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AGRICULTURAL
POLICIES AND THE NIGERIAN ECONOMY: A CRITICAL ASSESSMENT
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Agriculture
in the context of the economy is tied with the various sectors and is essential
for generating broad based growth necessary for development. As such, it is
fundamental to the sustenance of life and however poses as the bedrock of
economic development, especially in the provision of adequate and nutritious
food so vital for human development and industrial raw materials.
Specifically,
agriculture comprises of the main fields of human activity and basically
characterizes of primary production of food and cash crops, livestock, fishing,
forestry and marketing of the products realized in these activities. It
contributes immensely to the development of the economy in various ways,
ranging from the provision of food for the increasing population, supply of
adequate raw materials (and labour input) to a growing industrial sector, a
major source of employment, generation of foreign exchange earnings and,
provision of market for the products of the agrarian sector (Okumadewa, 1997).
The agrarian sector has a strong relationship with the economy; hence, this
raises concern for the implementation of effective agricultural policies within
the Nigerian economy.
Support for
agriculture is widely driven by the public sector, which has established
institutional support in form of agricultural research extension, commodity
marketing, input supply and land use legislation, to fast-track development of
agrarian sector to achieve the aim of economic development. The importance of
the agrarian sector, also suggests the intervention of the private sector
through sponsorship of research and breakthrough on agricultural issues in
Universities, capacity building for farmers and, most importantly, the
provision of fund for farm businesses. In addition, international governmental
and non-governmental agencies including the World Bank Fund and Agricultural
Organization of the United Nations, also contribute through on-farm and
off-farm support in form of finance, input supply, strengthening of technical
capacity of other support institutions, among others.
For
developing countries, agriculture plays the role of promoting economic
development by increasing availability of food and provision of raw materials
for industrial production. Also, it expands the size of the domestic market for
industrial goods; raises the level of savings and capital formation, and also
earning foreign exchange from exports. In the case of Nigeria, the attention
given to the agricultural sector has also given room for capital development,
revenue generation and job creation, since most economic activities are
predominantly agricultural. Indeed, as observed in some quarters, the country
received its principal stimulus for growth from agriculture in the 1960s and
1970s (Anyanwu, 1997; Central Bank of Nigeria, 1997).
In the light
of the above reality, the Nigerian economy, during the first decade after
independence could reasonably be described as an agricultural economy, because
agriculture served as the engine of growth of the overall economy (Ogen, 2003).
From the standpoint of occupational distribution and contribution to the GDP,
agriculture was the leading sector. During this period Nigeria was the world’s
second largest producer of cocoa, largest exporter of palm kernel and largest
producer and exporter of palm oil. Nigeria was also a leading exporter of other
major commodities such as cotton, groundnut, rubber and hides and skin (Alkali,
1997). The agricultural sector contributed over 60% of the GDP in the 1960s and
despite the reliance of Nigerian peasant farmers on traditional tools and
indigenous farming methods, these farmers produced 70% of Nigeria's exports and
95% of its food needs (Lawal, 1997).
However, at
the dawn of the 1970s, agriculture lost its dominant position to crude oil and
natural gas production, in terms of contribution to GDP, the export basket,
foreign exchange earnings, government revenue and so on. Output deteriorated
and the sector generally stagnated. The food situation became disturbing and
almost alarming to the extent that, Nigeria, once one of the leading producers
of certain agricultural goods, became an importer of some of the same products,
especially food grains.
In order to
reverse this trend, the country adopted series of agricultural revival
strategies and programmes targeted at different activities in the agricultural
sector, ranging from finance, pricing, infrastructure, institutional
development, marketing, storage and so on. The efforts were further boosted by
increased earnings from crude oil sales. Massive funds were invested in the
sector, several institutions were created and the work force developed. In
spite of all this, agricultural production remained low and lagged behind other
sectors. Food supply was still below the demand and the food import bill
continued to grow. The sector was also seen as a drag on the other sectors of
the economy.
