSIGNMENT
1. The most common source of farm power drying grains in West Africa is A. heat engine
B.sun C.waterD.electricity
2. ____ can be harnessed to generate electricity. A. PetrolB. Animal dung C. Biogas
D. Turbines
3. The most unreliable source of farm power is A. Wind B. Water C. Electricity D.
Machines
4. Water power is harnessed and converted into electrical power by A. blade B. grains
C. turbines D. hovercraft
5. The fastest and most efficient source of farm power is ____ power.A. Solar B. Animal
C. Mechanical D. Biogas

THEORY
1. List two farm operations each requiring the use of
i. Machine
ii. Electricity
iii. Wind
iv. Solar radiation
2. In what way is human power the most important source of farm power?
LESSON NOTE FOR S.S.S 2, 3RD TERM
WEEK 2 - 5
SUBJECT: AGRICULTURAL SCIENCE
TOPIC: FARM MECHANIZATION (TRACTORIZATION)

CONTENT
 Definition
 Advantages of mechanization
 Disadvantages of mechanization
 Problems of mechanization
 Prospects of mechanization

Definition of Mechanization
Mechanization refers to the application of engineering principles and technology in agricultural
production. It is the use of machines such as tractors, ploughs, harvesters, harrow, planter etc as
well as the use of farm inputs such as insecticides, improved seeds, fertilizer etc.

Objectives of Mechanization
The objective of mechanization is to:
 Reduce human labour (that is to reduce drudgery)
 Increase efficiency
 Save cost (on the long run)
 Save time
 Improve standard of living by improving quality and quantity of produce available.

ADVANTAGES OF FARM MECHANIZATION

1. It ensures that farm operations are done and completed within a shortest possible time
2. It saves labour that could otherwise be useful elsewhere.
3. It reduces health hazards and accidents that can occur from using tools.
4. It reduces drudgery.
 5. It encourages large scale farming hence increasing output.
6. It promotes specialization of labour for example machines operators become specialists
in the machines they handle.
7. It increases cooperation among farmers such as enabling them put their resources
together to buy machines and use them on rotational basis thereby making them united.
8. It on the long run saveslabour cost, wastage, reduces errors and spoilage thereby leading
to an increase in income (saved cost).

DISADVANTAGES OF FARM MECHANIZATION

1. It involves huge capital investment.
2. With mechanization very few workers are needed which renders other laborers
unemployed.
3. The movement of heavy duty machines on land leads to compaction of the soil.
4. The smoke from exhaust of machines can cause air pollution.
5. Due to small land holdings as a result of the system of land tenure, use of machinery is
not encouraged (e.g communal land tenure).
6. Continuous usage of machines on the soil tends to destroy the soil structure.
7. Very few crops like maize, rice etc can be mechanized.

EVALUATION
1. State five advantages of farm mechanization.
2. State five disadvantages of farm mechanization.

LIMITATION OF FARM MECHANIZATION

1. Inadequate spare parts.
2. Farmers are generally poor, cannot afford to buy machines like tractors etc.
3. There is inadequate technical know-how on how to operate and repair farm machines.
4. As a result of small area of land cultivation, it is not economically advisable for farmers
to use machines on their farm. This problem is created by land tenure system.
5. Seasonality of farm operation: Machines may be left unused because of seasonality
nature of farming.
 6. Uneven land terrain makes it difficult to operate farm machines.
7. Inadequate storage and processing facilities discourages large scale production.

EVALUATION
1. Define mechanization
2. Outline five problems of farm mechanization in Nigeria

PROSPECTS OF MECHANIZATION
1. Farmers should be educated to accept modern system of mechanization.
2. Provision of loans to enable farmers to purchase farm machines.
3. Farmers should pool their resources together to buy farm machines.
4. Land tenure system should be reviewed to make land available for farming.
5. Simple and less expensive machines should be developed for farmer to acquire.
6. There should be engineering personnel trained to work on machines.

EVALUATION
1. Outline five factors limiting farm mechanization in Nigeria.
2. What are the possible ways of improving agriculture through mechanization.

GENERAL EVALUATION
1. What is mechanization?
2. Outline five problems of agricultural mechanization.
3. State five advantages and disadvantages of farm mechanization.
4. State five limitations of farm mechanization.
5. State five possible ways of improving agriculture through mechanization.

