THE IMPACT OF AGRICULTURAL POLICIES ON NIGERIAN ECONOMY
| PAGES = 65 | CHAPTERS = 1 – 5 |
Abstract
This study investigates the influence of agricultural policies on Nigeria’s economy. It explores critical aspects of Nigeria’s agricultural policies, focusing on their formulation, implementation, and the extent of their success in advancing the agricultural sector. Despite the introduction of various agricultural policies over the years, the study highlights that Nigeria continues to grapple with issues such as food insecurity, malnutrition, hunger, and decreasing agricultural income, as evidenced by a declining agricultural GDP. Data for this research was gathered from both primary and secondary sources. Primary data was obtained through questionnaires and interviews, designed to extract detailed insights from respondents. The questionnaire featured twenty-eight structured questions, both open and closed-ended, which were validated before administration. Secondary data sources included textbooks, journals, government reports, and online resources. The study tested three hypotheses and analyzed the data using simple percentages, tables, pie charts, and chi-square statistical methods. Findings revealed that agricultural policies often lack sufficient data at the formulation stage, face implementation challenges, provide inadequate micro-credit support to rural farmers, and suffer from leakage issues that benefit unintended recipients. Recommendations include ensuring that agricultural policies consider social, economic, political, and environmental impacts and enhancing implementation strategies to address existing challenges and achieve policy objectives.
Chapter One
Introduction
1.1 Background to the Problem
Agriculture is a critical component of the economy, linking various sectors and playing a vital role in fostering broad-based growth essential for development. It is fundamental to human survival and economic progress, providing essential food and raw materials for industry. The advancement of agriculture relies heavily on effective agricultural policies. Nigeria’s first national agricultural policy was adopted in 1988, intended to guide the sector for approximately fifteen years until 2000. In 2001, a new policy was introduced, building upon the previous one with more specific goals and improved articulation. Agricultural policies are supported by sub-policies that facilitate sector growth and are influenced by macroeconomic policies that create a conducive environment for agriculture. These macroeconomic policies, including fiscal, monetary, trade, and budgetary policies, significantly impact agricultural profitability and farmer welfare by affecting budget allocations, credit access, subsidies, and taxes.
Agriculture is a cornerstone of Nigeria’s economy, contributing to food security, supplying raw materials and labor to industries, providing employment, generating foreign exchange earnings, and creating markets for agricultural products (Okumadewa, 1997). The sector’s strong economic link underscores the need for effective agricultural policies and support from both the public and private sectors. Public sector support includes agricultural research, extension services, commodity marketing, input supply, and land use legislation, while private sector involvement includes research funding, capacity building for farmers, and financial support for farm businesses. International organizations such as the World Bank and the Food and Agriculture Organization also provide financial and technical support.
Despite the importance of agriculture, public expenditure on the sector has been inadequate, failing to meet policy objectives (IFPRI, 2008). In a country like Nigeria, heavily dependent on oil, neglecting agriculture poses significant economic risks. Fluctuating food prices can lead to inflation, and disruptions in domestic agricultural production can impact price stability. Food security is also critical, as demonstrated by historical instances where food was used as a tool of war. This paper examines the impact of Nigeria’s agricultural policies on its economy, noting that while significant research exists on this topic, current discourse increasingly focuses on enhancing agriculture’s role amid Nigeria’s oil-driven economy.
1.2 Statement of the Problem
Agriculture remains a crucial part of Nigeria’s economy, with approximately 80% of the population engaged in agricultural activities. Historically, agriculture was a major source of revenue and economic stability, especially during the 1960s to 1980s when the sector contributed significantly to the national income across Nigeria’s regions (Anyanwu, 1997). However, the discovery of crude oil led to a gradual neglect of agriculture. Soludo (2004) notes that despite the oil sector’s dominance in foreign exchange earnings, agriculture continues to be a key economic driver. It contributes the largest share of GDP, serves as the largest non-oil export earner, employs the most labor, and plays a significant role in wealth creation and poverty alleviation. Despite its importance, agricultural production growth has stagnated, failing to keep pace with the needs of a rapidly growing population, leading to increased food and raw material imports.