According to
Prabuddha and Babu (2010), Agricultural policies in Nigeria have undergone four
main phases: The first from 1960 to 1969; the second from 1970 to 1979, the
period of the oil boom; the third from 1980 to the late 1990s, during the
structural adjustment program (SAP); and the period of the NEEDS framework. On
the contrary, Ayoola (2011) classified agricultural policies and programmes in
Nigeria into four categories, namely: agricultural policies and programmes in
the colonial era, the post-colonial era, the military era and the present
Fourth Republic.
Contrarily,
sustainable agricultural development is propelled by agricultural policies. The
first national policy on agriculture was adopted in 1988 and was accepted to
remain valid for about fifteen years, that is, up to year 2000. Also, in year
2001, a new policy document on agriculture, was lunched. The new policy
document has most of the features of the old ones, but with more focused
direction and better articulation (Uche, 2011). However, the Fourth Republic
has witnessed the emergence of several policies and programmes channeled
towards agriculture, and these range from the National Economic Empowerment and
Development Strategy (NEEDS), National Special Programme on Food Security
(NSPFS), and the Root And Tuber Expansion Programme (RTEP) of the Obasanjo
administration; the 7-Point Agenda of Yar’Adua administration which anchored on
land reforms and food security; the Agricultural Transformation Agenda of
Jonathan administration, and the Agricultural Promotion Policy (APP), otherwise
referred to as the “Green Alternative” which represents a policy document of
the present administration of President Muhammadu Buhari that seeks to build
upon the goals of the ATA.
Furthermore,
agricultural policies are supported by sub-policies that facilitate the growth
of the sector. As such, the implementation of agricultural policies is however
moderated by macro-economic policies which provide the enabling environment for
agriculture to grow alongside other sectors. These policies usually have major
impact on profitability of the agricultural system and the welfare of farmers
as they affect the flow of funds to the sector in terms of budgetary
allocation, credit, subsides, taxes and therefore, must be in harmony and
mutually reinforcing with the agricultural policies. The macro-policies
comprise the fiscal, monetary, trade budgetary policies and other policies that
govern macro-prices.
In a
nutshell, agricultural policies provide for among others, the adequate
financing of agriculture. As such, the role of the agricultural sector in the
diversification of the economy cannot be over emphasized, given that it
guarantees food security of any nation.
It is
against this background that this study seeks to undergo a critical assessment
of the impact of agricultural policies on the Nigerian economy.
1.2 Statement of the Research Problem
Agriculture
no doubt remains the main-stay of the Nigerian economy. Studies revealed that
about 80% of the Nigerian population engage in agricultural-dominated
activities. In other words, the agricultural sector in Nigeria from the right
sense of judgment is supposed to be the major source of revenue to government,
as well as to the Nigerian citizens. This was exactly the case in the 1960s to
1970s, considering the achievements made from the earnings of the agricultural
sector in the then three regions of Nigeria, namely, Eastern, Western and
Northern regions. A cursory look at the activities of the marketing boards of
that era showed that the earnings from the major commodities in the three
regions recorded considerable growth in their export earnings.
The Eastern
Nigeria Marketing Board, whose main office was located at Port Harcourt,
handled the following commodities: palm kernels, palm oil, cocoa, copra,
beniseed, soya beans, and groundnuts. Here, the oil palm produce accounted for
the enormous profits which boasted the agricultural sector in the first decade
after independence.
The Northern
Nigeria Marketing Board, whose main office was located at Kano, was responsible
for the purchase of the following commodities: groundnuts, cotton, beniseed,
soya beans, cocoa, and palm produce. Of these products, groundnuts produced the
most revenue, and groundnuts and cotton provided the majority of all purchases
and sales. However, in the late 1960's, oil-palm produce showed a considerable
increase in its contribution to the trading account and these earnings further
accounted for the boast seen in the agricultural sector at that time.
