AGRICULTURAL EQUIPMENT FINANCING: IMPLICATIONS FOR PRODUCTIVITY AND INDUSTRIALISATION IN NIGERIA

Abstract

Agricultural production/activities in Nigeria over the past years have largely remained primitive, resulting in very low productivity due to inadequate application of modern technology. There have also been daunting challenges of access to long-term capital needed to employ modern farming equipment, inadequate inputs and storage facilities, weak agricultural extension and out-dated sectoral infrastructure, all resulting to years of low agricultural productivity. Hence, this study investigates the impact of agricultural equipment financing on increased productivity in the Agricultural sector in Nigeria. The study employs the archival and documentary research design which involves secondary data collection. 16 years data on total annual financial expenditure on agricultural equipment and data for agricultural output and export earnings from 2000 to 2015 (16 years) form the population of the study. Data on cumulative annual expenditure on agricultural equipment financing (AEF), an aggregate of technological advancement in mechanized farming (TMF) and agricultural productivity (AP), were employed. The findings reveal that agricultural equipment financing has a significant impact on technological advancement of mechanized farming and that there is a significant relationship between technological advancement of mechanized farming and production output. The study therefore recommends that efforts should be made by agricultural intervention agencies and financial institutions to increase credit financing for agricultural equipment, which is a sustainable measure towards revolutionizing and industrialisation of the economy through technological advancement in the sector.