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PROJECT TOPIC AND MATERIAL ON ECONOMETRIC STUDY ON THE DETERMINANTS OF AGRICULTURAL SUSTAINABILITY IN NIGERIA (1970-2017)
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- Name:ECONOMETRIC STUDY ON THE DETERMINANTS OF AGRICULTURAL SUSTAINABILITY IN NIGERIA (1970-2017)
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Nigeria is a vast agricultural country, endowed with substantial natural resources which include: 68 million hectares of arable land, fresh water resources covering about 12.6 million hectares, 960 km of coastline and an ecological diversity which enables the country to produce a wide variety of crops and livestock, forestry and fisheries products. Available statistics show that agriculture is the most important Nigerian economic sector in terms of its contribution to the GDP, after oil. The sector contributes about 41% of the country’s GDP, employs about 65% of the total population and provides employment to about 80% of the rural population. Despite the articulation of government policies, strategies and programs and the commitment of Government and donors to the broader framework of sustainable agriculture and pro-poor rural development, the rural economies of Nigeria remain underdeveloped and many complex issues regarding the design, implementation, and monitoring and evaluation remain unresolved.
The main concern of this study therefore is that while agriculture remains dominant in the Nigerian economy, it is unsustainable; the food supply does not provide adequate nutrients at affordable prices for the average citizen. The findings and the conclusion of the study suggested the need for the policy makers to promote agriculture to a sustainable level.
1 BACKGROUND TO THE STUDY
Sustainable agriculture ensures adequate food security for the ever increasing population. Food production and adequate access to food are issues of top priority at major conferences and seminars in academic and professional gatherings all over the world.
The goal of achieving and maintaining sustainable farming systems is rapidly becoming a top priority of agricultural and environmental protection policies in most developing countries. Also, the growth of ‘the community’ as a major focus of development, through which improved collective agricultural action can take place, has spread rapidly through development ideology since 1970s. In these developing countries, decision planners and field workers are faced with bewildering dilemmas; how to increase yields without degrading soil and water resources, how to meet production targets in the light of escalating farm input costs and foreign exchange shortages, how to raise productivity of the small farm sector, how to narrow the gap between incomes in farming and other sectors (Whiteside, 1998).
In addition to these dilemmas, intensive agricultural research and delivery systems have performed disappointingly low in the least developed countries, particularly those of the sub-Saharan Africa for example Nigeria, Ghana, Cameroon, etc. This is in sharp contrast to some other developing countries in Asia and Latin America where there has been a degree of success, especially ‘Green Revolution’ technology, from international research centres and popularizing same in agricultural favoured areas (that is, those with favourable production potential and reasonably good market access). But even in these countries, little has been achieved in risk prone environments (that is, those which rely on rain fed crops, have harsh environments with uncertain rainfall, and poor physical and social infrastructure), and little has been done to address problems that impact directly on disadvantaged farming communities. In the African perspective, particularly in Nigeria, these small holder agriculturists may not bring about the much trumpeted agricultural revolution in terms of the teeming millions to feed and the produce to meet up industrial needs. Surprisingly, the situation is different and is on a very positive note in the Asian continent. According to Kydd (2002), “in the last half-century, across the globe, small holder development has achieved some huge success. The South Asian Green Revolution, a process which started three decades ago, made a direct impact on poverty and a strategic contribution to wider processes of economic development. Likewise, the three decades of high productivity growth of Chinese small holder agriculture, following the phased introduction of market incentives, has been at the realm of China’s impressive record in poverty reduction, at least in its earlier stages”.
The bitter truth about the recurring failure in agricultural revolution has its origin in the political rivalry in the country which eventually culminated into the civil war of 1967 – 1970. The urge to survive the onslaught of the “Biafrans” made the Federal Government under General Yakubu Gowon to aggressively look for additional means of financing the war. Increased oil prospecting was now seen as a way out to the detriment of steady growth and development of agriculture up till mid 60’s. Nigeria is yet to recover from the peril of this oil boom which has made it increasingly impossible to feed as food importation up till this moment is heavily relied upon.