The Western
Nigeria Marketing Board with its main office at Ibadan handled the following
commodities: cocoa, oil palm produce, cotton, and fresh fruit. Cocoa served as
the major commodity which contributed immensely to the growth recorded in the
agricultural sector.
Specifically,
the exports handled by the Marketing Boards accounted for 63 % of the value of
total exports recorded in the agricultural sector. Groundnut exports (including
groundnut oil equivalents) grew at 5.2% compound annual growth rate in 1964 -
1966. Groundnut processing further increased rapidly in that era. About 450,000
tons of groundnuts were processed in 1968. Also, 15% of the world exports of
oil palm was shipped from Nigeria between 1964 -1965. The corresponding figure
for palm kernels was 56 %, while the value of raw cocoa exports from Nigeria
was 22.1% of the value of all domestic exports in 1964 (Osuala, 1970).
Generally,
Nigeria was, indeed, a leading agricultural nation in the 1960s and 1970s. The
sector once dominated the economy, accounting for well over 60% of the GDP. Its
output in the food sub-sector was also enough to meet local demand. The sector
employed, and still employs, over 75% of the population, especially in the
rural areas. In terms of contribution to external trade and government revenue,
it also accounted for between 66% and 73% of the total foreign exchange
earnings as it dominated the export basket and helped ease pressure on the
country's balance of payments. Most of the foreign exchange was earned through
the export of various cash crops including palm produce, rubber, cocoa, cotton,
groundnut, beniseed and coffee (Anyanwu, 1997).
However,
despite the dominant role of the petroleum sector as the major foreign exchange
earner, agriculture remains the mainstay of Nigeria’s economy. In addition, to
contributing the largest share of the country’s GDP, it is the largest non-oil
export earner, the largest employer of labour, and a key contributor to wealth
creation and poverty alleviation, as a large percentage of the population
derives its income from agriculture and agriculture-related activities.
Over the
years the rate of growth in agricultural production has stagnated and failed to
keep pace with needs of a rapidly growing population, resulting in a
progressive increase in import bills for food and industrial raw materials.
However, with the discovery of crude oil in Nigeria, agriculture has gradually
been neglected. Also, the potential of the agri-business sector as a major
employer of the growing labour force and an earner of foreign exchange has also
been undermined. As a result, the large majority of Nigeria’s population, many
of whom live in rural areas, remain poor. Similarly, Nigerian efforts in
agricultural development over the past three decades have failed to improve the
country's economy. A review of the sector depicts a gloomy picture. Performance
is reflected in environmental degradation, mounting food deficits, and decline
in both gross domestic product and export earnings, while retail food prices
and import bills have been increasing. These effects have further impoverished
the smallholder farmers, locking them into a poverty web (Osemeobo, 1992).
Also, public
expenditure on agriculture has, however, been shown not to be substantial
enough to meet the objectives of Government agricultural policies. For a developing
country with a mono-product oil economy such as Nigeria, Government’s
indifference to agriculture portends great danger to the economy for many
reasons. For instance, fluctuating food prices are a precursor of inflation.
Secondly, from the expenditure approach to national income accounting, it is
likely that Engel’s Law that a large chunk of expenditure in developing
economies goes to food consumption, meaning that shocks to the domestic
agricultural production and supply could be damaging to price stability. There
is also the perspective of food security, in an era when food has been used as
a weapon of War (United Nations Oil for food Deal in Iraq) and as a bargaining
tool (North Korea- United States Food Deal). Even within Nigeria, the federal military
government during Nigeria-Biafra War used food blockage as a tool of war.
