Boosting Agricultural Production in Nigeria

CORPORATE AFFAIRS COMMISSION

RESEARCH UNIT

Date : 2nd Quarter, 2009

From : Agriculture Desk
Subject : Boosting Agricultural Productivity in Nigeria.

Introduction:

Agricultural sector was the mainstay of the Nigerian economy before independence, 75% of the Nigerian workforce was engaged in agriculture and immediately after it, until the oil boom of the 1970s. In the 1970s, agriculture provided the needed food for the population as well as serving as a major foreign exchange earner for the country. However, with the subsequent increase in foreign exchange earnings from crude oil trade, import of finished goods such as industrial inputs, food and services became dominant in the Nigerian economy. The Nigeria Agricultural sector was indeed rendered less competitive, overtime, through the over-valued currency, inappropriate pricing policies and deficiency of farm labour caused by the migration of the youths to the urban centres in pursuit of white colour jobs.
Many factors have militated against agricultural output in Nigeria, some of which are declining arable land area per capita, erratic rainfall, and poor supply of fertilizer to resuscitate the depleted soils, low capital expenditure and poor finance resources for the farmers in form of loans.

Place of Agriculture in Nigeria.

Nigeria depends heavily on the oil industry for its revenues. It is predominantly still an agricultural society. Approximately 75% of the population engages in agriculture at a subsistence level. Agriculture provided 41% of Nigeria’s total gross domestic product (GDP) in 1999, which represents a decrease of 24.7% from its contribution of 65.7% to the GDP in 1957.

Nigeria has a wide range of climatic conditions that augurs well for cultivating a variety of food and cash crops. The food crops include cassava, yams, corn, Coco-yams. Cow-peas, beans, sweet potatoes, millet, plantain, bananas, rice, sorghum as well as variety of fruits and vegetables. The leading cash crops are cocoa, citrus, cotton, groundnuts (peanuts), palm oil, palm kernel and rubber. These were the country’s major exports in the 1960s and early 1970s. The chief export destinations for Nigerian agricultural exports are Britain, the United States, Canada, France and Germany.

A significant portion of the agricultural sector in Nigeria involves cattle herding, fishing, poultry which contributed more than 2% to the GDP in the 1980s. According to the Agricultural Organisation in 1987 estimate, there were, 12.2 Million cattle, 13.2 million sheep, 26 million goats, 1.3 million pigs, 700,000 donkeys, 250,000 horses and 18,000 camels mostly in northern Nigeria and owned by rural dwellers. Fisheries output which ranged from 600,000 to 700,000 tons annually in the 1970s had fallen to 120,000 tons. This was partly due to environmental degradation and water pollution in the Niger-Delta region by oil companies.
Nigeria’s agricultural production began to decline with the advent of the petroleum boom in the early 1970s. This led to distortion is the labour market and also affected the agricultural production level of both food and cash crops.

The Government paid low prices over the years on food for the domestic market in order to satisfy urban demand for cheap basic food products and these made agriculture less attractive.

CONTRIBUTION OF AGRICULTURE TO GDP

|YEAR |GROSS DOMESTIC PRODUCT(GDP) |
|1960 |60% |
|1970 |25% |
|1980 |24& |
|1990 |41% |

Challenges

Several factors such as drought, inadequate technology, poor transportation, trade restriction etc collectively, resulted in the low productivity, both per unit of land and per worker.

1. Inadequate supply of fertilizer:

The procurement and distribution of fertilizer have been the focal point in the Agricultural development. The Federal Government should reiterate its determination to ensure that farmers receive adequate supply of all categories of fertilizer at a subsidised rate. The Federal Ministry of Agriculture has to map out a workable strategy to ensure that genuine farmers have access to fertilizer at subsidised rate and to eliminate the nuisance of middlemen who stand between the farmers and the commodities.

2. Provision of Quality Certified Seeds for Farmers: There is a need for Government to establish a Seed Firm to ensure that farmers were provided seeds that meets international standard for satisfaction of its customers at affordable rate to enable farmers have reasonable return on their investment. By doing so these will help in boosting Agricultural productivity and generate employments in the country. Presently the country requires about 600,000 metric tons of certified Seeds annually which is a great challenge to Agricultural Institutions in the country.

3. Inadequate Funding:

Lack of funding has become one of the major impediments of Agricultural productivity in the country. The Nigerian government is not doing enough to address problem of local farmers. It should have provided credit facilities with lower interest rate to farmers through rural cooperative societies (community banks), to ensure that they are not forced to sell their grains cheaply to merchants to raise immediate cash. Recently the Federal government granted a loan to small-scale and large scale farmers amounting to N200 Billion in order to boost agricultural productivity in the Country. This is a good development toward achieving Food sufficiency in the nation.

