THE AGRICULTURAL SECTOR AND THE NIGERIA ECONOMY (1980-2007).
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THE AGRICULTURAL SECTOR AND THE NIGERIA ECONOMY (1980-2007).
This study sets to investigate empirically, the impact of the agricultural sector on the Nigerian economy. This was examined based on the method of ordinary least square (OLS) of multiple regression premised on three equations. The three equations are treated as discreet equations using time series data on Gross Domestic Product, (GDP), balance of Payment (BOP), Unemployment rate (UMP), Index of Agricultural Production (IAP), Exchange Rate (EXR), index of manufacturing production (IMP) and capacity utilization (CU). The estimated result shows that IAP is rightly signed with GDP. Also, the IAP was not able to employ the teeming population in Nigeria as well as a disconnect between BOP and GDP. It is therefore recommended that the government should urgently engage proactive measures to boost agriculture as well as over hauling the educational curricula to place more emphasis on self-employment in agriculture.
TABLE OF CONTENTS
Title Page i
Table of Contents v
CHAPTER ONE: INTRODUCTION
1.1 Background of the study 1
1.2 Statement of the problem 4
1.3 Objectives of the study 6
1.4 Research questions 6
1.5 Hypothesis 7
1.6 Method of study 7
1.7 Scope of the study 8
1.8 Significance of the study 8
1.9 Organization of the study 9
CHAPTER TWO: LITERATURE REVIEW
2.1.1 Theoretical literature 10
2.1.2 System of agriculture 11
2.1.3 The role of agriculture in the economic development of
2.1.4 Problems of agriculture in Nigeria 18
2.1.5 Empirical literature review 29
2.1.6 Agriculture policies in Nigeria 41
2.3 Summary of literature review 43
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction 45
3.2 Sources of data 46
3.3 Model specification 47
3.4 A priori expectation of coefficients of the variables in the model 48
3.5 Data analysis technique 50
CHAPTER FOUR: DATA PRESENTATION ANALYSIS AND DISCUSSION OF FINDINGS
4.1 Introduction 52
4.2 Data presentation 53
4.3 Data analysis/discussion of findings 57
4.4 Analysis of model 1 57
4.3.2 Analysis of model 2 59
4.3.3 Analysis of model 3 61
CHAPTER FIVE: SUMMARY, RECOMMENDATIONS AND CONCLUSION
5.0 Summary 65
5.1 Recommendations 66
5.3.2 For further studies 66
5.2 Conclusion 66
5.2.1 Major findings 67
5.2.2 Other findings 68
Appendix 1 74
Appendix 2 75
Appendix 3 77
1.1 BACKGROUND OF THE STUDY
The agricultural sector in Nigeria context embraces all the sub-sectors of primary industry which include farming, fishing and forestry. The agricultural sector in Nigeria is the oldest and largest sector in the economy. Before the advent of the colonialist, rural Nigeria fairly complex organizations these social organizations were predominantly peasant communities, producing a variety of commodities mostly to satisfy the need of family in terms of food with small supplies for exchange with other communities (Anyanwu et al, structured of the Nigeria Economy 1960-1997).
The coming of the colonial masters brought about improvement in the agricultural sector. Agriculture was somehow Scientifics oriented. The colonialist introduced a money economy among the peasant communities by producing incentives for the local farmers to produce more crops for sale and eventual export to Western Europe.
Nigeria communities produced different types of crops and this was the reflection of their different environment and ecology. However over the years the agricultural sector was the mainstay of the Nigeria economy, not until the discovery of crude oil in commercial quantity in 1956 at Oloibiri in Niger Delta Area by Shell Bp petroleum Development Company (Good Wilson, 2002).
According to Heueiner (1966) export production accounted for about 75% of Nigeria Gross Domestic Product (G.D.P) in 1929. Oil palm alone accounted for between 85 and 90% of the total volume of export during the same period. In term of employment, more than 80% of the rural population of Nigeria engaged in one type of agricultural activity or the other, this roughly indicates the extent to which the agricultural sector absorb the labour force in the country. However a World Bank Report (1970) put it that the agricultural sector employed 71% of the total labour force in Nigeria.