**Implicit from the above quotation is that the potential of the agri-business sector to be a major employer and foreign exchange earner has been significantly compromised. Consequently, a substantial portion of Nigeria’s population, particularly those residing in rural areas, remains impoverished. The Nigeria Poverty Assessment 2007 attributes the sharp rise in poverty rates to low and declining agricultural productivity, which exacerbates rural poverty. The report further indicates that households led by individuals engaged in agriculture experience the highest levels of poverty, with over 60% in 2004 compared to less than 50% in other occupations. This suggests that agriculture is a major contributor to poverty in Nigeria. Farming households face severe poverty due to inadequate income from agricultural activities. Scholars such as Anyanwu (1997), Onah (2006), Umoh (2001), and Ayatse and Akuva (2009) identify poor policy formulation and implementation as key factors hindering agricultural productivity and income. For instance, Anyanwu (1997) highlights that government policies have largely failed to address issues such as land tenure, provision of agricultural facilities, access to micro-credit, market access, and agricultural education for rural farmers. Eze et al. (2010) point out that credit access remains a significant issue, particularly for poor farmers. The Nigerian Poverty Assessment Report 2007 notes that existing credit sources are inadequate for poor farmers, who are unlikely to invest in productivity-enhancing inputs without access to credit. Innovative credit solutions, such as group credit systems used in other countries, are needed. Additionally, agricultural extension services and infrastructure remain inadequate, with over 85% of Nigerian farmers lacking access to these essential resources. This situation suggests that poor agricultural policies are a major factor contributing to the sector’s limited impact on the economy. The benefits of these policies often accrue to individuals outside the agricultural sector, making agricultural programs appear illusory and deceptive to farmers. Policy initiatives frequently fail to incorporate comprehensive environmental, economic, and social impact analyses, undermining their effectiveness.
The intended goals of agricultural policies—such as generating employment, reducing poverty, ensuring food security, improving per capita income, and enhancing Nigeria’s agricultural products’ competitiveness—remain largely unmet. The National Economic Empowerment and Development Strategy (NEEDS) 2004 report indicates a significant decline in agricultural GDP, despite numerous government programs aimed at boosting productivity, including the National Accelerated Food Production Project (NAFPP), the Nigerian Agricultural and Co-Operative Bank (NACB), River Basin Development Authorities (RBDAs), Operation Feed the Nation (OFN), Agricultural Credit Guarantee Scheme (ACGS), Green Revolution Programme (GRP), and Agricultural Development Projects (ADPs). This study will examine the impact of agricultural policies on Nigeria’s economy and seek to address the following questions:
(i) Have agricultural policies significantly impacted the Nigerian economy?
(ii) Have these policies influenced the growth and development of the agricultural sector?
(iii) What constraints hinder the effectiveness of agricultural policies in Nigeria?
(iv) Do the formulation and implementation of these policies follow proper protocols?
(v) What measures can improve the formulation and implementation of agricultural policies in Nigeria?
1.3 Objectives of the Study
The objectives of this study are divided into broad and specific categories:
- Broad Objective: To evaluate the impact of agricultural policies on Nigeria’s economy.
- Specific Objectives:
(i) To assess the impact of agricultural policies on the Nigerian economy.
(ii) To determine whether these policies have contributed to the growth and development of the agricultural sector.
(iii) To identify the constraints affecting agricultural policies in Nigeria.
(iv) To propose solutions for enhancing the formulation and implementation of agricultural policies.
1.4 Significance of the Study
The significance of this study lies in its contribution to existing knowledge. According to Obasi (1999:73), research advances knowledge and helps individuals relate more effectively to their environment. This study’s significance is categorized into theoretical, empirical, and practical aspects:
- Theoretical Significance: This study aims to contribute to the advancement of theories in public administration and social sciences by providing reliable findings on the impact of agricultural policies on Nigeria’s economy. It will enhance understanding of public policy management in Nigeria, particularly in agriculture, and offer insights into the challenges facing policy implementation. This contribution is vital for improving agricultural policies and achieving national development goals.
- Empirical Significance: This research will serve as a foundational reference for future studies on agricultural policies’ impact on Nigeria’s economy. It will provide valuable bibliographical resources for academics and stimulate further research in this area.
- Practical Significance: Practically, this study will offer policymakers and key stakeholders guidance for effective policy-making in the agricultural sector. It will suggest ways to address frequent failures in agricultural policies and advocate for reforms in public bureaucracies responsible for policy implementation. This study provides a comprehensive examination of Nigeria’s agricultural sector issues and proposes practical solutions for improvement.
1.5 Scope and Limitations
This study focuses on evaluating the impact of agricultural policies on Nigeria’s economy, covering both past and present government policies and programs. However, the research faces several limitations:
- The study may not encompass all aspects of government agricultural policies due to the need to highlight dominant issues within the constraints of a Master’s thesis.
- Limited access to reliable and up-to-date data and restricted access to government officials and sensitive information hindered the research.
- The scarcity of comprehensive literature on the impact of agricultural policies also posed challenges. Efforts were made to address these limitations through internet resources, textbooks, journals, and interviews with civil servants in the Ministry of Agriculture and related agencies.
Despite these constraints, the study aims to maintain its quality by supplementing information from various sources and addressing the challenges in data collection and analysis.