The impact of agricultural development on nigeria economic growth (1980-2010)

Thesis Overview

<p> </p><p>INTRODUCTION</p><p>1.1 Background of the Study</p><p>Agriculture is the foundation and bedrock upon which the development<br>of stable human community has depended on throughout the whole universe<br>such as rural and urban communities. It is concerned with the husbandry<br>of crops and animals for food and other purpose. The study of the<br>history of economics provides us with ample evidence that can<br>agricultural revolution is a fundamental pre-condition for economic<br>development. The agricultural sector has the potentials to be the<br>industrial and economic springboard from which a country’s development<br>can take off. Indeed, more often than not, agricultural activities are<br>usually concentrated in the less developed rural areas where there is a<br>need for rural transformation, redistribution, poverty alleviation and<br>socio-economic development.</p><p>The agricultural sector has the potentials to shape the landscape,<br>provide environmental benefits such as conservation, guarantee<br>sustainable management of renewable natural resources, preserve<br>biodiversity and contribute to the viability of rural areas development.<br>Through its spheres of activities at both the macro and micro levels,<br>the agricultural sector is strategically positioned to have a high<br>multiplies and linkage effect on any nation’s quest for socio-economic<br>and industrial development. The growth of the agricultural sector in<br>Nigeria was not smooth. Anyanwu (1967) held that during the colonial<br>period between 1861 to 1960, attention was given to agricultural<br>research and extension services. Among the activities that were done was<br>the establishment of a research station in Lagos by Sir Claude<br>Mc.Donald in 1893: Landmark of 10.4 km was acquired by the British<br>Cotton Growing Association (BCGA) in 1899 for experimental purpose<br>strictly for cotton and was named “Moor Plantation” in Ibadan. In 1912,<br>the Department of Agriculture was established in each of the then<br>southern and Northern Nigeria, but the activities of the department were<br>virtually suspended between 1912 and 1921 as a result of the First<br>World War and its aftermath. The period between 1929 and 1945 was a<br>difficult one for the agricultural sector of Nigeria. This was the<br>period of great depression when the world princes on commodities<br>fluctuated. This affected the agricultural sector negatively because the<br>volume of agricultural product increased but the value did not increase<br>proportionally.<br>The period 1945 to 1945 marked the period of expert boom, because<br>counties were just recovering from the Second World War and these<br>countries needed to develop. They depended on primary production for the<br>beginning stage of industrialization. They needed to revitalize their<br>industrial sector by demanding primary goods. Prices of primary products<br>rose higher again because there were speculations that there would be a<br>third world war due to the outbreak of the Korean War. However, after<br>this period, there came another period of price instability. This made<br>the reliance on agriculture and its products to fall, leading to the<br>establishment of a market board. This board bought these products from<br>the local farmers and sold them overseas.<br>In spite of all the period, Nigeria made great revenue from agriculture.<br>In the pre-independence era, the agricultural sector contributed most<br>to the GDP of Nigeria. Helleiner (1966) said that in 1929, export<br>production amounted to 57% of Nigeria’s revenue of which agriculture<br>contributed about 80% of the export. On attainment of political<br>independence in 1960, the trend was still very much the same, the<br>Nigeria economy could reasonably be described as an agricultural<br>economy, because agriculture served as the engine of growth of the<br>overall economy (Ogen 2003). According to Alkali (1997) Nigeria was the<br>world’s second largest producer of cocoa, largest exporter of palm oil<br>during the period. And was also a leading exporter of other major<br>commodities such as cotton, groundnut, rubber and hides and skins.<br>Between 1964 and 1965, agricultural output accounted for 55% of GDP and<br>employed 70% of the adult workforce (Matton, 1981). In 1970,<br>agricultural export crops like cocoa, groundnut, cotton, rubber, palm<br>oil, palm kernel, etc. accounted for an average of between 65% and 75%<br>of Nigerian foreign exchange earnings and provided the most important<br>source of revenue for the federal as well as state government through<br>expert products and sale taxes (Ekund are 1973). Despite the reliance of<br>Nigerian peasant farmers on traditional tools and indigenous farming<br>methods, these farmers produced 705 of Nigerian’s exports and 95% of its<br>food needs (Lawal, 1997).<br>However, the 1967 to 1970 civil war in Nigeria coincided with the oil<br>boom era, which resulted in extensive exploration and exportation of<br>petroleum and its strong agriculture in favour of an unhealthy<br>dependence on oil (United States Department of state, 2005). Ever since<br>then, Nigeria has been witnessing extreme poverty and insufficiency of<br>basic food items. The agricultural sector contributions now accounts for<br>less then 5% of Nigeria’s GDP (Olagbaju and Fashola, 1996). It is<br>against this backdrop that we set out to research on the impact of<br>agricultural development on Nigeria economic growth. As noted earlier,<br>the neglect of the agricultural sector and the dependence of Nigeria on a<br>mono-cultural crude oil based economy had not augured well for the<br>well-being of the Nigerian economy. It becomes therefore imperative to<br>study the impact of agricultural development on the Nigeria economic<br>growth. 