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SUBJECT: AGRICULTURAL SCIENCE
SS 3: FIRST TERM
TOPIC: AGRICULTURAL FINANCE
CONTENTS:
Sub-topic 1:
MEANING OF AGRICULTURAL FINANCE
It should be noted that all agricultural activities require fiscal cash for effective farming activities. In most cases the cash has to be raised by the farmers, and where he cannot, he sources for them.
The loans which can be: Short, medium or long terms are paid by the farmers with interest. Farmers face a lot of problems in order to obtain the loan as they are required to provide collateral security or to pay high interest rate.
Due to the nature of agricultural activities, such as
(a) The risk involves
(b) The long period it takes for maturity and
(c) The yield at times not encouraging most financial institutions do not give loans to the farmers
Definition: This is the process of sourcing, acquiring and application of capital in agricultural business. OR
Agricultural financing can also be defined as the acquisition or procurement and use of capital for the purpose of production, processing and marketing of agricultural products.
It deals with the supply and demand of fund in agricultural sector economy
A farmer must have money to carry out his farming activities.
Importance of Agricultural Financing
SOURCES OF AGRICULTURAL FINANCING
Farmers can source for finance to carry out agricultural activities from the following sources
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