The Role of Agriculture in the Nigerian Economy

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In this chapter of the research work, the review of related literature is presented under the following heading:

□ Role of Agriculture in an Economy

□ Importance of Agriculture

□ Analysis of Selected Indicators of Agricultural Growth

□ Agricultural Constraints

□ Institutional Reforms

□ Major agricultural policies in Nigeria from 1960-2005

□ Macro-economic variables affecting economic growth

□ Government expenditure

□ Investment

□ Foreign investment

□ The new Nigerian Agricultural Policy

2.0The role of agriculture in an economy
It is important to first define the term-Agriculture before talking about the role of agriculture in the economy. Oxford (2000) defines agriculture as the science or practise of farming. Anyanwu (1997) noted that agriculture “involves the cultivation of land, raising and rearing of animals for the purpose of production of food for man, feed for animals and raw materials for industries. It involves cropping, live–stock, forestry, and fishing, processing and marketing of these agricultural products”. Abayomi (1997), like many other economists opined that “in most developing countries, agriculture is both the main traditional pursuit and the key to sustained growth of the modern economy. She noted that economic growth has gone hand in hand with agricultural progress; stagnation in agriculture is the principal explanation for poor economic performance, while rising agricultural productivity has been the most important concomitant of successful industrialization. Among the roles conventionally ascribed to the agricultural sector in a growing economy are those of: providing adequate food for an increasing population; supplying raw materials to a growing industrial sector; constituting the major source of employment; earning foreign exchange through commodity exports, and providing market for the products of the industrial sector”. Myrdal (1986) notes that, “it is in the agricultural sector that the battle for long term economic development will be won or lost”. This assertion has been supported by both historical and contemporary development experience. Reynolds (1975) stated that agricultural development can promote economic development of the underdeveloped countries in four distinct ways:- i) By increasing the supply of food available for domestic consumption and releasing the labour needed for industrial employment; ii) By enlarging the size of the domestic market for the manufacturing sector; iii) By increasing the supply of domestic savings; s

iv) By providing the foreign exchange earned by agricultural exports Riemenschneider (2003) stated that at the most basic level, agriculture’s essential role is to provide adequate output to assure global food security. Without adequate food, people cannot work and earn, they cannot learn, and they are more susceptible to disease. Overall, their economic prospects are dim. Following these criteria, Anyanwu et al (1997), noted that Nigerian agriculture has in recent years not been able to meet the food needs of the country. Rather, food production per capita has been declining. To complement the low domestically produced food supply; there has been a substantial rise in food imports. These have taken substantial portions of the much needed foreign exchange for importing capital for development purposes. Available data revealed that average food imports have accounted for about 9.15% of total imports over the period between 1960 and 1993. Nigerian’s quick turn from a low food importing to a high food importing country with food bill accounting for 14.71% of 1991’s total import bill compared with 6.87 percent in 1970 was a sign of collapse of the agricultural sector. Anyanwu et al noted that this situation does not augur well for the Nigerian economy especially when we realized that there are available...
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