WEEKEND ASSIGNMENT
1. Which of the following is an advantage of farm mechanization? A. Carrying out many
farm operations with ease B. Displacing many farm workers C. Exposing soil to direct
effect of sunlight D. polluting the environment
 2. In which of the following operationscan a tractorbe effectively used for? A.Fertilization
B.Harvesting C.PloughingD.Stumping
3. Mechanization in West Africa is limited by the following except? A. Size of farm
holdings B. Technical Knowhow C. Capital D. Labor
4. Which of the following gives the correct order of usage of tillage implements in a virgin
land A. Harrow Plough Ridge B. Harrow Ridge Plough C. Ridge Plough Harrow
D. Plough Harrow Ridge
5. Which crop is best cultivated by mechanical means? A. Cassava B. Cocoa C. Maize D.
Oil palm

THEORY
1. What is mechanization?
2. State four advantages and disadvantages each of mechanization in agriculture.
LESSON NOTE FOR S.S.S 2, 3RD TERM
WEEK 6

SUBJECT: AGRICULTURAL SCIENCE

TOPIC: FACTORS OF PRODUCTION

CONTENT

 Meaning of Production
 Factors of production(land, labour, capital, management)

Definition of Production
Production are series of activities which transforms inputs( raw materials) into output or more
useful forms.
Factors of production are resources that are put together in the process of producing a product.
These factors includes
a. Land
b. Labour
c. Capital
d. Management/ Entrepreneurship

LAND

It includes all the gifts of nature, e.g water, air, soil etc. Land is the most important factor in
agricultural production.
Features of land as a factor of production
i. Land can appreciate in value
ii. It’s reward is rent.
iii. As collateral to borrow money from bank.
iv. It’s immovable.
LABOUR

This refers to all human efforts put into production. It involves man’s mental and physical efforts
that are used in the production process.

Sources of Labour

a. Family labour
b. Community labour.
c. Hired labour.

Types of Labour

1. Skilled labour: Is the type that the individual had been trained specifically for a particular
operation. E.g. banking, teaching etc.
2. Unskilled labour: Is the type where the individual has no training or special knowledge
for the job. Examples include truck pusher, wheel barrow pusher etc.
3. Semi Skilled labour: It’s when a little knowledge or training is required and could be
acquired by practical experience. E.g. shoe cobblers, mechanics etc.

Characteristics/ features of labour

1. It’s movable
2. It can protest
3. It measures in man/ day or man/ month
4. It’s reward is salary / wages.

CAPITAL

This is all man made productive assets which are used in production. Capital includes farm
buildings, tools, money, machinery etc.
Features of capital

1. It’s reward is interest

2. It can be fixed or circular
3. It determines the scale of production in a given time.
MANAGEMENT / ENTREPRENEURSHIP

This involves the combination of the three factors of production, that is, land, labour and capital.
Features of management
a) Coordinating
b) Organizing
c) Controlling activities of the farm
d) Decision making
e) Risk bearing etc.
LESSON NOTE FOR S.S.S 2, 3RD TERM
WEEK 7

SUBJECT: AGRICULTURAL SCIENCE

TOPIC: FACTORS OF PRODUCTION (MANAGEMENT)

CONTENT

 Definition of Farm Manager

 Functions of Farm Manager

Definition of Farm Manager

Farm manager, is one who co-ordinates, organizes and controls the use of other factors of
production to produce goods and services. In other words, the work of management is carried out
by a farm manager. Decision and duties such as when to produce, what to produce, type of
production, supervision of work, recruitment of workers, and determination of what and when to
sell in order to make profit depends on (farm manager) management.

FUNCTIONS OF FARM MANAGER

The functions of a farm manager can be grouped into five major headings:

1. Organization
2. Administration
3. Production
4. Marketing
5. Evaluation
 1. Organizational function: this involves putting together all factors of production during
productive activities. These functions includes securing suitable land for
farming, determining what to produce, determining the scale of production, procuring
loan or capital for farming, recruiting or employing workers for the farm etc.

2. Administrative function: this involves ensuring good and effective working of all
factors of production. These duties includes supervision of the work on the farm,
arrangement work roasters, directing workers on day-to-day activities,ensuring staff
welfare, organizing training of man-power in the farm, etc.

3. Production function: involves the right combination of the factors of production to

ensure optimal yield. Part of the function includes purchasing and using of farm inputs,
ensuring the health of animals and crops on the farm, making arrangement for general
security of the farm, ensuring the adequate supply of feeds, adheres to modern farming
techniques, etc.

