Full Project – Impact of agricultural development on Nigerian economic growth

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CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

Agriculture is the foundation and bedrock upon which the development of stable human community has depended on throughout the whole universe such as rural and urban communities. It is concerned with the husbandry of crops and animals for food and other purpose. The study of the history of economics provides us with ample evidence that can 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 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 development.

Through its spheres of activities at both the macro and micro levels, the agricultural sector is strategically positioned to have a high multiplies and linkage effect on any nation’s quest for socio-economic and industrial development. The growth of the agricultural sector in Nigeria was not smooth. Anyanwu (1967) held that during the colonial period between 1861 to 1960, attention was given to agricultural research and extension services.

Among the activities that were done was the establishment of a research station in Lagos by Sir Claude Mc.Donald in 1893: Landmark of 10.4 km was acquired by the British Cotton Growing Association (BCGA) in 1899 for experimental purpose strictly for cotton and was named “Moor Plantation” in Ibadan. In 1912, the Department of Agriculture was established in each of the then southern and Northern Nigeria, 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 between 1929 and 1945 was a difficult one for the agricultural sector of Nigeria. This was the period of great depression when the world princes on commodities fluctuated. This affected the agricultural sector negatively because the volume of agricultural product increased but the value did not increase proportionally.

1.2       STATEMENT OF PROBLEM

The agricultural sector has suffered from years of poor management, inconsistent and poorly implemented government policies, government neglect and lack of basic infrastructure. Agriculture accounted for 30% of the GDP in 2010 (World Factbook, January 9,  2016).

Nigeria is no longer a major exporter of cocoa, groundnut, rubber and palm products. Coca production mostly from obsolete varieties and over-aged trees are stagnant at around 150,000 tones annually. There is also a decline in groundnut, palm oil and other major export crops (United States Department of State, 2005). The decline in agricultural production was largely due to the rise of oil shipments (A.B Sekumade 2009).

Because of this backdrop, agriculture has not kept up with the rapid population growth and Nigeria once a large net exporter of for now imports most of its food requirements. Dependence on oil is not only the cause of the under-development of the Nigerian agricultural sector, but also:

1. The Nigerian agriculture is characterized and surrounded by bunch of illiterate farmers who live in rural areas, producing over 90% of the total food consumed and other agricultural products and with regards to their educational status giving little or no room for improvement through scientific research.

And also more than 90% of the consumed food in Nigeria is provided by the small-scale farmers.

2. The Nigerian agriculture lacks storage facilities and these have led to so much wastage and high cost of storage. This hinders the availability of source perishable agricultural produce through the year, therefore hindering agricultural development.
3. Another negative force is Dependence on weather which affects the increase in agricultural produce.

Nigeria Agriculturists or farmers still depend on rainfall only to produce instead of the use of irrigation that supplies water all through the year.

4. The problem of finance: The agricultural sector is poorly financed in Nigeria. They do not get credit easily from financial institutions, like commercial banks. The agriculturists find it difficult to finance projects which are capital intensive. The commercial banks cannot grant loans easily to a small scale

farmer because of low produce and low profit which results to a failure in paying back the loan.

5. In addition, the dependence on imported foods has disincentive investment in local farming.

Also, soil infertility is one of the problems of agriculture in Nigerian. Most of the farmable land in Nigeria contains soil that is how to medium in productivity.

According to the food and Agricultural Organization of the United Nations (FAO), with proper management, the soil can achieve medium to good productivity. The movies problem that affects soil fertility is soil erosion. Wind erosion, strong winds expose seeding lings and crops root system by blowing away loose, fine grain soil particles in drifts, which can cover crops.

Another type of erosion that affect soil fertility is water erosion. There are two types of water erosion:

Splash erosion and rill erosion. Splash erosion occurs when rain drops impact the soil and rill erosion occurs when channels of water carry soil downstream. This (water erosion) is reduced when the soil is covered with a canopy.

6. Food processing problem is estimated that about 20 to 40% of the yearly harvest is lost during processing.

The primary cause is the lack of efficient harvesting techniques.

According to and with the information above, it is quite clear that the agricultural sector, as one of the Nigeria economy has really got a lot to contribute to the economic growth of the country.

1.3       OBJECTIVES OF THE STUDY

The broad objective of this study is to determine the impact of agricultural development on economic growth in Nigeria.

1. To determine the impact of agricultural sector on the economic growth in Nigeria.
2. To determine the effect of agricultural sector on employment creation in Nigeria

1.4       RESEARCH QUESTION

This research work therefore is aimed at answering the following questions:

(i) What is the effect of agricultural output on economic growth?

(ii) What is the effect of agricultural sector on employment creation?

1.5       STATEMENT OF HYPOTHESIS

For the purpose of this study, the following hypothesis is tested;

1. H₀: Agricultural development has no significant impact on economic growth in Nigeria.

H₁: Agricultural development has significant impact on economic growth in Nigeria.

2. H₀: Agricultural development has no significant effect on employment creation in Nigeria.

H₁: Agricultural development has significant effect on employment creation in Nigeria.

1.6       SIGNIFICANCE OF THE STUDY

The significance of this study depends on the fact that with improved economy Nigeria stands to gain in its effects toward development. This work attempts to answer the question: What is the relevance of agriculture in economic growth? The cause of agricultural backwardness and how the present state of our agricultural productivity will be improved.

This will form the basis upon which suggestions and contributions will be made as to how the full potentials of agriculture can be harnessed.

This work stands to benefit:

1. Nigeria as a whole: The research work intends to bring firth ways to increase agricultural output both for the purpose of consumption and exportation which ultimately will bring an increased favorable balance of payment (BOP) for the nation.
2. This work will be advantageous to schools (staffs and students) and will help them understand the importance of farming no matter how small the scale of production may be.

1.7       SCOPE

This research work focuses on the impact of agricultural development on the economic growth of Nigeria between the period of 1980 to 2010.

1.8       LIMITATIONS

There are some factors or constraints which hinder my achieving the whole intension of this work, these constraints are; time factor, poor finance, environmental constraints like free movement to research outside the school premises etc.

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Full Project – Impact of agricultural development on Nigerian economic growth