Agricultural Science

Finance as a factor of production in agriculture

len Alfred Ajibola - 10th April, 2024 @ 07:57 AM

Topics in Agricultural Science

Soil formation in agricuture Economic empowerment through agricuture Management as a factor of production in agriculture Labor as a factor of production in agriculture Finance as a factor of production in agriculture Water as a factor of production in agriculture Land as a factor of production in agriculture Len Academy Agricultural Science midterm questions for JSS1, 2nd term Len Academy Agricultural Science midterm questions for jss2, 2nd term Clay soil explained with its types and characteristics Loamy soil explained with its characteristics Sandy soil: Characteristics of sandy soil and ways to make it fertile Soil explained with its composition Types of agricultural practices Crop rotation explained Benefits of crop rotation Differences between subsistence and commercial farming Subsistence farming explained with its characteristics What is commercial farming? Types of commercial farming Characteristics of commercial farming

Academic Questions in Agricultural Science

Please click here to see all Questions and Answers

The ideal pH for the optimum growth of most agricultural crop is between _____.

  • A. 1 – 3.5

  • B. 4 – 5.5

  • C. 6 – 7.5

  • D. 8 – 9.5

  • E. 10 – 11.5

  • F. 12 – 13.5

People who go about their lives by raising and herding livestock such as cattle, sheep and goats are said to practice _____.

  • A. Pastoralism

  • B. Pasturalism

  • C. Herding

  • D. Herdsmen

  • E. Animalism

  • F. Anime Farming

The act of giving birth in pigs is called _____.

  • A. Calving

  • B. Piggery

  • C. Kidding

  • D. Farrowing

  • E. Calfing

  • F. Pigging

Which of the following is not a vegetable?

  • A. Cashew

  • B. Cocumber

  • C. Tomatoes

  • D. Carrot

  • E. Squash

  • F. Eggplant

All plants are crops.

  • A. True

  • B. False

In agriculture, macronutrients are essential nutrients required by plants. Which of the following is not a macronutrient?

  • A. Zinc

  • B. Sulphur

  • C. Calcium

  • D. Phosphorus

  • E. Potassium

  • F. Magnesium

Which of the following is false concerning micronutrients?

  • A. They are non-essential nutrients

  • B. They are required by plants in minute quantities

  • C. Iron is a micronutrient

  • D. Chlorine is a micronutrient

  • E. Copper is a micronutrient

  • F. Boron is a micronutrient

_____ is a term that describes the biological, chemical and cultural control tactics employed to make pest management economical, environmentally friendly and socially acceptable.

  • A. Integrated Pest Management

  • B. Integral Pest Management

  • C. International Pest Management

  • D. Inclusive Pest Management

  • E. Imbibed Pest Management

  • F. Inclusion Pest Management

Factor of production in agriculture (Finance):

Finance is a crucial factor of production in the field of agriculture. As a student, understanding the role of finance in agriculture can greatly benefit your knowledge and future career in this industry. 

In this article, we will explore the importance of finance as a factor of production in agriculture, and how it impacts the overall success of farming operations.

Please read on water as a factor of production in agriculture here.


To begin with, finance plays a significant role in acquiring the necessary resources for agricultural production.

You can think of finance as the capital or money required by farmers to embark on their agricultural projects.


Farmers require funds to purchase seeds, fertilizers, pesticides, machinery, technology, labor, and other inputs essential for cultivating crops or raising livestock. 

Without adequate financial resources, farmers may struggle to invest in the necessary inputs, which can hinder their productivity and overall efficiency.

You can read on the types of agricultural practices here.


Moreover, finance is crucial for managing the day-to-day expenses associated with agricultural operations. From paying the wages of laborers, to maintaining farm infrastructure; funds are required to ensure the smooth functioning of the farm. 

Without proper financial management, farmers may face difficulties in meeting their financial obligations, leading to disruptions in their farming activities.

Please read on the problems of agriculture in Nigeria here.


In addition, finance enable farmers to adopt modern technologies and practices that can enhance productivity. 

Agriculture is an ever-evolving industry, and new technologies are constantly being developed to improve efficiency and maximize yields. However, these technologies often come with a price tag.

Through access to finance, farmers can invest in advanced machinery, irrigation systems, and other innovative solutions that can significantly boost their agricultural output. However, understand that these machines are quite expensive, incurring huge financing.

Please read on agricultural machines and their uses here.


Furthermore, finance plays a vital role in managing the inherent risks associated with agriculture. In this regard, a farmer may insure his agricultural machines, in an attempt to manage unforseen risks.

You can read on agricultural terms and meanings here.


Sources of finance to farmers

It is noteworthy to state that farmers often face challenges when sourcing for agribusiness finance.

