CONTRIBUTION OF AGRICULTURE ON ECONOMIC GROWTH OF NIGERIA

CHAPTER ONE

INTRODUCTION

1:1 Background of study

The term agriculture is derived from the Latin word ‘ager’ meaning field and ‘cultura’ meaning cultivation. This suggests that the earliest form of production of agriculture was crop production. (Are, Igbokwe, Asadu, Barva, 2010; Ere bor2003).

Agriculture has been the backbone of Nigeria’s economy for centuries. Historically, agriculture has been the primary source of livelihood for the majority of Nigeria’s population and has also contributed significantly to the country’s economic growth.

According to data from World Bank 2012, agriculture accounts for about 22%of Nigeria’s gross domestic product (gdp) and employs approximately 60% of the country’s labour force.

The contribution of agriculture can be traced back to the pre-colonial Era, this period spanned from the 15^th to the 19^th century, during this time, agriculture was mainly subsistence and agricultural productivity was limited. The main crops cultivated during the pre-colonial era were yams, millet, maize, soghum and cassava (Adedoyin, 2003).

However, the introduction of new farming technologies such as improved seed varieties and irrigation systems during the colonial period, paved the way for an increased in agricultural productivity. (Eicher and Maredia, 2015). This has resulted in the increase of production of food and more diversified agricultural systems leading to greater food security and the reduction of poverty (Fan and Rosegrant, 2017.

The government established institutions such as National Agricultural Research Systems (NARS) is a network of public institutions that aims to conduct research and development activities in agriculture. The institution has been established to improve agricultural productivity and ensure food security (Kwasi-gyasi, 2020). Agricultural Training Institution (ATIS). It was established to improve agricultural knowledge and skills, (Omolo, 2018). Agricultural Extension Services (AES), these services have been established to enhance the dissemination of agricultural information and technologies (Ojiem, 2017). Agricultural Development Banks (ADB), these banks have been established to provide financing for agricultural development (Khadjavi, 2015). National agricultural Advisory Services (NAADS) aims to enhance agricultural productivity by providing farmers with improved agricultural technologies and practices (Kizza, 2014).

The green revelation in Nigeria was introduced in the 19960’s and 1970’s. It was a period of intensive agricultural research and development characterized by the introduction of high yielding seed varieties, chemical fertile, pesticides, and improved farming practices (Akpan and Udoh, 2017).

The green revolution was initiated by the Nigeria government in collaboration with the international development partners such as the international institute of tropical agriculture (IITA). The food and agriculture organization (FAO), the World Bank and the United States agency for international development (USAID). (Adebayo and Olagunju, 2018).

According to the World Bank, the contribution of agriculture to Nigeria’s gross domestic product (GDP) has been fluctuating, here are some of trends; in 2010, agriculture contributed about 33% to Nigeria’s gdp (World Bank, 2021).

In 2015, agriculture’s contribution to Nigeria’s GDP dropped to 24.2% due to the decline in the oil pieces and subsequent recession. (World Bank, 2019).

In 2016, the Nigerian government launched various initiatives to diversify the economy with renewed focus on agriculture. As a result, agriculture’s contribution to Nigeria’s GDP increased to24.8% in 2017 and 25.7% in 2018(World Bank, 2019).

Despite the covid-19 pandemic’s impact on the global economy, agriculture’s contribution to Nigeria’s GDP increased to 26.8% in the third quarter of 2020(National bureau of statistics, 2020.)

Nigeria has 70.8millions hectares of agricultural land area. The agricultural production sector can be broadly divided into three (3) sectors, which include, Crop production, Livestock production and fisheries.

Crop production; crop production is the largest and the most widely practiced sector in agriculture. It is primary source of calories, nutrients and fiber for human and animals. According to food and agriculture organization (FAO), global crop production like maize, cassava, guinea corn, yam and beans, millet and rice rose from 3.7 million metric tons in 2017 to 40 million metric tons of rice consumed in Nigeria annually, as for cassava, Nigeria produced 59 million tons in 2017 making it the world largest producer (approximately 20%of global production.)

Livestock production; livestock production is another crucial sector of agriculture and is essential for providing animal source protein for human consumption.

According to FAO, the global livestock population in 2020 reached to 79.1 billion with chicken being the most populated. (FAO, 2021.)

Fisheries; fisheries is the collection or the total spice of fish. It provide a significant source of animal protein, income and employment globally. According to FAO, food product contribute to the food and nutrition security of approximatively 3 billion people worldwide. (FAO, 2018).

In summary agricultural production sector players are crucial in food security, economic growth and rural development

However, they face several limitation such as climate change, pests and diseases, environmental degradation, limited access to inputs and markets and animal diseases.

