THE IMPACT OF AGRICULTURAL DEVELOPMENT ON NIGERIA ECONOMIC GROWTH (1990-2015)

THE IMPACT OF AGRICULTURAL DEVELOPMENT ON NIGERIA ECONOMIC GROWTH (1990-2015)

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CHAPTER ONE

1.1       Introduction

Nigeria is generously endowed with abundant natural resources including biological and non-biological resources. The resources of the entire world should be developed to the fullest extent possible with available means as a whole can progress only by the efficient and rational use of the natural resources. Resources depend on importance attached to it. Hence, agriculture constitutes one of the most important sectors of the economy. The significance of agriculture resource in bringing about economic growth and sustainable development of a nation cannot be underestimated. Agriculture contributes to the growth of the economy, provides employment opportunities for the teaming population, export revenue earnings and eradicates poverty in the economy. Abayomi (1997) stated that stagnation in agriculture is the principal explanation for poor economic performance, while rising agricultural productivity has been the most important concomitant of successful industrialization.

Oji-Okoro (2011) is of the opinion that agriculture resource has been an  important sector in the Nigerian economy in the past decades, and is still a major sector despite the oil boom; basically it provides employment opportunities for the teeming population, eradicates poverty and contributes to the growth of the economy.

1.1.1    Agricultural Programs in Nigeria: 1980-2014

Although the programs aimed at restructuring agricultural productivity in the country could not maximize its objectives because of some inherent Nigerian problems. One of the identified sources of failure for these programs has been strongly linked to a lack of continuity that characterized their operation and implementation by the successive governments (Tribune, 2010). In this section, we would do a review of some key programs as well as their impact and contribution to national economic growth.

The policies reviewed were predominately policies made during the military era with the exception of the civilian administration led by Shehu Sahagari between 1979 to 1983. The crux of this policy was aimed at removing some constraint affecting agriculture and setting up of appropriate framework for agricultural development. These policies and programs includes;

 1.1.2   National Accredited Food Production Project

The National Accelerated Food Production Program (NAFPP) was one of such program which was targeted at improving agricultural extension program. The core issue was that basic research existed on improved agricultural practices but there wes no effective mechanism to distribute it to the farmers, thus the need for the facilitation of extension services. The program was launched by the Federal Department of Agriculture, under the leadership of General Yakubu Gowon in 1972.

The objective of the NAFPP program was to stimulate a significant increase in the production of staple foods; wheat, rice, maize and cassava. The target was that the northern states where huge percentages of the farmers engage in subsistence agriculture would drive the attainment of the goals within a short period of time. By the program design, the program was to spread from the northern states across other states of the federation. The workability of the program was tested with the establishment of pilot centers in states such as Anambara, Imo, Ondo, Oyo, Ogun Plateau and Kano states. The pilot centers were supplied with production kits as well as mini kits in the first phase of the program but the program ended abruptly due to some challenges encountered. These challenges include;

·       Poverty of farmers to continue with the other phase of the program. The delivery of the kits was the first stage which was funded by the government. The other two stages which involved cultivation and production were to be handled by the farmers who could not cope because of the huge financial implication and poverty. This dissuaded farmers from participating in the program.

·       Problems of organization. The farmers were scattered across different geographical areas, hence it was difficult for most of them to form cooperative societies. The formation of cooperative society was necessary to access disbursed loans and farm inputs. The inability of farmers to form cooperative societies led to the partial collapse of the program.

·       The inconsistency of the Nigerian government was also another key factor that affected this program. The government did not wait for the NAFPP program to mature before venturing into the operation feed the nation program which overrides the later.

·       There was insufficient research information to drive the efficiency of the programs. The researchers only based on samples from a selected location which was not a true reflection of the agricultural condition of the different part of Nigeria. Hence, most of the test kits were failures. In addition, there was no effective feedback mechanism from the extension workers to allow for adjustment and improvement of the program which eventually led to its collapse. 

1.1.3    Agricultural Development Projects (ADP):

ADP was established in 1989 and made outstanding contribution to agricultural productivity that motivated the government to expand the programs to cover about nineteen states in the federation. The ADP sprouted from the Integrated Agricultural Development Projects (IADP) which was in operation since its establishment in 1974, with operations in the North West, North East and North Central. The pilot schemes were resident in Funtua, Gusau and Gombe.

The approach of the ADP was to build a collaborative force that would be sufficient to drive agricultural productivity in the country. Hence, there was a partnership and tripartite arrangement between the Federal government, the state government and the World Bank. Till date, the ADP is one major program that has impacted agricultural and rural development in Nigeria owing to its reliance on small scale farmers as the bane for increase in food production. The feedback mechanism was very efficient, it allows a decentralized decision making process that allow farm families to respond to an innovation, technology and subsidy in a way that reflects their personal judgment.

The objectives of the program are to bring about solution to the decrease in agricultural productivity by sustaining domestic food supply, through massive infusion of World Bank funds, the ADPs were established to provide extension services, technical input support and rural infrastructure (Ayoola, 2001) to the farmers/rural dwellers. The program was not without some challenges which are;

·       The problem of funding, associated with the fall in oil prices in 1982. This further resulted in inadequate funding for research and operation of the programs. Competent staff could not be recruited and it inhibited the implementation of the program.

