CHAPTER ONE

INTRODUCTION

1.1       Background of the study

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Agriculture has remained the "mainstay" of Nigerian economy and economic development. Conventionally, the agricultural sector has been ascribed the following roles:

Adequate food supply for growing population. Serving as a major source of employment. Providing market outlets for industrial products. Providing a major source of foreign exchange earnings. Structural base for rural, economic growth and development.

The evaluation of the performance of the Nigerian agriculture is based on the extent to which these roles have been satisfactorily performed. The oerall importance of agricultural sector in Nigerian economy is indicated by its share of the Gross Domestic Product (GDP).

In 1990, Nigeria population was 119 million with a land area of 910,770 square kilometers and 31 % of this is arable land, while labour force in agriculture was 60 % (USDA, 1991).

'According to  CBN  (1986) the  share of  GDP for agriculture between

1960 - 1969 was 56 percent on the average but between 1970 - 1979 it declined to an average of 24 percent of the GDP. From available CBN

c;t      cr,cs, agricultural share of the GDP is on decline*-from     :bout 1980 to

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Prior to independence, agricultural earnings served as engine for economic growth and aevelopment. After independence, the contribution of the agricultural sector to GDP declined significantly over time. This is due to slower growth of the sector relative to the other sectors of the Nigerian economy. Indication of problems in the Nigerian agriculture

srartecl  to  manifest  from  the  first  decade of  our  independence  (1960 -

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I                              These signals were clearly evident from increasing food supply short falls, rising food prices and declining foreign exchange earning from the agricultural sector.

The second decade of independence (1970 - 1979) witnessed rapid deterioration in Nigerian agricultural situation. Not only that there were widening food supply demand gaps and increasing food import bills, but thcre also existed increased decline in government revenue from ag1-ick~lture(Ogunde et al, 1991; CBN, 1996). The situation was further coniplicated by the 1967170 Nigerian Civil War, severe drought in some parts of the country, government fiscal and monetary policies, and above

all,     an     "Oil   Boom"  nicknamed   "Oil   Doom"   which  created     serious

distortions i l l the