Project Abstract

Project Overview

<p> <b></b></p><h4><b><b>INTRODUCTION</b></b></h4><p><b><b></b></b></p><b><b><p><b>1.1 &nbsp; &nbsp; &nbsp; </b><b>BACKGROUND OF THE STUDY</b></p><p><b></b></p><b><p>Agriculture is concerned with the husbandry of crops and<br>animals for food and other purposes. It<br>is the foundation upon which the development of stable human communities, such<br>as rural and urban communities has depended on in many parts of the world. The study of economic history provides us<br>with ample evidence that an agricultural revolution is a fundamental<br>pre-condition for economic development. <br>The agricultural sector has the potentials to be the industrial and<br>economic springboard from which a country’s development can take off. Indeed, more often than not, agricultural<br>activities are usually concentrated in the less developed rural areas where<br>there is a critical need for rural transformation, redistribution, poverty<br>alleviation and socio-economic development.</p><p>The agricultural sector has the potentials to shape the<br>landscape, provide environmental benefits such as conservation, guarantee<br>sustainable management of renewable natural resources, preserve biodiversity<br>and contribute to the viability of rural areas. <br>Through its spheres of activities at both the macro and micro levels,<br>the agricultural sector is strategically positioned to have a high multiplier<br>and linkage effect on any nation’s quest for socio economic and industrial<br>development.</p><p>The growth of the agricultural sector in Nigeria was not<br>smooth. </p><p>Anyanwu (1967) held that during the colonial period<br>between 1861 – 1960, attention was given to agricultural research and extension<br>services. Among the activities that was<br>done, the first was the establishment of a research station in Lagos by Sir Claude McDonald in 1893. Landmarks of 10.4 km was acquired by the<br>British Cotton Growing Association (BCGA) in 1899 for experimental purposes<br>strictly for cotton and was named Moor Plantation in Ibadan.</p><p>In 1912, the Department of Agriculture was established in<br>each of the then Southern and Northern Nigeria,<br>but the activities of the department were virtually suspended between 1912 and<br>1921 as a result of the First World War and its aftermath. The period 1929 and 1945 was a difficult one<br>for the agricultural sector of Nigeria. This was the period of great depression when<br>the world prices on commodities fluctuated. <br>This affected the agricultural sector negatively because the volume of<br>agricultural produce increased but the value did not increase proportionately.</p><p>The period 1945 – 1954 marked the period of export boom,<br>because countries were just recovering from the Second World War and countries<br>that needed to develop their destroyed industrial sector were many. They depended on primary product for the<br>beginning stage of industrialization. <br>They needed to revitalize their industrial sector by demanding primary<br>goods. Prices of primary products rose<br>higher again because there were speculations that there would be a Third World<br>War due to the outbreak of the Korean War. <br>However, after this period, there came another period of price<br>instability. This made the reliance on<br>agriculture and its products to fall, leading to the establishment of a market<br>board. This board bought these products<br>from the local farmers and sold them overseas.</p><p>In spite of all the periods, Nigeria made a great revenue from<br>agriculture. In the pre-Independence<br>era, the agricultural sector contributed most to the GDP of Nigeria. Helleiner (1966) said that in 1929, export<br>production amounted to 57% of Nigeria’s<br>revenue and in that 57%, agriculture made up about 80% of the export. On attainment of political independence in<br>1960, the trend was still very much the same, the Nigerian economy could<br>reasonably be described as an agricultural economy, because agriculture served<br>as the engine of growth of the overall economy (Ogen, 2003: 231-234), from the<br>stand point of occupational distribution and contribution to the GDP. Nigeria was the world’s second<br>largest producer of cocoa, largest exporter of palm oil. Nigeria was also a leading exporter<br>of other major commodities such as cotton, groundnut, rubber and hides and<br>skins (Alkali, 1997: 15-16). Between<br>1964 – 1965, agriculture accounted for 55% of GDP and employed 70% of the adult<br>workforce (Matton, 1981). In 1970,<br>agricultural export crops like cocoa, groundnut, cotton, rubber, palm oil, palm<br>kernel, etc. accounted for an average of between 65% – 75% of Nigeria foreign<br>exchange earnings and provided the most important source of revenue for the<br>Federal as well as State governments through export products and sale taxes<br>(Ekundare 1973), despite the reliance of Nigerian peasant farmers on<br>traditional tools and indigenous faming methods, these farmers produced 70% of<br>Nigeria’s exports and 95% of its food needs (Lawal, 1997: 195).