THE IMPACT OF AGRICULTURAL POLICIES ON
NIGERIA ECONOMY

CHAPTER
ONE

INTRODUCTION

1.1     
Background
of the study

Agriculture in the context of the economy is tied with the
various sectors and is essential for generating broad based growth necessary
for development. Agriculture is fundamental to the sustenance of life and it is
the bedrock of economic development, especially in the provision of adequate
and nutritious food so vital for human development and industrial raw
materials. Sustainable agricultural development is propelled by agricultural
policies. The first national policy on agriculture was adopted in 1988 and was
accepted to remain valid for about fifteen years, that is, up to year 2000.
Also, in year 2001, a new policy document on agriculture, was lunched. The new
policy document has most of the features of the old ones, but with more focused
direction and better articulation. Agricultural policies are supported by
sub-policies that facilitate the growth of the sector. Implementation of
agricultural policies is however moderated by macro-economic policies which
provide the enabling environment for agriculture to grow paripassu with the
other sectors. These policies usually have major impact on profitability of the
agricultural system and the welfare of farmers as they affect the flow of funds
to the sector in terms of budgetary allocation, credit, subsides, taxes and
therefore, must be in harmony and mutually reinforcing with the agricultural
policies. The macro-policies comprise the fiscal, monetary, trade budgetary
policies and other policies that govern macro-prices.

Agriculture contributes immensely to the Nigeria economy in
various ways, namely, in the provision of food for the increasing population,
supply of adequate raw materials (and labour input) to a growing industrial
sector, a major source of employment; generation of foreign exchange earnings,
and, provision of market for the products of the agrarian sector (Okumadewa,
1997). The agrarian sector has a strong relationship with the economy;
hence, concern for agricultural policies and the economy. Support for
agriculture is widely driven by the public sector, which has established
institutional support in form of agricultural research extension, commodity
marketing, input supply and land use legislation, to fast-track development of
agrarian sector to achieve the aim of economic development. The importance of
the agrarian sector, also suggests the intervention of the private sector
through sponsorship of research and breakthrough on agricultural issues in
Universities, capacity building for farmers and, most importantly, the
provision of fund for farm businesses. International governmental and
non-governmental agencies including the World Bank Fund and Agricultural
Organization of the United Nations, also contribute through on farm and
off-farm support in form of finance, input supply strengthening of technical
capacity of other support institutions.
Agricultural policies provide among others, for
adequate financing of agriculture. The role of agricultural sector in
diversification of economy cannot be over emphasized, given that it guarantees
food security of any nation. Public expenditure on agriculture has, however,
been shown not to be substantial enough to meet the objectives of Government
agriculture policies (IFPRI, 2008). For a developing country with a
mono-product oil economy such as Nigeria, Government’s indifferent to
agriculture portends great danger to the economy for many reasons. For
instance, fluctuating food prices are a precursor of inflation. Secondly, from
the expenditure approach to national income accounting, it is likely that Engel’s
Law that a large chunk of expenditure in developing economics goes to
food-holds meaning that shocks to the domestic agricultural production and
supply could be damaging to price stability. There is also the perspective of
food security, in an era when food has been used as a weapon of War (United
Nations Oil for food Deal in Iraq) and as bargaining tool (North Korea- United
States Food Deal), even within Nigeria, the federal military government
during Nigerian-Biafran War used food blocked as a tool of war. This paper
examines Nigeria’s agricultural policies and its impact on the economy. It is
interesting to note that this area of study has generated a lot of research. Be
it as it may, current thinking, particularly in Nigeria seems to focus on how
to improve on agriculture as oil has taken sole control of Nigeria economy

