The Impact Of Agricultural Production On Economic Growth Of Nigeria

1.1 Background of the Study

Agriculture began independently in different parts of the globe, and included a diverse range of taxa. At least 11 separate regions of the Old and New World were involved as independent centers of origin. Wild grains were collected and eaten from at least 105,000 years ago. Pigs were domesticated in Mesopotamia around 15,000 years ago. Rice was domesticated in China between 13,500 and 8,200 years ago, followed by mung, soy and azuki beans. Sheep were domesticated in Mesopotamia between 13,000 and 11,000 years ago. From around 11,500 years ago, the eight Neolithic founder crops, emmer and einkorn wheat, hulled barley, peas, lentils, bitter vetch, chick peas and flax were cultivated in the Levant. Cattle were domesticated from the wild aurochs in the areas of modern Turkey and Pakistan some 10,500 years ago. In the Andes of South America, the potato was domesticated between 10,000 and 7,000 years ago, along with beans, coca, llamas, alpacas, and guinea pigs. Sugarcane and some root vegetables were domesticated in New Guinea around 9,000 years ago. Sorghum was domesticated in the Sahel region of Africa by 7,000 years ago. Cotton was domesticated in Peru by 5,600 years ago, and was independently domesticated in Eurasia at an unknown time. In Mesoamerica, wild teosinte was domesticated to maize by 6,000 years ago.

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. Agricultural sector plays a vital role in the economy development of Nigeria. The agricultural sector contributes significantly to the gross domestic product (GDP) and employed about 86 per cent of the rural households in the country (CBN, 2010; Fan et al, 2008 and Akpan, 2012). It is increasingly obvious that improvement in the agricultural development and growth can offer a pathway from rural poverty, but evidence-based macroeconomic policies and instruments are prerequisite. The country’s agricultural policies and programmes over the years have been inconsistent, poorly implemented and mostly emerged as ad hoc attempts. Such agricultural policies have stunted the realization of the sector’s full potentials.  

A paradigm shift towards a sound evidence-based policies anchored on sound macroeconomic policies is needed to promote a more equitable and environmental sustainable growth in the agricultural sector. According to the Central Bank of Nigeria (2006), the agricultural sector accounted for about 41.8 per cent of the overall growth of the economy in 2006 followed by the non-oil industry (26.1 per cent), while crude oil only accounted for 21.9 per cent. But until very recently, the sector had not performed as well as it should have, because of several decades of neglect mostly accredited to the misalignment of economic policies in the country. From 1970 to 2000, the sector’s productivity grew at 1.7 per cent per annum, very low when compared with the country’s population growth rate of about 2.7 per cent per annum (CBN, 2010). This is one of the key reasons why the country still has one of the highest poverty rates in the world. Agricultural growth began to accelerate after 2000, and since 2003, the annual growth rate has been above the 6 per-cent mark, a target set under the National Empowerment and Economic Development Strategy (NEEDS) which is a poverty reduction programme founded in 2004. Agricultural policies under NEEDS were basically designed to allow certain level of protection to domestic investors. Concretely, the policies were translated into tariff escalation and lower import duties on raw materials and relatively high import duties on finished goods which compete with local production. Duty exemptions and concessions were some of the quantitative policy instrument adopted in favour of domestic producers. Despite the macroeconomic incentives to the agricultural sector, the agricultural GDP witnessed a negative growth rate of about 28.21% between 2004 and 2005.  

However, following the marginal increase in the agricultural output in recent years, many economic analysts have attributed the growth to the expansion in cultivated land which has implication on the sustainability and environment deterioration in the long run (Akinbile and Adekunle, 2000, Okiki et al.,2001, Raufus, 2010 and Udoh et al.,2011). In addition, this growth has not been able to trickle down to the poorest of the poor, and has not helped tackle the problem of unemployment and underemployment of the rural youth (Fan et al., 2008 and Akpan, 2010). 

