ABSTRACT
In recent decades,
the potential contribution of agriculture to economic growth has been a subject
of much controversy among development economists. While some contend that agricultural
development is a pre-condition for industrialization, others strongly disagree
and argue for a different path.
Taking advantage of
Ordinary Least Square Method (OLD), the research carried out by means of secondary
data and using independent variables: Agricultural Development, Capital
Accumulation, Inflation Rate and Interest Rate re-examines the question of
whether agriculture could serve as an engine of growth for the Nigerian economy
Results from the
empirical analysis shows that the productivity in agricultural sector has not
appreciably impacted positively on the economic growth in
TABLE OF CONTENTS
Cover
Page .. .. .. .. .. .. ..
Title
Page .. .. .. .. .. .. .. ..
Certification .. .. .. .. .. .. .. .. i
Dedication .. .. .. .. .. .. .. .. .. ii
Acknowledgement .. .. .. .. .. .. .. iii
Abstract .. .. .. .. .. .. .. .. iv
Table
of Contents .. .. .. .. .. .. v-vii
CHAPTER ONE
INTRODUCTION .. .. .. .. .. ..
1.1 Background of the Study .. .. .. .. .. 1
1.2 Statement of Problem .. .. .. .. .. .. 12
1.3 Objectives of the Study .. .. .. .. .. 15
1.4 Statement of Hypothesis ... .. .. .. .. 16
1.5 Significance of the Study .. .. .. .. 16
1.6 Scope and Limitations of the Study .. .. .. 17
CHAPTER
TWO
LITERATURE REVIEW
2.1 Theoretical Literature .. .. .. .. .. 18
2.1.1 Agriculture
As A Passive Contributor to
Economic
Development (Classical School
of 1950s and
1960s). .. .. .. .. .. .. 30
2.1.2
Agricultural led Industrialization
(Classical School
of 1970s and 1980s) .. .. .. 31
2.1.3
Agricultural Linkages And Growth and
Development .. .. .. .. .. .. .. 32
2.1.4 Problems Associated with Agricultural Development 36
2.1.5 Empirical Literature .. .. .. .. .. .. 45
2.2.1 Agriculture and Poverty Reduction .. .. .. 46
2.2.2 Agriculture and Nutrition .. .. .. .. .. 47
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Methodology .. .. .. ..
.. . . ..
51
3.2 Area of Study and Coverage .. ... .... .. 52
3.3 Model Specification .. .. .. .. .. .. 52
3.4 Data Sources .. .. .. .. .. .. .. 53
3.5 Method of Evaluation .. .. .. .. .. 54
CHAPTER FOUR
PRESENTATION AND ANALYSIS OF
RESULTS
4.1 Unit Root Test .. .. .. .. .. .. 59
4.2 Co-Integration Test .. .. .. .. .. .. 61
4.3 Economic Opinion, Interpretation .. .. .. 63
4.4 Statistical Criteria of the Result .. .. .. .. 65
4.5 Econometric Criteria of the Result .. .. .. 68
CHAPTER FIVE
SUMMARY, RECOMMENDATION AND
CONCLUSION
5.1 Summary of Findings .. .. .. .. .. 67
5.2 Policy Recommendation .. .. .. .. .. 68
5.3 Conclusion .. .. .. .. .. .. .. 70
Bibliography .. .. .. .. .. .. .. ..
Appendix .. .. .. .. .. .. .. .. ..
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Agriculture is concerned with the husbandry of crops and
animals for food and other purposes. It
is the foundation upon which the development of stable human communities, such
as rural and urban communities has depended on in many parts of the world. The study of economic history provides us
with ample evidence that an agricultural revolution is a fundamental
pre-condition for economic development.
The agricultural sector has the potentials to be the industrial and
economic springboard from which a country’s development can take off. Indeed, more often than not, agricultural
activities are usually concentrated in the less developed rural areas where
there is a critical need for rural transformation, redistribution, poverty
alleviation and socio-economic development.
The agricultural sector has the potentials to shape the
landscape, provide environmental benefits such as conservation, guarantee
sustainable management of renewable natural resources, preserve biodiversity
and contribute to the viability of rural areas.
Through its spheres of activities at both the macro and micro levels,
the agricultural sector is strategically positioned to have a high multiplier
and linkage effect on any nation’s quest for socio economic and industrial
development.
The growth of the agricultural sector in
smooth.
Anyanwu (1967) held that during the colonial period
between 1861 – 1960, attention was given to agricultural research and extension
services. Among the activities that was
done, the first was the establishment of a research station in
British Cotton Growing Association (BCGA) in 1899 for experimental purposes
strictly for cotton and was named Moor Plantation in
In 1912, the Department of Agriculture was established in
each of the then Southern and
but the activities of the department were virtually suspended between 1912 and
1921 as a result of the First World War and its aftermath. The period 1929 and 1945 was a difficult one
for the agricultural sector of
the world prices on commodities fluctuated.
This affected the agricultural sector negatively because the volume of
agricultural produce increased but the value did not increase proportionately.
The period 1945 – 1954 marked the period of export boom,
because countries were just recovering from the Second World War and countries
that needed to develop their destroyed industrial sector were many. They depended on primary product for the
beginning stage of industrialization.
They needed to revitalize their industrial sector by demanding primary
goods. Prices of primary products rose
higher again because there were speculations that there would be a Third World
War due to the outbreak of the Korean War.
