Agriculture remains a major driver of economic growth in Nigeria. It
is composed of four sub-sectors-- arable crops (including food crops), forestry
(including tree crops), livestock (including poultry) and fishery. Agriculture
contributed 41.5 per cent to GDP in 2008. The sector has continued its
dominance in the economy, in terms of its size and contributions to the GOP.
Recent Developments
Various recent programmes, that have been adopted to improve
agriculture and rural development, include the Special Programme for Food
Security (SPFS), the Fadama II Programme, the Fertilizer Revolving Fund (FRF),
the Presidential Initiatives on Cassava, Rice, Vegetable Oil, Tree Crops and
Livestock, the restructuring and recapitalization of the Nigerian Agricultural,
Cooperative and Rural Development Bank (NACRDB).
Other complementary policies and programmes implemented in the recent
past include Value Added Tax Exemption
for locally produced agricultural inputs such as fertilizer and simple
fabricated machines. In order to strengthen agricultural production, market
information and outlets, storage and processing facilities, among others, were
established in 2004.
Also, three agricultural development and marketing companies- the Tree
Crops Development and Marketing Company, the Livestock Development and
Marketing Company and the Arable Crops Development and Marketing Company -were
established. To stimulate export promotion, an export subsidy of 10 per cent
was introduced in 2003. The Central Bank of Nigeria (CBN) also adopted new
strategies on credit delivery, the Trust Fund Model (TFM) which reduced the
risks faced by banks in agricultural lending.
As a result of all these, the sector was able to make significant
progress in recent times. Specifically, annual production of cassava increased
from 33 million metric tonnes in 1999 to 49.0 million metric tonnes in 2006
while output of rice increased from 3.3 million metric tonnes to 4.2 million
metric tonnes during the same period. In order to curb post harvest losses and
protect the gains of increased production, silo storage capacity across the
country was increased to one million metric tonnes with the recent completion
of four additional silo complexes. The presidential initiatives in other areas
such as livestock production, fisheries, and economic trees are also helping to
increase production significantly and create employment in these areas.
However, despite the impressive performance, productivity in the
sector has remained low when compared with global average. Over the last 20
years, value added per capita in agriculture has risen by less than one per
cent annually, with the resultant effect of rising food and raw materials
import bills and declining levels of food self sufficiency. Nigeria presently
spends about $3 billion annually on the importation of a few food commodities
including rice, sugar, milk and fish, despite favourable agricultural and
ecological climatic conditions.
This has continued to undermine the needed expansion and growth in the
agricultural resource based industries expected to absorb the high labour force
and boost foreign exchange earnings. Sectoral plans and programmes have been
designed to grow the agriculture sector at the rate of 10 per cent annually.
Government is also investing heavily in several projects across the entire
agricultural value chain, such as improving the availability and delivery of
appropriate inputs, commercial agriculture development programme, enhancing
storage facilities, creating an enabling environment that is conducive for high
agricultural growth, promoting inter-sectoral linkages as well as promoting
private sector involvement in agriculture.
Issues and Challenges
Low productivity
There is an inverse relationship between growth in the area of
cultivated land and yields for virtually all crops. Crop yields in the country
are lower than most other countries, both in food and cash crop and animal
husbandry. Many factors are responsible for the low productivity in the sector.
These include, ineffective extension and advisory services, low adoption of
improved seeds, poor quality inputs and inefficient weak input distribution
system, low levels of mechanization and irrigation facilities, poor access to
credit, poorly managed soil fertility profile, ageing farming population as a
result of rural-urban migration by the youths, high drudgery (physical effort
per output), unattractive environment and poor morale among farmers.
Low Level of Private Sector investments
Organised private sector investment in agriculture, both in primary
production as well as processing (value added), is currently low. Factors
contributing to the low level of investment include; high risk of investment
partly owing to policy inconsistency and partly due to the very nature of agriculture
itself, low investor confidence in the sector, high production cost, insecurity
of land tenure, inadequate institutional and infrastructural support (roads,
national railway network, electricity, and storage facilities), inadequate
access to the use of business credit, unfavourable business climate and high
cost of doing business.
Non-Competitiveness
As currently managed, the sector cannot profitably compete in the
international markets. This non-competitiveness can be attributed to several
factors, including: high cost of marketing, high production cost structure,
limited commodity processing to enhance shelf life, transportation to trade
points, high exchange rates, difficulty in accessing regional and global
markets, domestic policy-related obstacles that discriminate against export and
price competing products.
Weak Domestic polices and Institutions
Successive governments have formulated and implemented conflicting
policies to support agricultural production, and, these policies have changed
frequently with changes in political leadership. Instability in policy regime
had constrained agricultural growth because it had prevented sustained
commitment to a coherent, integrated agricultural development. The loose policy
framework does not encourage stability in import-export of certain crucial
items (either as raw materials or finished products) such as textiles,
vegetables oils, etc.
Inadequate Funding
Inadequate and untimely funding of agriculture by the public sector
coupled with inefficient and/ or ineffective application of such funds
(budgetary or otherwise) also constitute bottlenecks to agricultural
productivity and development.
Land Ownership and Tenure
Incentives to invest in agriculture are undermined by
policies regarding land ownership and land tenure. Individual and public
ownership of land are often implemented side-by-side, and rather than seek
allocations from the local government, people acquire access by a variety of
informal means. The Land Use Act does not recognize such informal land
ownership contracts, hence most of these are not legally secured. This,
therefore, constrains the expansion of agricultural farms and also serves as a
disincentive to making long-term improvements on the land.
Other challenges includes
- Persistent drift of population from rural to urban areas
- Weak linkage to agro-industrial sector resulting in wastages of surpluses, and low prices during harvest period;
- Poor research co-ordination and weak linkage between research and extension;
- Absence of soil test when determining what type of fertilizer to use;
- Persistent problems of access to credit particularly in the rural level;
- Ageing farming population and low return to investment which makes agriculture less attractive to youths;
- Continued reliance on rudimentary tools and cultural practices;
- Poor state of rural infrastructure, especially roads, resulting in increased costs of farming operations and transportation of produce;
- Problem of development of appropriate farm implement and poor technology transfer.
- Weak marketing structure;
- Poor data for planning purposes arising from inadequate collaboration among the Ministries of Agriculture and Water Resources, National Bureau of Statistics, and other stakeholders.
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