4. Marketing function: this involves meeting sales target. To ensure this, the
farmer determines the quantity of produce to sell and price at which to sell, determines
the best marketing channel to use to make maximum profits, determines when to sell to
make maximum profit, monitors marketing trends, arranges for storage and warehousing
of unsold produce, etc.

5. Evaluative function: involves ensuring that other functions have been done
appropriately. To effectively do this, he keeps the general records of activities on the
farm, supervises accounts and bookkeeping of all operations on the farm, analyses farm
operations with respect to targets and objectives, assesses the staffing conditions,
develops new strategies for further improvement of farm operations, etc.

EVALUATION
1. What is management?
2. List five functions of a farm Manager.
GENERAL EVALUATION

1. Define management
2. Briefly highlights the function of a Farm Manager based on

1. Organization
2. Administration
3. Production
4. Marketing
5. Evaluation

WEEKENDASSIGNMENT

1. Management in a farm determines the following except A. when to produce A. what to

produce B. type of production, C. supervises work D. granting of loans
2. Procurement of loan or capital for farming activity is one of ____ functions of a farm
manager A. Administration B. Production C. Organisation D. Marketing
3. The supervision of accounts and bookkeeping of all operations on the farm is carried out
by ____ A. Farm treasurer B. bookkeeper C. Farm managers D. Farm supervisor
4. Which of the function of a farm manager entails caring for the health of animals/crops on
the farm? A. Organisation B. Marketing C. Administration D. Production
5. Management determines the ____ of the farm. A. Production B. Enlargement

1. Profitability D. Progress

THEORY

1. What is management?
2. Mention and briefly explain five major functions of a farm Manager
LESSON NOTE FOR S.S.S 2, 3RD TERM
WEEK 8 – 10

SUBJECT: AGRICULTURAL SCIENCE

TOPIC: AGRICULTURAL FINANCING
CONTENT
 Meaning of Agricultural Financing
 Importance of Agricultural Financing
 Sources of Agricultural Financing
 Types of Farm Credit
 Implication of Farm Credit

Meaning of Agricultural Finance

Agricultural finance is the act of acquisition and use of capital in agribusiness. It deals with the
demand for and supply of fund order to carry out various projects on the field of agriculture. The
main objective of financing is to increase and other productive factors, stocks available to
farmers to expand production.
Meaning of agricultural credit
Agricultural credit refers to a refundable loan granted to a farmer to enable him to improve his
farming activities. it can also be defined as a loan granted to a farmer by credit lending agencies
for agricultural purposes.

Types of Farm Credit

There are three major classes of farm credit:

1. Short term credit: This is a productive credit which the borrower is expected to pay back
within a year. It may be used to purchase items that can easily be used up with the
optimum output. Examples are improved seeds, fertilizers, chemicals, fuel etc.
 2. Medium-term credit: This is the type of credit which the borrower is expected to pay
back within a period of two to five years. It can be used to purchase items that can be
turned around or used within the time frame and yield high profit. Examples, purchase of
a light-duty machine or simple farm implement, breeding livestock, building housing
units for livestock, erecting farm structures etc.
3. Long term credit: This is a productive credit which is repayable within a period of five to
twenty years. It attracts the highest amount of money compared to short and medium-
term credit. It can be used to purchase costly fixed assets such as farm buildings, land,
heavy-duty machines etc.

Agricultural Subsidy

Agricultural Subsidy refers to a non-refundable aid granted to a farmer. Examples include reduction
in the prices of inputs such as fertilizers, improved seeds, chemicals, etc, free information such as
weather forecast, new technology, market sources, etc.

Interest

Interest is the amount paid on borrowed capital or an amount earned above the cost of
goods. Interest is usually paid on borrowed capital which usually comes along with loans. For
example, if a farmer borrows N500,000.00 from a bank and the interest on the loan is 10%, it means
the amount he will pay as interest is N50, 000.00 per annum, i.e.,

x = N50,000.00

When the farmer is paying back the loan with the interest, the total amount he will pay the bank is
N550, 000.00
 Differences between Subsidy and Credit

S/N CREDIT SUBSIDY

i. Credit is a repayable loan. It is a non-repayable loan.

ii. Credit is always in cash It may be in cash or in land.