However, after this period, there came another period of price
instability. This made the reliance on
agriculture and its products to fall, leading to the establishment of a market
board. This board bought these products
from the local farmers and sold them overseas.
In spite of all the periods,
agriculture. In the pre-Independence
era, the agricultural sector contributed most to the GDP of Nigeria. Helleiner (1966) said that in 1929, export
production amounted to 57% of
revenue and in that 57%, agriculture made up about 80% of the export. On attainment of political independence in
1960, the trend was still very much the same, the Nigerian economy could
reasonably be described as an agricultural economy, because agriculture served
as the engine of growth of the overall economy (Ogen, 2003: 231-234), from the
stand point of occupational distribution and contribution to the GDP.
largest producer of cocoa, largest exporter of palm oil.
of other major commodities such as cotton, groundnut, rubber and hides and
skins (Alkali, 1997: 15-16). Between
1964 – 1965, agriculture accounted for 55% of GDP and employed 70% of the adult
workforce (Matton, 1981). In 1970,
agricultural export crops like cocoa, groundnut, cotton, rubber, palm oil, palm
kernel, etc. accounted for an average of between 65% - 75% of Nigeria foreign
exchange earnings and provided the most important source of revenue for the
Federal as well as State governments through export products and sale taxes
(Ekundare 1973), despite the reliance of Nigerian peasant farmers on
traditional tools and indigenous faming methods, these farmers produced 70% of
Nigeria’s exports and 95% of its food needs (Lawal, 1997: 195).
However, the 1967 – 1970 Civil War in
coincided with the ‘Oil Boom’ era, which resulted in extensive exploration and
export of petroleum and its products.
This led
to neglect its strong agriculture in favour of an unhealthy dependence on oil
(United States Department of State, 2005).
Ever since then,
has been witnessing extreme poverty and insufficiency of basic food items. The agricultural sector contributions now
account for less than 5% of
GDP (Olagbaju and Fashola, 1996: 263).
It is against this back drop that we set out to research on the impact
of agricultural development on
economic growth.
As noted earlier, the neglect of the agricultural sector
and the dependence of
on a mono-cultural crude oil based economy had not augured well for the
well-being of the Nigerian economy. In a
bid to address this drift, the Nigerian government as from 1975 became directly
involved in the commercial production of food and cash crops.
Several large scale agricultural projects specializing in
the production of grains, livestock, dairies and animal feeds, to mention but a
few, were established (Fasipe, 1990: 129-130).
Sugar factories were also established at Numan, Lafiagi and sunti
(Lawal, 1997: 196).
The Nigerian Agricultural and Co-operative Bank (NACB)
was established in 1973 as part of government’s effort to invest oil wealth
into the agricultural sector through the provision of credit facilities to
support agriculture and agro-allied businesses (Olagunju, 2000: 90). By 1995 the bank had granted the sum of $3,179.6
million as loan to the Private Sector.
-
The River Basin
Development Authorities (RBDA) were conceived in 1963 and were to cater for the
development of land and mineral resources potentials of
-
Operation Feed The
Nation (OFN) was commissioned in the 1970s with the main objectives of:
1)
Mobilizing the nation
towards self sufficiency and self reliance in food.
2)
Encouraging the
sector of population which relies on buying food to growing its own food.
3)
Encouraging general
pride in agriculture through the realization that a nation which cannot feed
itself, cannot be proud etc.
The OFN which was launched in 1976 to generate public
awareness of the importance of agriculture to national development, and
mobilize both rural and urban dwellers to participate in agriculture, be it in
conventional crop farms, fish farms, backyard gardens or poultry did not
realize the objectives of reducing or eliminating food imports and achieving
self-sufficiency so in 1980 it was replaced with the Green Revolution
Programme.
- The Green
Revolution; This was a more deliberate and calculated approach to the food
production problem. The programme was
followed by the mounting of food strategies mission for
Federal Ministry of Agriculture, which estimated the level of food production
needed to achieve self-sufficiency. Much
of the recommendations of the programme, such as the expansion of the
Integrated Agricultural Development Programme (ADP) to cover all States of the
Federation, support for artisanal fishers and aquaculture and the establishment
of grain storage facilities, among others, are still being implemented.
- The Directorate
of Food, Roads And Rural Infrastructure (DFRI):
This was established by the Federal Military Government in 1986 and was
intended to bring development to the rural areas where over 70% of the
population reside and work principally as farmers. The mandate given to DFRI is as follows:
1)
To improve the
quality of life and standard of living of the people in the rural areas.
2)
To use the enormous
resources of the rural areas to lay a solid foundation for the security,
socio-economic growth and development activities of the rural areas to those of
the Local Government Areas; the States and the Federal Government.
3)
To ensure a deeply
rooted and self-sustaining development process based on effectively mobilized
mass participation.
In spite of all these efforts, it is heartrending to note
that as from the mid 70s,
became a net importer of various agricultural products. In 1982 alone,
palm oil at the cost of 92 million USD and 55,000mt tons of cotton valued at 92
million USD (Alkali, 1997:10). Between
1973 and 1980, a total of 7.07million tons of wheat, 1.62 million tons of rice
and 431,000 tons of maize were imported.
Thus from
million in the 60s, the cost of food imports in Nigeria rose to
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