The need to develop the agricultural sector alongside with the industrial sector has been recognized by successive government of the country. This is in realization that the single-minded pursuit of industrialization has rather been counterproductive. For instance there has been declining food production and the attendant rising foodstuff prices and food import, bills, which in turn implies increasing external dependence. Apart from the problems of declining food production. The output of agricultural raw materials is also declining and therefore unable to provide the necessary agricultural raw materials to industrial sector and as export.
The contribution of the agricultural sector to the development of any nation has been acknowledged at least since the time of Ricardo. For stance, in his principles of political economy and taxation, he viewed the problem of diminishing returns in agriculture as crucial because he believed that a limitation on the growth of agricultural output sets the ceiling or upper limit to the growth of the non-agricultural sector and to capital formation for economic expansion.
The role of agriculture in the developing countries in which we rightly belong, when we realize that over 2 of about 3 billion people living in the rural areas of the third world in the early 1990s grid out of meager and often inadequate existence in agricultural pursuit (Todaro 1992). Therefore it is imperative to look at the agricultural sector and the Nigeria economy.
1.2 STATEMENT OF THE PROBLEM
The agricultural sector which was the mainstay of the Nigerian economy, seem to suffer some setbacks since the discover of crude oil in commercial quantity in 1956. Other factors has also contributed to the downfalls, of the agricultural sector, the period between 1929 and 1945 was a difficult one for the export sector the great depression of the 1930s was marked by fluctuations in world commodity, prices especially primary commodity prices, this disturbances lasted till the end of the war.
Within 1945 and 1954 the economy was recovering from the effects of the Second World War, the demand for primary products rose again.
The agricultural sector needs to be developed alongside with other sector of the economy. Because it provide food for consumption, boast industrialization by providing inputs to industries, create employment, for the teaming population enable balance of trade by reducing over importation of foodstuff etc. which also lead to economic growth and development.
It is not ideal for any country to depend solely on one sector and neglect another because it will cause a big fall or backwardness to growth and development of the entire economy.
Successive government in Nigeria has proffer solution to the problems of the sector but to no avail. This is what induced the study.
1.3 OBJECTIVES OF THE STUDY
The aim of the this study, among other things; are,
i. Identify the roles played by the agricultural sector of the Nigeria economy.
ii. Examine the problems facing the sector
iii. Evaluate past efforts made by government at revamping the sector.
iv. Identify the factors that have been working against government effort.
1.4 RESEARCH QUESTIONS
In course of carrying out this study the following research questions are put forward to achieve our objectives.
i. How does the agricultural sector contribute to economic growth?
ii. To what extend has the government been able to set the pace in developing the agricultural sector?
iii. What are the constraints faced by the Nigeria farmers?
iv. Does the type of implement used by the Nigeria farmers affect their productivity?
H01: There is no significant relationship between the performance of the agricultural sector and unemployment.
H02: There is no significant relationship between the performance of the agricultural sector and economic growth.
H03: There is no significant relationship between the agricultural sector and balance of payments.
1.6 METHOD OF STUDY
For the researcher to achieve its objective, both primary and secondary source was use. The tool for the analysis is multiple regressions.
1.7 SCOPE OF THE STUDY
The study is primary aimed at examining the roles of the agricultural sector in Nigerian economy. Its contribution to economic growth, full employment, balance of payments equilibrium and finally constraints faced by the sector. The period under review is (1980-2007).
1.8 SIGNIFICANCE OF THE STUDY
The study is important first because it is an attempt to look at the contribution of the agricultural sector to the growth of the economy.
Secondly the study is also important because it will expose the problems faced by the agricultural sector of the economy.
Thirdly considering the state of the Nigeria economy today, it helps us to appreciate the need to diversify the economy.
Finally, as an academic exercise, it will contribute to existence knowledge and serve as a reference document on the field.
1.9 ORGANIZATION OF THE STUDY
The study is organized as follows chapter is one all about the background of the study, statement of the problem, objective of study, research question/hypothesis, method of study, scope of study, significance.
Chapter two is the literature review, chapter three is research methodology.
Chapter four is presentation of data and its analysis. While the final chapter is chapter five, which include summary, recommendation and conclusion.