AGRICULTURE SECTOR

Historically, Agriculture has a long-standing role in Nigeria’s economy and is the most
significant contributor to overall GDP. The sector is also the mainstay of Nigeria’s rural
economy, since the early 1960s. Nigeria’s agriculture sector has the potential to be a key driver
of growth, wealth creation and employment. Also, Agriculture sector has been the contributing
factor to the real GDP of Nigeria and the backbone of economic activity in Nigeria this is
because agriculture has some value chain with other sectors such as the Industrial sector,
manufacturing sector, health sector among others. Agriculture contributes about 60%-70% to
the real GDP, 75% of the country’s foreign exchange earnings and an impressive 65% to
employment opportunities.

Agriculture sector is a branch of the economy in Nigeria that deals with the cultivation of
land, planting of crops and rearing of animals for man’s use. The agriculture sector is further
classified into 4 subsectors: crop production, livestock, forestry and fishing. Therefore, the
contribution of the agriculture sector to the economic development of Nigeria can be examined
as thus,

1) Contribution of economic welfare: food production is the basic sustenance of

economic welfare. Highlighting the importance of food provision and food security,
this is the first goal of SDG 2030 and agriculture is the key driver to achieving this
goal. Through the practice of agriculture, there is enough food that offers balanced diet
and healthy feeding in children, pregnant mothers and households. Therefore, the
issues of hunger, food security, malnutrition are largely addressed in order to promote
economic welfare that is geared towards economic development.
2) Contribution to the gross domestic product of Nigeria: in 2019, agriculture sector
contributed 29.25% to the overall real GDP following the oil glut of 1970s-1980s.
Over the years, agriculture contributes on quarter to the GDP, 1950 (63%), 1960
(54%), 1970 (29.2%), 1980 (33.3%), 1990 (20%). The period before the oil glut
marked an increased production of agriculture products for agriculture product for
human consumption, trade, commerce and foreign earnings in Nigerian economy.
3) Contribution to foreign exchange earnings: over the years, the agriculture product is
categorised into two main groups: food crop and cash crops. Emphasis was largely
placed on cash crops because it was traded for profit and used for exports. The
agriculture products used for export such as cocoa, groundnut, palm oil kernel, cashew
 nut, timber and rubber were means of international trade among nation as Nigeria
became a net exporter because of its factor abundance. This further increased the
saving capacity and investment level of the economy which further contributed 65%
of foreign reserve to the capital account of Nigeria.
4) Contribution to employment opportunities: the agriculture sector provides 30% of
employment opportunities from 2012-til date. Therefore, agriculture is not only
significant in Nigeria because of the ability of the sector to serve as the backbone in
providing food to Nigeria’s population but also, it is significant because it is the major
employer of labour. Labour will be transferred from the agricultural to non-agricultural
sector. The labour transfer could only take place if we have a high production in the
agricultural sector.

FACTORS RESPONSIBLE FOR THE POOR PERFORMANCE OF AGRICULTURAL

SECTOR

i. The use of crude implements versus modernized agriculture tools: Most farmers are
not well educated in Nigeria. These farmers are more familiar to the use of primitive
tools and can not use the mechanised methods of farming. The illiteracy of farmers on
the use of mechanised system of farming largely contributes to the lack of incentives
on loans made available to them. This will further induce a declined in the number of
available farmers which will translate to reduced outputs of the agricultural sectors.
This is the reason Nigeria has become a net importer of the product it could produce
abundantly. However, there is a proffered solution.
• Government must be willing to increase the tax benefits and tax reliefs imposed
on the agricultural sector.
• Government should regulate the amount of interest rate charged on loan to the
agricultural sectors.
• Government should organize training programmes to enlighten the rural
farmers on the importance and techniques of mechanized farming.
• Government should increase the number of machineries in Nigeria.
ii. The discovery and exploration of oil: The emergence of oil has necessitated the
underutilization of natural resources, negative externalities and shift from the
agriculture activities. The oil extraction (offshore and onshore oil activities) has
resulted into land pollution and as such the soil nutrients have become weak to enhance
the growth of crops. Therefore, there will be heavy dependence on food importation,
 environmental degradation, poor soil nutrients because the lands used for growing
crops are not fertile.
iii. Uneven distribution of rainfall in some parts of the country: Rainfall in Nigeria is not
evenly distributed. It is quite evident that some parts of the country such as the Northen
part of the country experience low rainfall when compared to the southern part that
experience more rainfall annually. Agricultural products need the supply of rainfall
and photosynthesis (sunlight) to grow effectively. However, the supply of low rainfall
to the Northen part of Nigeria has necessitated farmers to resort to the artificial supply
of irrigation that is quite expensive which causes financial strain to the farmers.
However, there is a possible solution to this problem.
• Government should put in effort to encourage the cost of irrigation is cheap in
those places low rainfall is experienced annually.
• Government should encourage the need to growing those crops specific to an
ecological zone in other zones.
iv. Disease outbreak and pest infestation: Pest is injurious to crops. The incidence of pest
and disease outbreaks brings about foo insecurity, low nutrients in crops, unending
death of livestock and reduced national income. However, there is a proffered solution
to this problem.
• Government should endorse afforestation programmes.
• Government should ensure that pesticides are available and cheap for farmers.
• Government should ensure that the perishable items are transported to the
market before spoilage.
v. Inconsistencies of government policies and programmes: Policies are set laws and
regulations implemented by the government to enhance agricultural produce within a
country such as land use regulations, trade barriers, subsidies, research and
development. Inconsistencies in government policies will hinder the efficient
performance of the agricultural sectors as regards planning and investments,
ineffective resource allocation, technology and innovation.
vi. Various constraints to land ownership and use as the land tenure system places
significant constraints on the achievement of efficient agricultural production and
physical development. However, there is a preferred solution
• Government should provide adequate lands to the farmers.
• Government should reduce the cost of lands
 • Government should subsidize the land rents available to farmers.
vii. Fluctuation in the prices of agricultural produce.
viii. Inadequate storage facilities for agriculture produce.

STRATEGIES TO REVAMP THE AGRICULTURAL SECTOR

Increase food Production.

Diversify Foreign Exchange Earnings.

Employment Opportunities.

POLICY MEASURES ADOPTED TO ENHANCE THE PRODUCTIVITY OF THE

AGRICULTURE SECTOR.

i. Price Incentives (price floor and price ceiling) The government should give some price
incentives by way of guaranteed minimum prices to producers. Such prices should be
kept under constant review and the administration would be improved to ensure that
the desired purpose is achieved.
ii. Government Direct Involvement: Government should be involved directly in the
production of agricultural products. This is to be done through the establishment of
food production companies, through equity holding in purely commercial joint
ventures with the private sector.
iii. Credit Facilities Efforts should be made to expand credit facilities to the fanners. Short
and medium-capital would be made available to farmers through the Agricultural and
Cooperative Banks and the Agricultural Credit Guarantee Scheme. Furthermore, the
state Agricultural Corporations would be strengthened to enable them to perform their
functions more efficiently and effectively.
iv. Agro-Allied Industries Agricultural processing would be intensified by the setting up
of agro-allied industries, farmers would obtain higher and steady prices for their
products since middlemen would be eliminated.