</p><p>However, the 1967 – 1970 Civil War in Nigeria<br>coincided with the ‘Oil Boom’ era, which resulted in extensive exploration and<br>export of petroleum and its products. <br>This led Nigeria<br>to neglect its strong agriculture in favour of an unhealthy dependence on oil<br>(United States Department of State, 2005). <br>Ever since then, Nigeria<br>has been witnessing extreme poverty and insufficiency of basic food items. The agricultural sector contributions now<br>account for less than 5% of Nigeria’s<br>GDP (Olagbaju and Fashola, 1996: 263). <br>It is against this back drop that we set out to research on the impact<br>of agricultural development on Nigeria<br>economic growth.</p><p>As noted earlier, the neglect of the agricultural sector<br>and the dependence of Nigeria<br>on a mono-cultural crude oil based economy had not augured well for the<br>well-being of the Nigerian economy. In a<br>bid to address this drift, the Nigerian government as from 1975 became directly<br>involved in the commercial production of food and cash crops. </p><p>Several large scale agricultural projects specializing in<br>the production of grains, livestock, dairies and animal feeds, to mention but a<br>few, were established (Fasipe, 1990: 129-130). <br>Sugar factories were also established at Numan, Lafiagi and sunti<br>(Lawal, 1997: 196).</p><p>The Nigerian Agricultural and Co-operative Bank (NACB)<br>was established in 1973 as part of government’s effort to invest oil wealth<br>into the agricultural sector through the provision of credit facilities to<br>support agriculture and agro-allied businesses (Olagunju, 2000: 90). By 1995 the bank had granted the sum of<br>$3,179.6 million as loan to the Private Sector.</p><p>– &nbsp; &nbsp; &nbsp; &nbsp;<br>The River Basin<br>Development Authorities (RBDA) were conceived in 1963 and were to cater for the<br>development of land and mineral resources potentials of Nigeria.</p><p>– &nbsp; &nbsp; &nbsp; &nbsp;<br>Operation Feed The<br>Nation (OFN) was commissioned in the 1970s with the main objectives of:</p><p>1) &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>Mobilizing the nation<br>towards self sufficiency and self reliance in food.</p><p>2) &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>Encouraging the<br>sector of population which relies on buying food to growing its own food.</p><p>3) &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>Encouraging general<br>pride in agriculture through the realization that a nation which cannot feed<br>itself, cannot be proud etc.</p><p>The OFN which was launched in 1976 to generate public<br>awareness of the importance of agriculture to national development, and<br>mobilize both rural and urban dwellers to participate in agriculture, be it in<br>conventional crop farms, fish farms, backyard gardens or poultry did not<br>realize the objectives of reducing or eliminating food imports and achieving<br>self-sufficiency so in 1980 it was replaced with the Green Revolution<br>Programme.</p><p>– The Green<br>Revolution; This was a more deliberate and calculated approach to the food<br>production problem. The programme was<br>followed by the mounting of food strategies mission for Nigeria by the<br>Federal Ministry of Agriculture, which estimated the level of food production<br>needed to achieve self-sufficiency. Much<br>of the recommendations of the programme, such as the expansion of the<br>Integrated Agricultural Development Programme (ADP) to cover all States of the<br>Federation, support for artisanal fishers and aquaculture and the establishment<br>of grain storage facilities, among others, are still being implemented.</p><p>– &nbsp; The Directorate<br>of Food, Roads And Rural Infrastructure (DFRI): <br>This was established by the Federal Military Government in 1986 and was<br>intended to bring development to the rural areas where over 70% of the<br>population reside and work principally as farmers. The mandate given to DFRI is as follows:</p><p>1) &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>To improve the<br>quality of life and standard of living of the people in the rural areas.</p><p>2) &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>To use the enormous<br>resources of the rural areas to lay a solid foundation for the security,<br>socio-economic growth and development activities of the rural areas to those of<br>the Local Government Areas; the States and the Federal Government.</p><p>3) &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>To ensure a deeply<br>rooted and self-sustaining development process based on effectively mobilized<br>mass participation.