A Statistical Study on the Effects of Agricultural Loan on Farming Activities in Nigeria – A Case Study of Ohaofia Local Government Area of Abia State Chapter One  Aims and Objectives of the study

A Statistical Study on the Effects of Agricultural Loan on Farming Activities in Nigeria – A Case Study of Ohaofia Local Government Area of Abia State

Chapter One

 Aims and Objectives of the study

The chief objective or aim of this study is to know the level of success recorded in assisting rural farmers to increase productivity.

To know the difficulties encountered by those farmers in assessing these loans

To know which institutions have been really supportive in assisting the farmers to increase productivity.

To know if increased assistance would mean increase in employment and productivity.

To know if there is a relationship between agricultural credit or loan and the level of productivity in Nigeria. We are also interested in knowing the nature of this relationship if any.

To know if there is equally a relationship between agricultural loan and the employment level in Nigeria. The nature of this relationship ( if any ) is also important to us.

CHAPTER TWO

LITERATURE REVIEW

INTRODUCTION

This chapter gives an insight into various studies conducted by outstanding researchers, as well as explained terminologies with regards to the impact of internet banking on profitability of commercial banks in Nigeria.The chapter also gives a resume of the history and present status of the problem delineated by a concise review of previous studies into closely related problems.

THEORETICAL FRAMEWORK

One of the most dominant theory by which we can conceptualize the development process is termed  a two-sector or dualistic model. Its analytical framework is always based on distinguishing the traditional sector (Agricultural) from the modern sector (Manufacturing). The early model of Lewis (1954:87) began with the assumption of the existence of an Unlimited (or totally elastic) supply of labour originating from the traditional sector. It was assumed that the traditional sector was not rational in the sense of profit maximizing and that the emigration of reduction of its output because of zero marginal product of its labour.

The modern sector, says Lewis, which consists of manufacturing and some agricultural production, uses modern technology. The sector is capital intensive and is rational in the sense of seeking to maximize profit by hiring labour up to the point where the marginal product of the last unit of labour transferred to the modern sector is equal to the wage. Savings were assumed to be made only out of profit. As these profits       were reinvested, the demand for labour would increase. This would continue until labour in the traditional sector is no longer unlimited. At the point when labour becomes scarce traditional sector, it began to be commercialized and subsequently, labor would be hired up to the point where the marginal product is equal to the wage.

An alternative on Lewis’s unlimited labor supply theory was made by Rains and Fei (1961:43), where the marginal product of labor was drawn out of the sector, terms of trade would turn against the modern sector and the wage rate must be raised, as the traditional sector produces, foods were assumed to be consumed by the modern sector. Consequently, profits in the modern sector tended to go down, and investment would also slow down. It is also likely, therefore, that growth will stop prior to the commercialization of the traditional sector.

In this regard, there are two schools of thought: the pre-requisite thesis and the concurrence thesis. The former thesis argues that an agricultural revolution and the subsequent rise in agricultural productivity are pre-requisite for the initial spur of development, whereas the latter thesis denies he condition for pre-requisite and asserts instead that rapid growth in agricultural productivity could occur simultaneously with industrialization.

Marx, one of the early growth- stage theorists, presented his (stages) classification on changes in production technology and associated changes in the system of property rights and ideology? Rostow also presented his classification of stages in the transition from a primitive to a modern economy and offered basically an equivalent reason of regarding the agricultural development as the pre condition to lake-off” (Hayami and Ruthan, 1971).

As mentioned earlier, one reason for supporting the pre- requisite thesis is in fact that it is the outputs of the primary sector, rather than of others that could be increased without costing much of the critically scarce resources of financial capital and foreign exchange. Thus, it is only when agriculture is already growing rapidly  that it could and should be squeezed on behalf of the m

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