One the major challenges faced by farmers is in the acquisition of finance to start or strengthen their agribusiness. Below are the ways through which farmers obtain finance for their agricultural business:

  1. Borrowing from family, friends and well-wishers.

  2. Borrowing from local money lenders. Farmers will likely repay the borrowed money with interest.

  3. Small scale farmers may involve in group contributions. These contributions allow the farmers to collect bulk money when it's their turn. Such financial contribution is termed 'osusu' in the Nigerian local parlance.

  4. The federal and state governments can provide low interest loans to farmers. For this reason, the Nigerian Agricultural Cooperative Bank was set up by the federal government to disburse finance as loans to small, middle and large scale farmers in Nigeria.

  5. Farmers can choose to sell their non agricultural assets to commence their agribusiness.

  6. Farmers may also get finance in the form of agricultural chemicals (for example, fertilizers and pesticides), tools, machines, technology, and even education. These form of support to farmers are often classified as inputs on credit.

  7. Non-governmental charity organization can choose to give startup capital to farmers. Farmers enjoying such  agricultural startup benefits may perhaps be free from repayment.

  8. Farmers may also leverage on the capital markets to generate funds for their agribusiness.

  9. Farmers may get finance as gifts during glorious events like birthdays and marriage celebrations.

  10. Farmers can also obtain loans as finance from various commercial banks.

You can read on land as a factor of production in agriculture.


Importance of finance in agriculture

In summary, below are the importance of finance in agriculture:

  • Farmers require finance to purchase seeds, fertilizers, farm machines, and other inputs essential for cultivating crops and raising livestock.

  • Farmers require finance for managing the day-to-day expenses associated with agricultural operations. This will include paying laborers their wages, while also maintaining farm infrastructure.

  • Farmers require finance to adopt modern technologies and practices that can enhance agricultural productivity.

  • When farmers require technical advice (or expert opinion) of agricultural scientists, money (finance) would be required to pay for such services.

  • Adequate finance is required to manage risk by farmers.

You can read on the characteristics of commercial farming here.

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Amazing facts in Agricultural Science

Cows technically have one stomach, not four. However, a cow's stomach has four compartments. These are: rumen, reticulum, omasum and abomasum

Peanuts are legumes and not nuts

Although plants neither see nor hear, they can recognize their siblings and even give them preferential treatments

Squirrels do plant more trees (through their actions) than an average human in their lifetime. They often hide their acorns and nuts underground and forget about them

Cows have got the ability to walk up stairs, but not down stairs

A group of cows is called a team, drove or herd.

People just prefer to call them herd

Notable points in Agricultural Science

Below are characteristics of gymnosperms:

  1. Their seeds have cones that protect them.

  2. Sepals and petals aren't present in their cones.

  3. Stigma and style are absent.

  4. They do not produce fruits. Only seeds are formed.

  5. Companion cells are absent.

  6. Sporophyll form the cones.

  7. Anther and filament are absent.

  8. The ovules are not present in the ovary.

  9. Gymnosperms do not possess flowers.

  10. Please read on the anatomical differences between gymnosperms and angiosperms here

The flower is the reproductive organ in plants' sexual reproduction. In order to achieve a successful sexual propagation or reproduction in plants, the floral parts of the flower are utilized.

The floral parts of a flower consists of the followings:

  1. Sepals

  2. Petals

  3. Stamen

  4. Carpel

The stamen is male portion of a plant. It consists of the anther and filament.

The carpel (or pistil) is the female portion of the plant. It consists of the stigma, style and ovary.

Please read more on plants' sexual reproduction here

An organism will be considered a pest if it does one of the followings:

  • Attack crops and eat its seeds, roots, stem, leaves and flowers. Examples are locust and grasshoppers.

  • Cause damage to stored food, fruits or other agricultural produce. Some may even urinate or deaficate on these products. Examples are rodents, cockroaches and mice.

  • Attack and kill farm animals like goats, sheep and cattle. Examples are foxes, wild cats and snakes.

  • Act as disease vectors. A vector is an organism that carries parasite and other disease causing organisms, without being affected; but when they introduce the parasites into their host, such host becomes infected with disease. Examples of vectors are rodents and mosquitoes.

    Please read more on vectors of diseases here.

Below are the classification of crops based on their uses:

  • Oil crops

  • Vegetable crops

  • Latex crops

  • Drug and Medicinal crops

  • Beverage crops

  • Fibre crops

  • Fruit crops

  • Root and Tubers

  • Legumes

  • Spices

  • Cereals

All crops are plants but not all plants are crops. Below are some instances:

  • Weeds are considered as plants, not crops.

  • Parasitic plants are not necessarily crops. Examples of parasitic plants include mistletoe, corpse flower and striga.

  • Carnivorous or insectivorous plants are not necessarily crops. Examples are sundew, venus flytrap and pitcher plant. The image below shows a carnivorous plant (venus flytrap).

Venus flytrap - Len Academy


Meanwhile, always understand that all crops are plants, and they are grown for food, money or something beneficial.

Please read on plants versus crops here