It includes bank loans, credit schemes and It includes reduction in prices of input like
iii.
cooperative chemicals, seeds, fertilizers, etc.

iv. It has a time period for its return It is given and never to be re-turned

Government does not bear part of the burden Government bears part of the burden of a
v.
of a loan subsidy

Importance/Significance of Agricultural Credit

1. It enables the farmer to acquire necessary modern farm inputs to improve and increase
their efficiencies.
2. It helps farmers to maintain a large land area.
3. It enables farmers to acquire storage and processing facilities,
4. It improves the standard of farmers.
5. It helps the farmer to take care of any prevailing condition in the farm such as pest and
disease control.
6. It helps the farmer to insure their farms against hazards surrounding farming.
7. Agricultural subsidy
8. This is a non-refundable aid granted to farmers to enable and encourage them in their
production. It also refers to a discount given to farmers by agencies usually government
 agencies in the course of the farmer, purchasing agricultural inputs such as chemicals,
fertilizers, improved seeds.

Sources of Agricultural Financing or Farm Credits

1. Agricultural banks: Example Nigerian Agricultural and Co-operative Bank (NACB)

established solely to grant loans to potential farmers.
2. Commercial bank: Have departments that take care of loans given to farmers. Example of
such banks is United Bank of Africa (UBA), Union Bank PLC, Wema Bank PLC, etc.
3. Cooperative society: Members pool their resources together and whoever is interested in
getting loans can obtain it from society.
4. Credit and thrift society: Members contribute money in which they use in financing their
farming business.
5. Self-financing: Money saved by an individual to finance agricultural business.
6. Individuals: Money borrowed from friends, relatives etc. to finance agricultural business.
7. Moneylenders: People who lend money to farmers to enable them to produce. They
charge a high-interest rate.
8. Government agencies and government: These are a department in government
establishment or ministries responsible for granting credit to potential farmers.
9. Non-governmental organization: These are bodies set up by individuals or a group of
people with the aim of rendering services or financial assistance to farmers.

Problems Farmers May Encounter from Some Credit Sources

1. Problems from Commercial Banks

a. They are usually biased in favour of large scale farmers only.

b. They demand collateral which farmers cannot provide.
c. There is the problem of relatively high interest rate.

2. Problems from Community Banks

 a. The amount of credit is usually small and inadequate to meet the needs of farmers.
b. They insist on a would-be lender coming to open account with them before loans are given.

3. Money Lenders

a. They are usually biased towards enterprises that bring in quick returns to repay the loan.
b. Their interest rates are too high to allow for an appreciable input from the farm business.

4. Family Sources

a. The use of loan is usually small and inadequate

b. They usually insist on short-term credit.

IMPLICATIONS OF FARM CREDITS

The procurement of loans or credits for farming activities is associated with some implications.
In other words, farmers find it difficult to get loans from banks because of the following reasons:

1. Interest rates: Interest rate is the rate at which farmers can borrow money from bank, i.e,
the amount of interest a farmer will have to pay on the money borrowed. High interest
rate discourages borrowing while low interest rate encourages borrowing. Therefore,
farmers cannot borrow when the interest rate is too high.
2. Collateral Security: This is what the banks and other financial institutions will want a
borrower to present before a loan can be given. Such securities include landed property,
buildings, etc. Most farmers do not have these securities and therefore, cannot borrow
money.
3. Long gestation period of some crops: Some crops like rubber, cocoa and oil palm take a
very long time to mature. Banks, therefore, find it very difficult to grant loan to farmers
engaged in the cultivation of such crops.
4. Unpredictable climate which can lead to crop failure: Agricultural activities in Nigeria
depend naturally on rainfall. A good rainfall encourages productivity but lack of rainfall
 is a doom to farming activities. Banks, therefore, are always afraid to lend money to
farmers because unfavourable climate can lead to crop failure.
5. Lack of farm records: Farmers lack good farm records of all their activities which can be
used to assess their credit worthiness.
6. High level of loan defaulters: Farmers may not be able to repay the principal, let alone
the interest charged, in case of natural disaster.
7. Lack of insurance Policy: Farmers do not take insurance on their farms.
8. Lack of moratorium: Banks do not give moratorium or deferment of payment of loans to
farmers.
9. Land tenure System: The prevalent land tenure system works against procurement of
agricultural loans.
10. Small farm holdings: Farm holdings are too small and uneconomical to operate for
mechanization and profit.
11. Lack of awareness: As a result of high level of illiteracy among farmers, they are hardly
aware of the existence of loan facilities in banks.
12. Bureaucracy: Bureaucracy (red tapism) which is normally involved in the procurement of
loan does lead to non-disbursement of loans to farmers.

Questions
What is Agricultural financing
State five source of financing
Sate five differences between loan and subsidy