</p><p>In spite of all these efforts, it is heartrending to note<br>that as from the mid 70s, Nigeria<br>became a net importer of various agricultural products. In 1982 alone, Nigeria imported 153,000mt tons of<br>palm oil at the cost of 92 million USD and 55,000mt tons of cotton valued at 92<br>million USD (Alkali, 1997:10). Between<br>1973 and 1980, a total of 7.07million tons of wheat, 1.62 million tons of rice<br>and 431,000 tons of maize were imported. </p><p>Thus from N47.8<br>million in the 60s, the cost of food imports in Nigeria rose to N88.2 million in 1970 and N1,027.0 million in 1988 (Alkali,<br>1997:19-21). Since the 1990s till the<br>ban of rice importation, Nigeria<br>has been spending an average of 60 million USD on the importation of rice<br>annually. In 1994, the agricultural<br>sector performed below the projected 7.2 per cent of budgetary output. (Lawal, 1997:197-198).</p><p>Beginning from year 2000, Nigeria import expenditure on both<br>food and live animals rose to N113,489.8<br>million in the year 2000 from N103,489.8<br>in 1999. The cost of importation<br>continued in its upward trend, in 2002 it was N144,297.6,<br>N201,648.3 in 2003, then N178,747.4 in 2004, N193,259.1 in 2005 and N235,440.0,<br>N271,679.7 and N355,287.0 from 2006 to 2008 respectively. (National Bureau of<br>Statistics, and CBN Statistical Bulletin Golden Jubilee Edition, 2008).</p><p>Between 1995 and 1998, the Government further embarked on<br>the reformation of lending policies of the Agricultural Credit Guarantee Scheme<br>(ACGS) for easier access to agricultural credit. It also established the Calabar Export<br>Processing Zone (EPZ) and initiated the Enugu,<br>Kaduna, Jos and<br>Lagos EPZs with each specializing in specified food and export crops.</p><p>In fact, the National Rolling Plan for 1996 – 1998<br>assumed that by the year 2000, Nigeria would have been able to feed its<br>population, develop the capacity to process agricultural raw materials both for<br>local industries and for export and significantly increase the contributions of<br>the agricultural sector to the GDP (Lawal, 1997:193). These objectives have turned out to be a<br>mirage mainly because of official corruption.</p><p>In order to get out of this, the Nigerian Government need<br>to actively promote the establishment of the kind of agro-based industries that<br>are capable of processing Nigeria’s agricultural raw materials in a most<br>efficient manner. Thus the emphasis<br>should be on the local processing of raw crops for local industries as well as<br>for exports. This will create more<br>employment opportunities and additional income will be generated. The provision of agricultural subsidies for<br>fertilizer, farm implements and equipment would also boost agricultural<br>production. In addition, there is the<br>need to protect the agricultural sector from foreign imports and<br>competition. It is also necessary to<br>provide replanting grants to cash crops farmers so that they can replace their<br>old trees with newer varieties.</p><p>It has been observed that in spite of the fact that these<br>newer varieties are higher yielding and relatively easy to maintain with a<br>shorter maturation period, most farmers are reluctant to do away with their<br>old, plantations because of the high cost of replanting new ones. (Ogen,<br>2004:135). It is equally important to<br>provide special welfare schemes for farmers that will form part of a social<br>policy to alleviate rural poverty and the redistribution of income in favour of<br>the rural poor. Government should also<br>strive to promote greater efficiency in the rural areas by extending equal<br>social benefits, establishing national schemes for agrarian reforms and<br>improving the quality of life in areas that are quite remote so as to alter the<br>movement of people from rural communities to urban areas. Furthermore, the resuscitation and<br>development of the critically ailing Nigeria Sugar Industry and its<br>bye-products, especially ethyl alcohol (ethanol) which comes from molasses (a<br>bye-product of sugar cane) is of an urgent and critical necessity. Given the intractable and embarrassing<br>problem of fuel queues in Nigeria,<br>ethanol could be used to produce a brand of automobile fuel known as alcogas or<br>green petrol. Apart from being a<br>renewable source of energy, and unlike fossil fuels, alcogas has little or no<br>adverse effect on the environment.</p><p><b>1.2 &nbsp; &nbsp; &nbsp; </b><b>STATEMENT OF PROBLEM</b></p><p><b></b></p><b><p>The agricultural sector has suffered from years of poor<br>management, inconsistent and poorly implemented government policies, government<br>neglect and lack of basic infrastructure. <br>Presently, it accounts for 40.6% of GDP and 65% of employment in the<br>economy, (A.B. Sekumade, 2009, United States Department of State, 2005). Nigeria is no longer a major<br>exporter of cocoa, groundnut, rubber and palm products. Cocoa production mostly from obsolete<br>varieties and over-aged trees is stagnant at around 150,000 tonnes annually, 25<br>years ago, cocoa production was 300,000 tonnes. <br>There has been a similar decline in groundnut, palm oil and the other<br>major export crops (United States Department of State, 2005). The decline in agricultural production was<br>largely due to the rise of oil shipments (A.B. Sekumade, 2009).