4. Getting Young People to Engage in Agriculture:

It has been observed that young people do not want to go and farm like some of our parents and grand parents did with hoe all day long under hot sun. They need strong incentives to come into Agriculture and not to do things the old way. Therefore, young scientists, technologists and other professionals have to be involved in Agricultural production, processing and marketing and as well as be involved in scientific inventions that would ensure massive production, preservation and storage which would translate into profitability.

5. Low Level of Technology:

Agriculture is no longer limited to the old tradition; it is very broad and encompasses commerce, business, biotechnology, etc. There is a need for the people to explore and have high-tech engineering in agriculture. The Nation needs technology to boost its food production and embark on supplying modern mechanized equipment such as tractors, mill etc which local farmers can not afford as well as and training them in the new farming technology. Improved agricultural technology can be achieved by effective linkages and collective planning and execution of Research programmes by Research Institutions and Universities.

6. Storage and Processing:

The Federal Government should provide storage facilities for the farmers to eliminate wastages and losses. The farmers should be able to preserve perishable crops to enhance their earning thus availing the agro-allied industries steady supply of raw materials. By provisions of storage facilities and establishment of agro-allied small scale, medium scale industries would scale up other economic activities to make the nation self-sufficient in food production.

7. Marketing/Pricing

Access to urban markets is key to increasing incomes for rural farmers. Some aspects are crucial such as physical infrastructure, including road networks and affordable transport. Poor physical infrastructure can have far-reaching consequences on producer’s price, as poor road network usually entail exorbitant transport cost. Traders often take advantage of this crucial factor to exploit the farmers. In areas where the production volumes are small and scattered between small farms, the local traders operating on a small scale are often the only link to the markets. In a nutshell, lack of storage and processing facilities as well as high transportation cost increase the weakness of these trade networks.

Prospects :

1. Food Security: Agricultural production is central to the overall well-being of the population thereby guaranteeing sustainable food security. The Federal Government approved immediate release of N80 billion from Natural Resources Development Fund for the importation of 500,000 metric tons of rice which would be sold to the people at subsidized rates. It also approved the immediate release of 11,000 metric tons of grains from its strategic reserves in order to restrain the increasing prices of food in the country. The Government should dedicate a fund toward development of agriculture and production of food. It should also put in place measures aimed at ensuring the sustenance and enforcement of policies and regulations aimed at stimulating domestic production of food and food products. The Federal Government should change its policies on Land Act and provide land to private investors for commercial farming. The Government should adopt the strategy of Public Private Partnership which will engender the sustainability and professionalism in food production in the country. For example two states (Cross River and Taraba) in Nigeria went into partnership with an indigenous company, Notore Chemical Industry, by signing Memorandum of Understanding for establishment of Rice Mill (cultivation and Milling) in their states. This will impact positively on the people of the area by providing food, jobs and wealth.

2. Reduce reliance on oil:

Nigerians should go back and till the land with the mission of re-enacting the glorious era of 1970s when the nation’s economic mainstay was cash crops. During pre and post-independence Nigeria, before crude oil became the country’s major foreign exchange earner in the mid-70s, the agricultural sector performed satisfactorily on all parameters. Since the advent of oil, the development and harnessing of the economic potential of all exportable agricultural commodities has begun to wane. There is a need for Nigeria to brace up in order to maintain her position as the second highest producer of Arabic Gum, coming after Sudan. The country should embark on massive cultivation of the land to grow grains especially rice, corn and wheat.

3. Earning Foreign Exchange:

Nigeria produces a wide range of agricultural commodities, which could serve as raw materials for industrial production in Europe, Asia and Latin America. Top on the list of such agricultural commodities are Cocoa, Cotton, Soya beans, Cassava, Maize, Gum Arabic, Ginger, Sorghum and Sesame Seeds. With the Nigerian Government current efforts at increasing output in the agricultural sector, more volumes of agricultural produce will be available for external trade which would earn the country foreign exchange. For example, Cocoa is the second major non-oil foreign exchange earner in Nigeria. It is produced in 16 states in the country, with an annual production of 400,000 metric tons, 98% of this is exported. Annually export revenue from the sale of cocoa amount to USS136.7 Million.

3. Diversify Economy

The need to diversify the economy is long over due. Nigeria is no longer a major exporter of cocoa, palm oil, groundnuts and rubber, a development which is traceable to compendium of factors such as over-reliance on oil revenue. Oil account for 95% of Nigeria export while agricultural products such as rubber and cocoa, accounts roughly for 60% of the remainder. With the present slum in oil price, the global meltdown and the lingering Niger Delta crises, there is a need for the government to cooperate with the banks to play a crucial role in diversification drive. This is to make difference by intervening in agriculture and setting up schemes to encourage our economic diversification efforts, not only by taking the deposit and trade but to partner with their customers to impact positively on their lives.