To this effect, this study seeks to explain further and identify some of the factors that hinder agricultural productivity in Nigeria. Also building on earlier research projects and study, this study sets to deepen our understanding and expose us to more facts in terms of benefit and economic advantage of sector development

1.2 Statement of the Problem

There is a range of ecological belts which enable the country to produce a wide variety of agricultural commodities such as cereals, legumes, roots, tubers, fruits, vegetables, tree crops, forestry and shrubs, livestock and fish.  But over the years, Nigeria’s population has astronomically increased and the demands of industrial raw materials have also increased. This has put a lot of pressure on the produced commodities resulting in importation of some of the commodities (e.g. rice, wheat, poultry, and fish) as well as raw materials for industries. The Nigerian agricultural production system has, however, not kept pace with trends in technology development. In order to develop the sector, government over the years has executed different agricultural policies, yet the sector is currently dominated by peasant farmers using little or no technologies. This has resulted in the continuous failure of the sector to play its role in national development.  Currently, Nigeria spends scarce foreign exchange importing food products such as rice, meat, fish and milk. A larger amount of money is spent importing intermediate (semi processed) agro raw materials for agro based industries such as breweries, beverages, flour, sugar, fruit juice, etc. these have been done to bridge the ever-increasing gap between supply and demand which has not been met by local production, processing and distribution system. The federal government is currently promoting the value chain approach as a viable alternative that can drive agricultural development in Nigeria to a level where we can be self-sufficient in food, fibre and agro raw materials production. 

These and other related issues are the main problems that motivate the researcher to embark on this study. Hence, this study looks into the impact of agricultural production on economic growth in Nigeria.

1.3 Objectives of the Study

The main objective of this study is to examine the impact of agricultural production on economic growth in Nigeria. 

Specific objectives include;

i. To examine the extent of progressive impact of agricultural production to the state of economic growth of Nigeria

ii. To examine the barriers to the agricultural production for the economic growth in Nigeria.

iii. To identify the levels of intervention by government to improve the GDP by the growth of agricultural production.  

1.4 Research Questions

i. What is the extent of progressive impact of agricultural production to the state of economic growth of Nigeria?

ii. What are the barriers to the agricultural production for the economic growth in Nigeria?

iii. What are the levels of intervention by government to improve the GDP by the growth of agricultural production?

1.5 Research Hypotheses

H0: There is no significant to the extent of progressive impact of agricultural production to the state of economic growth of Nigeria

H1: There are no levels of intervention by government to improve the GDP by the growth of agricultural production

1.6 Significance of the Study

At the completion of this research work, it is of great importance to note that various communities, towns, states in Nigeria will find the result of this research work to be beneficial to great and marvellous extent, as this research work would play an essential roles in the task of educational standard, growth and development of the state and also will established the existing gaps between agricultural productivity and Nigeria economic growth. 

Policy maker will benefit from this research to know more about increasing in agricultural productivity in Nigeria economy growth. It will also assist in providing the frame work of where work has been done by earlier researchers. It will also provide a framework on which further research in agricultural development and economic growth could be carried out. 

1.7 Scope of the Study

This study is on the impact of agricultural production on economic growth of Nigeria. The study is carried out in the Lagos metropolis only. The study will make use of both primary and secondary data. Questionnaires will be distributed and used for presentation and analysis.

1.8 Limitations of the study

The demanding schedule of respondents at work made it very difficult getting the respondents to participate in the survey. As a result, retrieving copies of questionnaire in timely fashion is very challenging. Also, the researcher is a student and therefore has limited time as well as resources in covering extensive literature available in conducting this research. Information provided by the researcher may not hold true for all institutions but is restricted to the selected organization used as a study in this research especially in the locality where this study is being conducted. 

Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

Finally, the researcher is restricted only to the evidence provided by the participants in the research and therefore cannot determine the reliability and accuracy of the information provided.

1.9 Definition of Terms

Agricultural Production:   Agricultural production means the production of any growing grass or crop attached to the surface of the land, whether or not the grass or crop is to be sold commercially, and the production of any farm animals, including farmed elk, whether or not the animals are to be sold commercially.

Economic Growth:  Economic growth is an increase in the production of economic goods and services, compared from one period of time to another