</p><p>Because of this backdrop, agriculture has not kept up<br>with the rapid population growth and Nigeria once a large net exporter<br>of food now imports most of its food requirements.</p><p>Dependence on oil is not the only cause of the<br>under-development of the Nigerian agricultural sector, but also:</p><p>Falusi and Olayiole (1980) observed that Nigerian<br>agriculture is characterized by illiterate farmers who live in rural areas<br>producing over 90% of the total food consumed and other agricultural products<br>and with regards to their educational status give little or no room for improvement through scientific<br>research. Olayemi (1985) noted that more<br>than 90% of the consumed food in Nigeria is provided by the<br>small-scale farmers.</p><p>– &nbsp; &nbsp; Again, the<br>bulk of agricultural activities are done using crude implements which are<br>relatively less efficient when compared with modern machineries such as<br>tractors, ploughs etc.</p><p>– &nbsp; &nbsp; Another<br>problem is the issue of finance. The<br>agricultural sector is poorly financed. <br>They do not get credit easily from financial institutions, like<br>commercial banks. The agriculturists<br>find it difficult to finance projects which are capital intensive. The commercial banks cannot grant loans<br>easily to a small scale farmer because of low produce and low profit which<br>result to a failure in paying back the loan.</p><p>– &nbsp; &nbsp; &nbsp; The lack of<br>storage facilities have led to much wastage and high cost of storage. This hinders the availability of some<br>perishable agricultural produce through the year, thereby hindering<br>agricultural development.</p><p>– &nbsp; &nbsp; Dependence<br>on weather is another problem that affects the increase in agricultural<br>produce. Agriculturists still depend on<br>rainfall to produce instead of the use of irrigation that supply water all<br>through the year.</p><p>With all that has been said above, it is obvious that the<br>agricultural sector, being one of the real sectors of the Nigerian economy, has<br>got a lot to contribute to its economic growth. <br>But these are not attainable because of the multifarious problems<br>besieging this sector of the economy.</p><p>This work therefore is geared towards answering the<br>patent question:</p><p>What impact has the agricultural sector made in the face<br>of the dire need for food security, employment creation and in all increased<br>economic growth of Nigeria?</p><p>1.3 &nbsp; OBJECTIVES<br>OF THE STUDY</p><p>The broad objective of this study is to determine the<br>extent to which agricultural development influences economic growth in Nigeria.</p><p>1) &nbsp; To determine<br>the cause of decline in agricultural production today.</p><p><b>1.4 &nbsp; &nbsp; STATEMENT<br>OF HYPOTHESIS</b></p><p><b></b></p><b><p>For the purpose of this study, the following hypothesis<br>is tested;</p><p>Ho – Agricultural development has no significant impact<br>on economic growth in Nigeria.</p><p><b>1.5 &nbsp; &nbsp; &nbsp; </b><b>SIGNIFICANCE OF THE STUDY</b></p><p><b></b></p><b><p>The<br>significance of this work lies on the fact that with improved agriculture, the<br>Nigerian economy stands to gain in its efforts towards development. This study attempts to answer the question;<br>what is the relevance of agriculture in economic growth, the cause of<br>agricultural decline and how the present state of our agricultural productivity<br>will be improved. </p><p>This<br>will form the basis upon which suggestions will be made as to how the full<br>potentials of agriculture can be harnessed.</p><p><b>&nbsp;</b></p><p><b></b></p><b><p><b>&nbsp;</b></p><p><b></b></p><b><p><b>&nbsp;</b></p><p><b></b></p><b><p><b>This work stands to benefit:</b></p><p><b></b></p><b><p>– &nbsp; Nigeria as a whole. The research intends to bring forth ways to<br>increase agricultural output both for the purposes of consumption and<br>exportation which ultimately will bring an increased favourable Balance of<br>Payment for the nation.</p><p>– &nbsp; The research will be beneficial to schools<br>(teachers and students) and will help them understand the importance of farming<br>no matter how small the scale of production.</p><p><b>1.6 &nbsp; SCOPE AND<br>LIMITATIONS</b></p><p><b></b></p><b><p>This study focuses on Nigeria and on the impact of<br>agricultural development on the economic growth and development of Nigeria from<br>1960-2017.</p><p>The originality and reliability of any study or research<br>work is based on the quantity and quality of available data. Though it is the duty and intention of any<br>researcher to bring out and show everything the study is to have, but there are<br>constraints which include, time, finance, difficulty in getting data, etc.</p></b></b></b></b></b></b></b></b></b></b></b> <br><p></p>