1.2 STATEMENT OF THE
PROBLEM

Agriculture
is the main-stay of the Nigerian economy. According to about 80% (percent) of
the Nigerian population engage in agricultural dominated activities. In other
words, agricultural sector in Nigeria from right sense of judgment suppose to
be the major source of revenue to government as well as the Nigerian citizens
especially the (agriculturalist). This was exactly the case in 1960s to 1980s,
considering the achievements made from the earnings of agricultural sector in
the then three regions of Nigeria, namely, Eastern, Western and Northern
regions (Anyanwu,1997). However, with the discovery of crude oil in Nigeria,
agriculture has gradually been neglected. Soludo (2004:678) captures this when
he stated that: Despite the dominant role of the petroleum sector as the major
foreign exchange earner, agriculture remains the mainstay of Nigeria’s economy.
In addition, to contributing the largest share of GDP, it is the largest nonoil
export earner, the largest employer of labour, and a key contributor to wealth
creation and poverty alleviation, as a large percentage of the population
derives its income from agriculture and related activities…. Over the years the
rate of growth in agricultural production has stagnated and failed to keep pace
with needs of a rapidly growing population, resulting in a progressive increase
in import bills for food and industrial raw materials.
Implicit from the above quotation is that the potential of the agri-business
sector as a major employer of the growing labour force and an earner of
foreign exchange has also been undermined. As a result, the large majority
of Nigeria’s population, many of whom live in rural areas, remain poor. In a
similar view, the Nigeria Poverty Assessment 2007 attributed the galloping
increase in the rate of Nigerian poverty rate as a result of low and declining
yield/ productivity in agriculture and this contributes significantly to rural
poverty. The Nigerian Poverty Assessment Report further contended that in the
light of the poor state of agriculture, as the survey results show, households
whose heads are engaged in the sector tended to have the highest level of
poverty incidence, over to per cent in 2004 compared to other occupations where
the incidence was less than 50 per cent. The sector thus accounts for a
significantly large proportion of the poor in Nigeria. Farming households
experience greater poverty due to low income from farming activities. As a
matter of fact, some of key reasons identified by some scholars such as Anyanwu
(1997), Onah (2006), Umoh (2001) and Ayatse and Akuva (2009) that have
contributed and hindered agricultural productivity and income from agriculture
in Nigeria are linked to poor policy formulation and implementation in the
sector. For instance Anyanwu (1997) observed that most of government policies
on agricultural have failed to address the issues of land tenure system,
provision of adequate agricultural facilities to farmers, access to
agricultural micro credits, access to markets for the sale of agricultural
provision of agricultural education to rural farmers on mechanized farming,
among others. Eze et al (2010) noted that access to credit is a problem for all
farmers and is particularly acute for poor farmer. It is on this note that the
Report of the Nigerian Poverty Assessment 2007 stated that:
None of the existing credit sources on agriculture appear able to provide
credit to poor farmers, without which it is unlikely that they will invest
heavily in productivity-increasing inputs. Given that poor farmers are less likely
to have assets for collateral, innovative ways need to be found to provide
credit, perhaps based on the group credit systems operating in other countries.
On the other hand, improving agricultural extension services as well as
providing adequate agricultural infrastructures have remained poor. Over 85%
(percent) of the Nigerian farmers have no access to agricultural extension
services and lack of necessary agricultural infrastructures that increase
productivity. We cannot understand why outside the poor agricultural policies
in Nigeria. The implication of this has been poor impact of the agriculture on
Nigerian economy. Therefore there is no empirical evident to show for the
enormous resources put into the agricultural sector as a means diversifying the
Nigerian economy from its crude oil based economy. The truth is that the
beneficiaries of these agricultural policies are mainly people who are outside
agricultural occupation. This situation has always present the introduction of
any agricultural policy or programme as illusive and deceit on the view farmers
and all others who wish to take occupation in agriculture. As a matter of fact,
the initiation of these policies do not take into consideration, the
environmental Impact Analysis (EIA) the economic impact analysis (EIA) and the
social impact analysis (SIA) to give the problems of agriculture in Nigeria a
holistic approach.Apparently, the intended goals and objectives of agricultural
policies such as generating massive employment through agriculture and
agro-based businesses, reduction of high poverty rate, ensuring sufficiency in
the supply of food for the Nigeria’s teeming population, improving per capital
income of Nigerians who engage in agriculture, taking comparative advantage on
the Nigerian agricultural products in the international markets among other
have remained partially unachievable considering some research findings on the
assessment of agriculture in Nigeria. The national Economic Empowerment and
Development Strategy (NEEDS) 2004 report give that the Gross Domestic Product
(GDP) of Nigerian agriculture has continue to decline drastically. This
indeed is worrisome considering the number of agricultural policies and
programmes which have been introduced by government to boost agricultural productivity
in Nigeria such as the National Accelerated Food Production Project (NAFPP),
the Nigerian Agricultural and co-Operative Bank (NACB), the River Basin
Development Authorities (RBDAs), Operation Feed the Nation (OFU), Agricultural
Credit Guarantee Scheme (ACGS), Green Revolution Programme (GRP), Agricultural
Development Project (ADPs), among others. It is therefore against this backdrop
that this study will investigate on the topic, the impact of agricultural
policies on Nigerian economy. It is in view of the fore-goings that this study
tends to raise the following questions:

