AGRICULTURAL CAPITAL MARKET

CAPITAL MARKET

Definition: Capital market is a market for raising medium-term and long-term loans for Agric-business. In this market, medium and long-term loans are made available for investment.

They are institutions, structures and mechanism whereby medium-term and long-term loans are pooled and made available to investors in Agric-business.

INSTITUTIONS INVOLVED IN THE CAPITAL MARKET

THE INSTITUTIONS INVOLVED IN THE CAPITAL MARKET ARE:
(i) Commercial banks
(ii) Mortgage banks
(iii) Nigerian Agricultural, Cooperative and rural Development bank (NACRDB)
(iv) Insurance companies
(v) National Economic Reconstruction fund (NERFUND)
(vi) NIGERIAN Social Insurance Trust (NSITF)
(vii) Stock exchange
(viii) Quoted companies on the stock exchange
(ix) Merchants Banks

SOURCES OF FUND FOR THE CAPITAL MARKET

(i) Bonds: Bond is an amount of money which has to be given at a certain date or dates in future. The issue of bonds is a method of borrowing by most commercial farmers.
(ii) Issue of preference stock: Company choose this to raise capital. If a company have financial trouble, the buyers of share get special status. If profits are limited than owners will be paid the dividend after bond holders.

(iii) Shares: The capital of a limited company is divided into shares, which may be in units.
(iv) Debentures: These are loans of a long-term nature. They carry a fixed rate of interest.
(v) Selling of common stock: If the financial condition of the farming business is good, than it can raise the capital by issuing common stock. Banks assist the companies to do the investment and issue stock. Investors get interested if the company pays large dividends and offer steady income. Value of shares increases if investors expects the corporate earnings to rise.
(vi) Borrowing: Companies used to raise short-term capital by getting the loans from banks or other sources.

rice processing
rice processing mill

ROLES OF CAPITAL MARKET

: Capital markets do play an important roles in Agric-business. These roles or functions are as follows.
(i) Mobillisation of long term funds for on-lending: It enables long term fund to be mobilized for the development of agric-business.
(ii) Reduction on over reliance on money market: Capital market makes it possible for investors in agric-business not to over relied on money market for their fund.

(iii) Avenue for lending and borrowing: Capital market provides local opportunities for borrowing and lending for long term purposes.
(iv) General running of the economy: The existence of Capital market encourages the general public to participate in the running of the economy of the country.
(v) Challenging of funds to productive investment: The capital market ensures that funds can be mobilized and channel to productive investment.

HERE YOU WILL FIND EVERY AVAILABLE TOPICS ABOUT

  1. economic tools for nation building
  2. budgeting
  3. factors affecting the expansion of industries
  4. mineral resources and the mining industries
  5. demand and supply
  6. types of demand curve and used
  7. how copopulation

    market concept    

    money market

    raises funds for expansion

    WEED AND THEIR BOTANICAL NAMES
    1. ENVIRONMENTAL FACTORS AFFECTING AGRICULTURAL PRODUCTION
    2. DISEASES
    3. 52. SOIL MICRO-ORGANISMS
    4. ORGANIC MANURING
    5. FARM YARD MANURE
    6. HUMUGRAZING AND OVER GRAZING
    10. IRRIGATION AND DRAINAGES

    7. COMPOST
    8. CROP ROTATION
    9.
    11. IRRIGATION SYSTEMS
    12. ORGANIC MANURING
    13. FARM YARD MANURE
    14. HUMUS
    15. COMPOST
    16. CROP ROTATION

    IRRIGATION AND DRAINAGE
    19. IRRIGATION SYSTEMS
    20. INCUBATORS
    21. MILKING MACHINE
    22. SIMPLE FARM TOOLS
    23. AGRICULTURAL MECHANIZATION
    24. THE CONCEPT OF MECHANIZATION
    25. PROBLEMS OF MECHANIZATION

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