Notably, the
Nigeria Poverty Assessment Report (2007) attributed the galloping increase in
the Nigerian poverty rate to low and declining yield or productivity in
agriculture, and this contributes significantly to rural poverty. The Nigerian
Poverty Assessment Report further contended that in the light of the poor state
of agriculture, as the survey results show, households whose heads are engaged
in the sector tend to have the highest level of poverty incidence. Based on
this, scholars have contended that the neglect meted on the sector has
contributed to and has hindered agricultural productivity, and reduction in
income from agriculture in Nigeria is linked to poor policy formulation and
implementation in the sector. Also, it was observed that most of the policies
of government on agriculture have failed to address the issues of land tenure
system, provision of adequate agricultural facilities to farmers, access to
agricultural micro credits, access to markets for the sale of agricultural
products, provision of agricultural education to rural farmers on mechanized
farming, among others.
On the other
hand, improving agricultural extension services as well as providing adequate
agricultural infrastructures have remained poor. Over 85% of Nigerian farmers
have no access to agricultural extension services and necessary agricultural
infrastructure that increases productivity (Uche, 2011). Therefore, there is no
empirical evidence to show for the enormous resources put into the agricultural
sector as a means to diversifying the Nigerian economy from its crude oil based
economy.
As a matter
of fact, the initiation of these policies do not take into consideration, the
Environmental Impact Analysis (EIA), the Economic Impact Analysis (EIA), and
the Social Impact Analysis (SIA) which would have helped to give the problems
of agriculture in Nigeria a holistic approach.
Apparently,
the intended goals and objectives of agricultural policies such as: generating
massive employment through agriculture and agro-based businesses, reduction of
high poverty rate, ensuring sufficiency in the supply of food for the Nigeria’s
teeming population, improving per capita income of Nigerians who engage in
agriculture, taking comparative advantage of the Nigerian agricultural products
in the international markets, among others, have remained unachievable to some
extent considering some research findings on the assessment of agriculture in
Nigeria.
It is
therefore against this backdrop that this study will conduct a critical
assessment of the impact of agricultural policies on the Nigerian economy. In
view of the fore-going, the study raises the following questions:
(i) Have agricultural policies made
significant impact on the Nigerian economy?
(ii) Have the agricultural policies impacted
on the growth and development of agricultural sector in Nigeria?
(iii)What
are the factors militating against the good agricultural policies in Nigeria?
(iv) Do the formulation and implementation of
agricultural policies follow stipulated guidelines and procedures?
(v)What are
the measures to be adopted in improving formulation and implementation of
agricultural policies in Nigeria?
1.3 Objectives of the Study
For purpose
of clarity, the objectives of this study are grouped into two categories
namely: Broad and specific.
- The broad objective of the study is
to undergo a critical assessment of the impact of agricultural policies on the
Nigerian economy.
- The specific objectives of this
study are to:
(i) Ascertain the progress made by
agricultural policies so far on the Nigerian economy.
(ii) Examine whether the impact of
agricultural policies have reflected on the growth and development of the
agricultural sector in Nigeria.
(iii) Identify the factors militating against
good agricultural policies in Nigeria.
(iv) Proffer possible solutions towards
improving the formulation and implementation of agricultural policies in
Nigeria.
1.4 Research Hypotheses
The
following hypothetical assumptions have been formulated to further guide the
study:
i. Effective implementation of
agricultural policies is likely to facilitate the growth of the Nigerian
economy.
ii. The growth of the agricultural sector
is a function of the development of agricultural policies in Nigeria.
iii. High incidence of corruption tends to
militate against agricultural policies in Nigeria.
1.5 Significance of the Study
The
significance of the study presents the value or contribution which the research
will make to the existing knowledge. As such, the significance of this study is
presented thus:
Theoretically,
this study has the potential of contributing greatly to the growth of existing
theories in social sciences particularly in public administration. It will help
to enrich the bank of knowledge through its reliable findings on the critical
assessment of how agricultural policies affect the Nigerian economy. The study
will no doubt assist in improving the frontiers of knowledge, especially in the
management of the public policies and decisions which bothers on the agricultural
sector in Nigeria. Also, the study will be of immense benefit and will however
pose as a reliable tool which will help in the monitoring of the progress made
so far by the government in improving the Nigerian economy through agriculture.
