(a) Classes of credits in agricultural production are: (i) Short term credit: (i) This is a productive credit which the borrower is expected to refund in a year or less. (ii) it may be used to purchase livestock feed, fertilizers, seeds, fuel, and to pay for hired labour. (ii) Medium term credit: (i) This is to be repaid within a period of two to five (2- 5) years. (ii) it may be used to purchase machinery, breeding livestock or housing for livestock. (iii) Long term credit: (i) is repayable within a period of 5 to 20 years. (ii) can be used to purchase costly fixed -assets, such as land, construction of farm buildings, dams and irrigation project.
(b)(i) Sources of agricultural credits in Nigeria are: (i) Nigeria Agricultural and Co-operative Bank. (ii) Commercial Banks. (iii) Co-operative Society (ies). (iv) Agricultural Credit Guarantee Scheme. (v) National Directorate of Employment. (vi) Private Money Lenders. (vii) Friends and relatives. (ii) Reasons for difficulties in obtaining loans from banks for agricultural production by farmers include: (i) farmers do not have acceptable collaterals to obtain loan.(ii) the risk of crop failure is very high. (iii) interest rates charged are too high for the returns from the farming activities. (iv) no records of all their farming activities can be used to assess their credit -worthiness. (v) the farmers may not be able to repay the principal, not to talk of interest charged in case of natural disaster. (vi) Most farmers do not take insurance on their farms. (vii) lack of moratorium of deferment of payment of loans for farmers.