(i)
Have agricultural policies made significant impact on Nigeria economy?
(ii) Have the agricultural policies reflected on the growth and development of
agricultural sector in Nigeria?

(Iii)
If not, what are the constraints militating against the agricultural policies
in Nigeria?

(iv)
Do the formulation and implementation of agricultural policies follow?
(v) What are the measures to be adopted in improving formulation and implementation
of agricultural policies in Nigeria?

1.3 OBJECTIVE OF THE STUDY

For purpose of clarity, the objectives of this study are
grouped into two categories namely: Broad and specific.

 Broad objective of the
study is to evaluate the impact of agricultural policies on Nigerian economy.

Specific objectives of this study are to:

(i) Ascertain the impact made by agricultural policies so far
on the Nigerian economy.
(ii) Examine whether the impact of agricultural
policies have reflected on the growth and development of agricultural sector in
Nigeria.
(iii) Identify the constraints militating
against the agricultural policies in Nigeria.
(iv) Proffer solutions towards improving the
formulation and implementation of agricultural policies in Nigeria.

1.4 SRESEARCH
HYPOTHESES

For
the successful completion of the study, the following research hypotheses were
formulated by the researcher; 

H0:there is no impact made by agricultural policies so far on
the Nigerian economy.
H1: there is impact made by agricultural policies so far
on the Nigerian economy

H02:there are no constraints militating against the agricultural
policies in Nigeria.
H2:there are constraints militating against the
agricultural policies in Nigeria.

1.5 SIGNIFICANCE OF THE STUDY

The
significance of the study presents the value or contribution which the research
will make to the existing knowledge. Obasi (1999:73), asserts that research is
most important tool for advancing knowledge and enables man to relate more
effectively to his environment. The significance of this study are categorized
into theoretical, empirical and practical significance. Theoretical
Significance:-
Theoretically, this study has the potential of
contributing greatly to the growth of existing theories in social sciences
particularly in public administration by helping to enrich the bank of
knowledge through its reliable findings on the assessment of the impact of agricultural
policies on Nigerian economy. This is to say that our study would assist in
improving the frontiers of knowledge especially in the management of the public
policies in Nigeria especially in the agricultural sector. The study will be of
immense significance in ascertaining the progress so far made by the government
in improving Nigerian economy through agriculture. On the other hand, the study
will assist in unveiling the challenges or factors militating against effective
implementation of government policies and programmes on agriculture and will
make useful suggestions towards ensuring the achievement of goals of such
agricultural policies and programmes. This is important because it is only
through viable agricultural policies that the government can revamp the
agricultural sector and ensure its target goals and objectives in national
development. This study also has the potentials of contributing immensely to
the existing body of literature on this subject matter. Literature on the
assessing the impact of agricultural on Nigerian economy are richly available
but few have been able to justify the current poor state of agriculture in
Nigeria from policy perspectives. Empirical Significance:- Empirically, this
study will serve as a foundation or base for future researchers who may in due
course of time wish to embark on the investigation on assessing the impact of
agricultural policies on Nigerian economy. In other words, this research will
serve the academia as a useful and veritable bibliographical reference which
will stimulate research for other related studies in relation to agricultural
policies and their impact in Nigeria economy. Practical Significance:-
Practically, this study is considered significant because it will contribute in
providing the decision makers and other key actors in the government with the
road- maps that will necessitate prompt, responsive and efficient policy making
in Nigerian agricultural sector. It will also suggest the panacea through which
frequent failures in Nigerian agricultural policies can be effectively tackled.
Last, but not the least, this study has the potential to strategically improve
the practical steps in implementations of the government agricultural policies
through its advocacy on reforming the public bureaucracies in Nigeria
especially those concerned with the implementation of government policies on
agriculture. In this regard, this work is a practical pain staking “post
mortem” surgical examination of the problems of Nigerian agricultural sector as
well as the way forward.