1.2 Statement of Problem The agricultural sector has suffered<br>from years of poor management, inconsistent and poorly implemented<br>government policies, government neglect and lack of basic<br>infrastructure. Agriculture accounted for 30% of the GDP in 2010 (World<br>Factbook, January 9, 2012).<br>Nigeria is no longer a major exporter of cocoa, groundnut, rubber and palm products. Coca production<br>mostly from obsolete varieties and over-aged trees are stagnant at<br>around 150,000 tones annually. There is also a decline in groundnut,<br>palm oil and other major export crops (United States Department of<br>State, 2005). The decline in agricultural production was largely due to<br>the rise of oil shipments (A.B Sekumade 2009). Because of this backdrop,<br>agriculture has not kept up with the rapid population growth and<br>Nigeria once a large net exporter of for now imports most of its food<br>requirements. Dependence on oil is not only the cause of the<br>under-development of the Nigerian agricultural sector, but also:<br>1. The Nigerian agriculture is characterized and surrounded by bunch of<br>illiterate farmers who live in rural areas, producing over 90% of the<br>total food consumed and other agricultural products and with regards to<br>their educational status giving little or no room for improvement<br>through scientific research.<br>And also more than 90% of the consumed food in Nigeria is provided by the small-scale farmers.</p><p>2. The Nigerian agriculture lacks storage facilities and these have<br>led to so much wastage and high cost of storage. This hinders the<br>availability of source perishable agricultural produce through the year,<br>therefore hindering agricultural development.</p><p>3. Another negative force is Dependence on weather which affects the<br>increase in agricultural produce. Nigeria Agriculturists or farmers<br>still depend on rainfall only to produce instead of the use of<br>irrigation that supplies water all through the year.<br>4. The problem of finance: The agricultural sector is poorly financed in<br>Nigeria. They do not get credit easily from financial institutions,<br>like commercial banks. The agriculturists find it difficult to finance<br>projects which are capital intensive. The commercial banks cannot grant<br>loans easily to a small scale<br>farmer because of low produce and low profit which results to a failure in paying back the loan.</p><p>5. In addition, the dependence on imported foods has disincentive<br>investment in local farming. Also, soil infertility is one of the<br>problems of agriculture in Nigerian. Most of the farmable land in<br>Nigeria contains soil that is how to medium in productivity. According<br>to the food and Agricultural Organization of the United Nations (FAO),<br>with proper management, the soil can achieve medium to good<br>productivity. The movies problem that affects soil fertility is soil<br>erosion. Wind erosion, strong winds expose seeding lings and crops root<br>system by blowing away loose, fine grain soil particles in drifts, which<br>can cover crops.<br>Another type of erosion that affect soil fertility is water erosion.<br>There are two types of water erosion: Splash erosion and rill erosion.<br>Splash erosion occurs when rain drops impact the soil and rill erosion<br>occurs when channels of water carry soil downstream. This (water<br>erosion) is reduced when the soil is covered with a canopy. 6. Food<br>processing problem is estimated that about 20 to 40% of the yearly<br>harvest is lost during processing. The primary cause is the lack of<br>efficient harvesting techniques. According to and with the information<br>above, it is quite clear that the agricultural sector, as one of the<br>Nigeria economy has really got a lot to contribute to the economic<br>growth of the country. This research work therefore is aimed at<br>answering the following questions:</p><p>(i) What is the effect of agricultural output on economic growth?</p><p>(ii) What is the effect of agricultural sector on employment creation?</p><p>1.3 Objectives of the Study</p><p>The broad objective of this study is to determine the impact of agricultural development on economic growth in Nigeria.</p><p>1. To determine the impact of agricultural sector on the economic growth in Nigeria.</p><p>2. To determine the effect of agricultural sector on employment creation in Nigeria</p><p>1.4 Statement of Hypothesis For the purpose of this study, the following hypothesis is tested;</p><p>1. H0; Agricultural development has no significant impact on economic growth in Nigeria.</p><p>2. H0; Agricultural development has no significant effect on employment creation in Nigeria.</p><p>1.5 Significance of the Study<br>The significance of this study depends on the fact that with improved<br>economy Nigeria stands to gain in its effects toward development. This<br>work attempts to answer the question: What is the relevance of<br>agriculture in economic growth? The cause of agricultural backwardness<br>and how the present state of our agricultural productivity will be<br>improved. This will form the basis upon which suggestions and<br>contributions will be made as to how the full potentials of agriculture<br>can be harnessed. This work stands to benefit:</p><p>i. Nigeria as a whole: The research work intends to bring firth ways<br>to increase agricultural output both for the purpose of consumption and<br>exportation which ultimately will bring an increased favorable balance<br>of payment (BOP) for the nation.</p><p>ii. This work will be advantageous to schools (staffs and students)<br>and will help them understand the importance of farming no matter how<br>small the scale of production may be.<br>1.5 Scope and Limitations</p><p>This research work focuses on the impact of agricultural development<br>on the economic growth of Nigeria between the period of 1980 to 2010.<br>There are some factors or constraints which hinder my achieving the<br>whole intension of this work, these constraints are; time factor, poor<br>finance, environmental constraints like free movement to research<br>outside the school premises etc.</p> <br><p></p>