·       The emphasis of the ADP was on the use of modern agricultural input technology which can only be done with large farm size and the practice of mono-cropping. This brought huge cost implications to the farmers who mostly produce on scattered farmlands and practices mixed cropping.

·       There were challenges emanating from the declining inability of the government to provide subsidies for the farmers. There was also poor supply of subsidized inputs like fertilizer for farmers, resulting in low output from the scheme.

·       Other challenges includes; frequency of labor mobility, limited involvement of input agencies, dwindling funding policies and counterpart funding, intricacies of technology transfer etc.

1.1.4    Green Revolution (GR)

Shehu Shagari inaugurated the Green Revolution in April 1980. The program was intended to leverage on the vast agricultural potential of the country to increase the production of basic food and raw materials in order to ensure self-sufficiency and food security of the nation.

In addition there was gross decline in livestock production which the program was intended to boost. The program was intended to stimulate the production of fish and other livestock to meet the domestic and export needs of the country. This was to tap into the economic diversification of the nation’s foreign exchange earnings through production and processing of export crops. As part of the program, agrochemicals, improved seedlings, irrigation system, mechanization, credit facilities, improved marketing and pricing policy were guaranteed by the government, leading to success in the program.

There were some challenges in the attainment of the program objectives. The major problem was delay in the execution of most of the projects outlined in the project. This was a major problem because of the seasonal nature of agriculture in Nigeria. Secondly, the corruption in the agricultural sector coupled with poor monitoring and evaluation of projects affected the projects.

1.1.5    Directorate for Food Roads and Rural Infrastructure (DFRRI)

The Directorate was initiated in Nigeria in January 1986 under General Ibrahim Babangida’s administration as an effort to set up institutional bases for agricultural operation and coordination in the country. It was a domestic principle that follows the social dimensions of adjustment (SDA) that was embarked upon in most Sub-Saharan African countries in consonance with World Bank, African Development Bank and the United Nations Development Program (UNDP).

The program was designed to improve the quality of life  and standard/level of living of the rural dwellers through the use of many resources that exist in the rural areas and mass participation of the rural people to ensure improvement in nutrition, housing, health, employment, road, water, industrialization etc. The poor quality of infrastructures provided by the directorate probably due to corruption and mismanagement of fund affected the impact of the program. Some social scientist like Idachaba (1988) noted  the program was marred by lack of proper focus and program accountability.

 The pervasive influence of agriculture on Nigeria’s economic and social development has also been articulated by Oluwasami (1966). A strong and efficient agricultural sector would enable a country to feed its growing population, generate employment, earn foreign exchange and provide raw materials for industries. The agricultural sector has a multiplier effect on any nation’s socio-economic and industrial fabric because of the multifunctional nature of agriculture (Ogen 2007).

Agriculture has been defined as the production of food and livestock and the purposeful tendering of plants and animals, (Ahmed, 1993). He stated further that agriculture is the mainstay of many economies and it is fundamental to the socio-economic development of a nation because it is a major element and factor in national development. In the same view, Okolo (2004) described agricultural sector as the most important sector of the Nigeria economy which holds a lot of potentials for the future economic development of the nation as it had done in the past. Notwithstanding the enviable position of the oil sector in the Nigerian economy over the past three decades, the agricultural sector is arguably the most important sector of the economy. Agriculture’s contribution to the Gross Domestic product (GDP) has remained stable at between 30 and 42 percent, and employs 65 per cent, of the labour force in Nigeria (Emeka 2007).

Generally, the agriculture sector contributes to the development of an economy in four major ways-product contribution, factor contribution, market contribution and foreign exchange contribution (Kuznetz 1961; Mackie 1964; Abayomi 1997; Abdullahi 2002; World Bank 2007). The objective of this study therefore is to analyze the contribution of the agricultural sector to the development of Nigeria economy between 1970 and year 2010 using a econometric technique.

1.2       Statement of the Problem

The literature has reported that inspite of Nigeria’s rich agricultural resource endowment, there has been a gradual decline in agriculture's contributions to the nation's economy (Manyong et al., 2005). In the 1960s, agriculture accounted for 65-70% of total exports; it fell to about 40% in the 1970s, and crashed to less than 2% in the late 1990s. The decline in the agricultural sector was largely due to rise in crude oil revenue in the early 1970s. Less than 50% of the Nigeria’s cultivable agricultural land is under cultivation . Even then, smallholder and traditional farmers who use rudimentary production techniques, with resultant low yields, cultivate most of this land. The smallholder farmers are constrained by many problems including those of poor access to modern inputs and credit, poor infrastructure, inadequate access to markets, land and environmental degradation, and inadequate research and extension services. The inability to capture the financial services requirements of farmers and agribusiness owners who constitute about 70 percent of the population is inclusive (Lawal, 2011).

Low agricultural output has a negative effect on the Nigerian economy as a whole. Several factors have been identified to enhance or retard growth in the agricultural sector. These factors include education (Huffman 1949; Pudasaini 1983; Aheam et al. 1998; Weir 1999), infrastructure (Querioz and Gaultam 1992; Gopinath and Roe 1997; Yee et al. 2000 and Venk Atachalam 2003) and inflation (Johnson 1980; Bullard and Keating 1995; Andres and Hernando 1997; Gokal and Hanif 2004).

1.3       Objective of the study

The main objective of this study is to examine the impact of agricultural resource on the Nigerian economy.

1.4       Research Question

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