Role Of Agriculture In The Economic Development

1.0   Background to the Study

The economy of the developed nations has agriculture as the basis for growth and development. Most developing countries have agriculture as their primary (traditional) pursuit and it’s the gateway to sustained growth of the economies. Nigeria is greatly endowed with potentials, resources and the wherewithal to provide the basic needs of the citizens. Before discovering oil in commercial quantities, the economic system of Nigeria was agro-based with the sector accounting for about two third of the Gross domestic product (GDP) and during pre independence, it had been the main stay of the nation.

According to (Amaza and Udoh, 2000), “agriculture is the main stay of households in Nigeria and is a significant sector in Nigeria’s economy. This explains that a strong agricultural sector has a multiplier effect on any nation’s socio-economic and industrial fabric due to its multi-dimensional nature. Until the 1970s the sector provided the basic food of the population, was a major earner of foreign exchange for Nigeria and supplied raw materials required by manufacturing sector to provide adequate employment. The agriculture sector still remains the principal supplier of raw materials for industries. Effort have been geared towards accelerating economic development with the ultimate goal of transforming the economy into an industrialized one, raising the welfare of the population with agriculture acting as the catalyst for the realization of the goals. The traditional role of agriculture in economic development provides the foundation for this position (Obiechina, 2007).

 Agriculture also called farming include the cultivation of animals, plants, fungi and other forms of food biofuel, fibre, drugs and other products, used to sustain and enhance human life. In most developing countries, agriculture is the springboard for economic development and a sustained growth of the modern economy. It can be stated here that economic growth goes hand-in-hand with a flourishing agricultural sector, as well a dwindling agricultural sector is the principal factor for poor economic performance of developing countries particularly Nigeria. Abayomi (1997) stated that rising agricultural productivity has been the main concomitant of successful industrialization and among the roles conventionally ascribed to agricultural sector constitutes the major source of employment.

Agriculture is a pertinent sector for reducing poverty and sustaining growth of developing countries. In terms of contribution to Gross Domestic Product, the food and agricultural sector dominates developing nations including Nigeria especially among the rural dwellers. This contribution also includes employment and income, its growth and development are necessary for the overall process of socioeconomic development of Nigeria.

The fundamental roles ascribed to agriculture for development has long been discovered/recognized. It is a major source of contributions that help induce industrial growth and structural development of an economy. Agriculture’s multiple functions for development follows triggering economic growth, reducing poverty, narrowing income disparities, providing food security and delivery of environmental services.

Classical theorists viewed economic development as a growth process of relocating factors of production from an agricultural sector characterized by low productivity and the use of traditional/crude technology to a modern industrial sector characterized by high productivity.

In the early stages of development, large share of manufacturing is agriculturally connected. As much, rising income of household in rural areas is vital to provide market for manufactures and services domestically produced. Moreso, technological change and output growth in agriculture were linked to closed economy model that in turn held down urban wage costs and stimulated competitive exports of industrial products (Hsieh and Sadoulet, 2007). This ideology falls under the structural transformation paradigm. There is however an argument for a broader role of agriculture for development.

In 2000, 191 United Nations members agreed on the central role for meeting the environmental agenda and this was enshrined in the eight millennium development goals. Agriculture is considered as the major user and abuser of natural resources. Agriculture relates to the MDGs and “particularly central to the three of them – poverty reduction and hunger, fostering gender equality and sustainable management of environment”. Moreover, agricultural growth remains critical to achieving these goals.

Based upon its substantial base to build upon in view of its abundant natural resources, including 98.3 million hectares of which 74 million hectare is good for farming even though a half is utilized (Omotor, 2009). In view of its climate and agro ecological conditions, Nigeria has potential for producing a wide variety of crops through mechanized farming. Climatic characteristic of the nation from the tropical areas of the coast to the arid zone of the north makes it possible to produce varieties of products that can be grown in the tropical and semi tropical areas of the world. The varieties include sorghum, yam, tuber, cocoa, palm fruit et ceter

Agriculture suffers from low productivity reflecting reliance on antiquated methods. The economic importance of agriculture covers employment generation of which is a major labour employer, it holds the ace for reducing unemployment. Unemployment is among the threatening problems facing Nigeria.

Records have it that the technological strides of the more developed economies had their root in agriculture. Early development theorists argue that agriculture can offer the much needed output of food and propagate industrialization. The argument/debate is anchored on the raw materials needed by the industries along with the labour that will be absorbed by industries.

The Nigerian economy was positive in 2003. Annual GDP grew by 9.1 percent (NBS, 2007) between 2003 and 2005, 6.1 percent from 2006-2008. The growth can be attributed to the non oil sector, primarily agriculture which has grown rapidly accounting for about 35 percent to total GDP.

Effort to restore the sector has yielded less than optimal result. Potential of the sector is large, considering the capacity of the sector to provide the sustenance for the population through increased output and employment to better the welfare of citizens, providing foreign exchange, stimulating investment and industrialization. Because of poor technology, output and income are low. Consequently, agriculture is caught in a low level equilibrium trap where the rate of return cannot rise among other things in view of the method of operation/practice (Titus, 1996). Developing the sector is crucial to economic development. With soaring poverty, unemployment, importation of basic tools needs agriculture holds, potential for bringing about general development of national economy, therefore, the researcher has embarked upon this study to evaluate the role of the Nigeria’s agriculture in development.

According to Jerzy W. (2013), agriculture is that kind of activity which joins labour, land or soil, live animals, plants, solar energy and so on; the Minister of Agriculture is the Minister of the beginning of life. So people who are involved with that kind of activity are  involved  in  something special. In recognition of this prominent role the Minister of Agriculture and Federal Government of Nigeria has taken a giant stride to treat agriculture as serious political, economic and investment issue in Nigeria.

Majority of people in Nigeria live and work in rural area. Almost 75% are rurally  based  compared to less than 25% in urban area. Similarly, over 58% of the labour force engaged in agriculture. In Nigeria the sector contributes about 55% of gainful employment and almost 40 % of the share of GDP,  before the discovery of oil, this figures is as high as between 75 – 80% of  the GDP. Nevertheless, this current figure for the GDP share of agriculture sector is quite high when we compared it with the average of 27% for low income nations in Sub-Sahara Africa  (WDI, 2010).