1.7SCOPE AND
LIMITATION OF THE STUDY

This study focuses on the evaluation of the impact of
agricultural policies on Nigerian economy. This study covers in detail, past
and present government policies and programmes on agriculture in Nigeria.
Nevertheless, a study of this magnitude cannot be completed successfully
without the researcher encountering some constraints or limitations. Therefore,
this work will not pretend to be containing all holistic information on the
government policies and programmes on agriculture, rather it will endeavour to
highlight the dominant issues and their impact in the Nigerian economy. Another
obvious limitation is the effort to trim the paper to a sizeable and acceptable
volume for a Master of Public Administration Degree. This obviously has not
been easy considering the subject matter of this research which boarder on
sensitive issues on the government agriculture policies, though this has in no
way affected the quality of this research work.
It is also pertinent to mention that inadequacy
of data or near absence of a reliable and up to date central data bank on the
theme of this study, which has been compounded by the inability of public
bureaucracies to grant full access to the researcher nearly mar the effort of
the researcher. In other words, paucity of literature on the impact of
government agricultural policies on Nigerian economy almost mar the effort of
the researcher. Also most of the relevant information collected so far, for this
study is in piece-meal and need serious effort to trim to the required
standard. On the other hand, some information are said to be classified
information and out of bound to non staff. Considering this, the researcher
seek other means to supplement and consolidate the information through the use
of internet materials, text books, journals, newspapers, magazines and past
research projects by students and research institutes. Further information were
collected from the (civil servants in the Ministry of Agriculture and
governmental agencies on agriculture) using questionnaire and interview. Also
considered as a limitation in this study hinges on our inability to elicit
information from the top government officials especially the Minister,
Commissioner, and Permanent Secretaries who failed to grant access to the
researcher to interview them face- to- face. Others who availed themselves for
interview still exhibited signs of fear to provide answers to some questions
asked while some questions were said to be top civil service secret. This as we
all know is common in Nigeria public sector organizations, because a country
where freedom of expression is problematic, it will be difficult getting the
unbiased views of some civil servants on apparently sensitive issues on
government policies on agriculture. As it is also a well known fact that
critics of government policies in the country had always suffered one form of
victimization or the other, such as loss of employment, suspension from their
jobs and at times harassment by the top government officials. In other words,
it is of concern to mention that it was difficult to maintain the researcher’s
neutrality in trying to be non-judgmental as this is an essential factor to
avoid, since the subjectivity of respondents invariably breeds a consequential
loss of objectivity. In other words, some respondents seek to force the
researcher to express his own opinions, particularly as he sought to know there’s
because it enables them to identify the researcher’s mind in order to adapt
responses. Impartial neutrality to some extent rendered the research colorless
as if one is a spy on managerial activities. However, the researcher ensured
that the limitations/constraints did not affect the outcome of the study by
supplementing the available information through internet material, text books,
journals and administration of questionnaire and oral interview.

1.7 SDEFINITION OF
TERMS

AGRICULTURE:Agriculture is the cultivation
and breeding of animals, plants and fungi for food, fiber, biofuel, medicinal
plants and other products used to sustain and enhance human life.

POLICY: A policy is a deliberate system of principles to guide
decisions and achieve rational outcomes. A policy is a statement of intent, and
is implemented as a procedure or protocol.

ECONOMY:Economy is an area of the production, distribution, or trade,
and consumption of goods and services by different agents.

1.8
ORGANIZATION OF THE STUDY

This
research work is organized in five chapters, for easy understanding, as follows

Chapter
one is concern with the introduction, which consist of the (overview, of the
study), historical background, statement of problem, objectives of the study,
research hypotheses, significance of the study, scope and limitation of the
study, definition of terms and historical background of the study. Chapter two
highlights the theoretical framework on which the study is based, thus the
review of related literature. Chapter three deals on the research design and
methodology adopted in the study. Chapter four concentrate on the data
collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and
recommendations made of the study  

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