On the other hand, the study will assist in unveiling the challenges or factors
militating against effective implementation of government policies and
programmes on agriculture, and will proffer useful suggestions that will be
geared towards ensuring the successful achievement of the goals of such
agricultural policies and programmes.
Empirically,
this study will serve as a paradigm for future researchers who may in due time
consider it imperative to undergo studies that bothers on the assessment of the
impact of agricultural policies on Nigerian economy. In other words, this
research will serve as a useful and veritable bibliographical reference which
will stimulate research for other related studies in relation to agricultural
policies and how it impacts on the Nigerian economy.
Practically,
this study is considered significant because it will contribute in providing
decision makers and other key actors in the government with the road- maps that
will necessitate prompt, responsive and efficient policy making in Nigerian
agricultural sector. It will also suggest the panacea through which frequent
failures in Nigerian agricultural policies can be effectively tackled.
In a
nutshell, this study has the potential to strategically improve the practical
steps aimed at the implementation of government’ policies on agriculture and
this will be actualized through its advocacy on reforming the public
bureaucracies in Nigeria, especially those concerned with the implementation of
government policies on agriculture.
1.6 Scope of the Study
The scope of
analysis for this study is clearly restricted to the geographical location
known as Nigeria. The focus of the study is to undergo a critical assessment of
the impact of agricultural policies on the Nigerian economy. But due to the
expanse nature of the study area, the study will however be limited to Abia
State. The State is located within the South Eastern region of Nigeria and lies
between Longitude 040 45’ and 060 07’ North and Latitude 070 00’ and 080 10’
East. Abia State is bound by Imo State at the Western border; Ebonyi and Enugu
States at the North; Cross River and Akwa Ibom States at the East and Rivers
State at the South. Its population stood at about 2.883,999 persons, with a
relatively high density at 580 persons per square kilometer (National
Population Commission, 2007); (Rotary International (2006).
Abia State
is divided into administrative blocks called Local Government Areas which is
grouped into three (3) agricultural Zones namely: Ohafia, Umuahia and Aba
Zones. In terms of occupation, about 70% of Abians are farmers and have the
potentials for the production of crops (both arable and permanent), livestock,
fish and food processing (ABSG, 1992). The study will be guided by structured
questionnaires which will be administered on rural farm households by the
researcher. For the purposes of social inclusiveness, male and female - headed
households will be selected, and this will help to constitute the sample size
that will serve as a generalization of the entire population. The study will be
specifically anchored on the evaluation of the performance of the Agricultural
Development Programme (ADP) which represents a joint Federal - State Government
collaborative effort aimed at increasing food production for rural dwellers and
raising the income level of small scale farmers by making provision for
improved seeds, fertilizer, pesticides, credit facilities and infrastructural
facilities, shuttling between its objectives, achievements, as well as the
challenges of the programme towards curbing the decrease in agricultural
productivity through sustenance of domestic food production. Also, efforts will
be made in assessing the level of investment made by the government in the
agricultural sector and further examining the factors that account for the
shortcomings in that sector.
1.7 Definition of Operational Terms
For the
purpose of this study, the following terms are operationally defined thus:
· Agricultural Sector: The
agricultural sector in the context of this study is identified as a vital
sector of the Nigerian economy that is characterized by food production, animal
husbandry, forest conservation, fisheries, among others. It further constitutes
of the activities of land tenure system, food security, manpower development,
and extension services etc.
· Agricultural
Policies/Programmes: The agricultural policies or programmes emerges as policy
documents or decisions made by government and directed towards the achievement
of specific goals that will contribute positively to the agricultural sector
and subsequently boasting the Nigerian economy. Here, efforts will be made in
examining these policies and programmes, as well as their efforts towards
revamping the Nigerian Economy.
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