ABSTRACT
The study examines the role of commercial banks in Agricultural
development in Nigeria, spanning from 1986-2010. The methodology used is
ordinary least squares (OLS), using P.C give 8.00 package. The findings
from the study support the view that commercial bank loans are not getting
to red farmers. The commercial banks loan to Agricultural sector is positive
and significant at 5% level, contributing 67.65 percent variations in Real
Agricultural output in Nigeria. Real interest rate and real exchange rate are
both positive, but not significant at 5% percent level. The positive real
interest rate shows that Investments in Agricultural sector in Nigeria has a
very high rate of return. The findings suggest that real interest and exchange
rates should be properly managed and periodically received so as to
promote the growth of the Agricultural sector.

CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Agriculture involves the cultivation of land, raising and rearing of
animals and raw materials for industries. It involves cropping live stock,
forestry, and fishing, processing and marketing of these agricultural
products.
Food is man‟s most important basic need before those of clothing and
shelter. It is provision therefore, has been the major concern of man from the
past years since it is both an essential condition and sinequanon to life.
Agriculture being the provider of food can then be concluded as the life wire
of any nation and thus be concluded as the life wire of any nation and thus its
importance cannot be over emphasized.
When Nigeria gained their political Independence in 1960, agriculture
was dominant sector of the economy. It contributed over 65% of the
country‟s Gross Domestic Product (GDP) and provided the bulk of the
foreign exchange earnings through the foreign exports of the cash crops. The
sector catered adequately for nearly all food requirement and raw materials
for industry in the country. Agriculture performs a number of functions in
an economy such as:
1.2 STATEMENT OF THE PROBLEM
Nigerian agriculture is confronted with many problems which ranged
from low yield to low productivity and inadequate facilities among others.
Oyatooye (1981) was on the same path when he noted that the problem of
agriculture in Nigeria can be discussed under four headings.
I. Technology
II. Marketing
III. Finance and Government
Such problems include problems of providing adequate extension
services, agricultural inputs, storage facilities, agricultural credit, marketing
information and efficient marketing arrangement, infrastructures such as
feeder roads efficient power supply and institutional reforms where
necessary. William (1981) pointed out that, the major problems facing
Nigeria today are the needs to transform her agricultural industry from one
traditional input with low productivity to one which enables her to meet the
rising expectations of her people and to correct the social and economic
imbalance created by lopsided development between her rural and urban
areas which have encouraged the youths and others to migrate from rural
areas.
His statement is a valid one as when it was made from we have seen, the
Nigerian economy is characterized by a high degree of rural to urban drift in
search of greener pastures leaving the farm land to old aged men who are
unable to provide all the food requirements of the growing population. This
is responsible of the growing population. This is responsible for the high cost
of food as there is pressure on the little produced.