1.2 Statement of problem

In recent years, there has been a growing concern about the contribution of agriculture to economic growth of Nigeria. Despite being endowed with vest arable land and favourable seeds. The major problem that motivated this study include;

1. Poor funding: Insufficient funding for agriculture is a prevalent issue in many countries, particularly in developing country like Nigeria. According to the Food and Agriculture Organization of the United Nations (FAO), the total international public funding for agriculture, forestry, and fisheries has been declining since the 1980s. Inadequate funding limits investments in agricultural inputs, technologies, infrastructure, and research, hindering productivity improvements. (FAO, "Public Expenditure Review in Agriculture: A Synthesis of Country Experiences")

2. Inadequate infrastructure: The lack of proper infrastructure in rural areas poses significant challenges for agricultural productivity. According to the World Bank, around 45% of rural populations in developing countries lack access to all-weather roads, making it difficult to transport agricultural inputs, machinery, and produce to markets. Additionally, inadequate storage facilities lead to post-harvest losses estimated at 14-18% globally, further impacting productivity. (World Bank, "Rural Infrastructure and Agro-Industries Division")

3. Low productivity: Low agricultural productivity is a persistent issue in many countries. For example, the World Bank states that sub-Saharan Africa has the lowest agricultural productivity globally, with yields often less than half of those in other developing regions. Inadequate investment, limited access to modern technologies, and inefficient farming practices contribute to this low productivity. (World Bank, "Growing Africa: Unlocking the Potential of Agribusiness")

4. Lack of access to credit facilities: Limited access to credit facilities is a significant constraint for many farmers, particularly smallholders in developing countries. According to the International Fund for Agricultural Development (IFAD), around 75% of the world's poorest people live in rural areas and have limited access to financial services. This lack of credit hampers investments in inputs, machinery, and infrastructure, reducing productivity. (IFAD, "Enabling the Rural Poor to Overcome Poverty")

5. Rising food importation: The extent of food importation and its impact on agricultural productivity cannot be overlooked. For instance, a study by the United Nations Conference on Trade and Development (UNCTAD) found that the share of imported food in sub-Saharan Africa increased from 12% in the 1970s to 25% in the 2000s. Increasing food imports can negatively affect domestic agricultural productivity, as local farmers may struggle to compete with cheaper imported products. (Source: UNCTAD, "Trade and Development Report 2013")

The impacts of these factors are not equally distributed, as vulnerable populations such as women, children, elderly people, and people living in poverty are more affected by these challenges. Therefore, it is crucial to develop policies and strategies that address these challenges in a holistic and equitable manner, taking into account the specific contexts and needs of different communities.

The problem of this research is to investigate the contribution of agriculture to economic growth of Nigeria and to proffer solution to the existing challenges.

1.3 Research question

What is the contribution of crop production on economic growth
Does livestock production significantly contribute to economic growth
What is the effect of fisheries on economic growth
Is there a long run relationship between agriculture and economic growth

1.4 Objective of the study

1. To assess the effect of crop production on the economic growth of Nigeria

2. To examine the contributions of livestock production on economic growth of Nigeria

3. To examine the effect of fisheries on the economic growth of Nigeria

4. To find out if there exist a long run relationship between crop production, livestock production, fisheries and economic growth.

1.5 Research hypothesis

Ho = crop production has no effect on economic growth of Nigeria

H1= crop production has an effect on economic growth

Ho= livestock production has not contributed to the economic growth of Nigeria

H1= livestock production has contributed to the economic growth of Nigeria

Ho= fisheries has no effect on economic growth of Nigeria

H1=fisheries has an effect on economic growth of Nigeria

Ho= there exist no long run relationship between crop production, livestock production, fisheries on economic growth of Nigeria

H1= there exist a long run relationship between crop production’ livestock production, fisheries on economic growth of Nigeria

1.6 Justification of study

Despite the contribution of agriculture in Nigeria’s economy, and the exploration of its contributed to the country’s economic growth can help inform policies aimed at optimizing its productivity, since agriculture is the largest employer of labour in Nigeria,

This research work attempt to the following question

What has agriculture contributed to economic growth
What causes agriculture productivity to reduce
How can we adjust to bring back enough productivity to economic growth

The result from this research will be relevant to policy marks on the development of agricultural policies that prioritize innervations that increase productivity and improve sustainable practices that will contributed to the economic growth. This could lead to increased employment opportunity, higher income generation and more sustainable agricultural sector.

1.7 Scope and limitation

This work investigate agriculture (crop production, livestock production, fisheries). The scope is limited to a period from 1980-2022. The choice of data is based on the availability of data.

1.8 Organization of the study

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