1.2 STATEMENT OF THE PROBLEM
This study was informed by the declining food production in Nigeria. Food production in Nigeria no longer keep with population growth. Thus creating a wide gap between the demand and supply of food (Abdulrahaman, 2013). This is evident in the observed food deficit and the upward trend in the price of food stuff in the market over the years (Igwe and Esonwune, 2011; African Development Fund, 2005; CBN, 2002). The resulting effect of this imbalance between demand for and supply of food is malnutrition, poverty and deteriorating living conditions (Igwe and Esonwune, 2011; Nadozie and Ibe, 2000; Eze, 2009). Against this background, the growth of Nigeria economy with reference to agriculture has been import driven rather production driven. Consequently, there is a growing advocacy for improving Nigeria agricultural production so as to achieve sustainable food security. According to Eze (2009) a lot of effort has been directed at finding appropriate institutions for organizing millions of small scale farmers towards achieving food security (through increased food production) and agricultural cooperative society has been described as the appropriate vehicle for harnessing and polling the resources of millions of small holder farmers and producers together to enjoy the benefit of large scale production.
The agricultural sector in Nigeria, (Daramola, 2004) is made up of forestry, livestock, fishing, food and cash crops such as yams, cassava, maize, cocoa, groundnut and oil palm. The country is largely endowed with natural resources that are necessary for the development of agriculture. Such resources include abundant land supply, human and forestry resources. The country has a total land area of about 98.3 million hectares out of which 71.2 million hectares (72.4%) are cultivable but only 34.2 million hectares (34.8%) are under use. According to Bakare (2013) and African Development Fund (2005), rural Nigeria is divided into seven agro-ecological zones; i.e. semi-arid, found only in the northern region; the savannah, found in the northern and middle region; a small highland area found in the middle and southern region; a larger transition environment of savannah derived from the forest overlapping the southern and middle regions; mangroves in the Niger Delta; freshwater swamps in the Niger Delta and Lowland rain forest in the south. The agro-ecological setting and technology base, in principle, determine the production systems. Two major production systems dominate these zones: (i) the traditional production system, which is found in all parts of the country and consists of land holdings of less than 2 hectares (Obinyan, 2000) with a variety of food crops intended for consumption purposes mainly and (ii) the improved irrigation production system which comprises the improved small scale irrigation using low-lying or water logged areas for crop and livestock production as well as large-scale mechanized and/or commercial irrigation farming systems.
A number of studies have indicated that agricultural production in Nigeria is still characterized by small farm holders (Onugu,2008; Obinyan,2000; Ijere and Mbanasor,2000). Perceptibly, the socioeconomic characteristics of the
small farm holders have crucial ramification on agricultural production. Food production could be affected by the farmers’ age, access to credit, gender, farm size, educational level, farming experience etc. it is on record that 50% of world’s population is dependent on subsistence agriculture (Guy, 2001; Obinyan, 2000; Olujenyo, n.d;). Considering the prime importance of agricultural production to achieving food security and its crucial role in the nations socioeconomic transformation in terms of its contribution to the GDP and the fact that domestic supply has not been able to meet up with domestic demand, there is therefore the need to examine those socioeconomic factors that influence agricultural production so as to step up food supply.
1.3 OBJECTIVES OF THE STUDY
The major objective of this study is to profer adequate solutions to the instability in agricultural production in Nigeria. A critical look will be taken at the agricultural sector. Observations will be made from the research which will eventually lead to solutions to the problems facing the sustainability of the agricultural sector.
1.4 RESEARCH QUESTIONS
The study will therefore conclude on defining an appropriate institutional policy framework for the effective and sustainable development of Nigeria’s agriculture that is consistent with international standard. Consequent upon the foregoing, the study shall test the following hypotheses:
1.5 WORKING HYPOTHESIS
H0: Agriculture is not sustainable in Nigeria
H0: Sustainable agriculture will not develop the Nigerian economy
1.6 JUSTIFICATION OF THE STUDY
This study is motivated by the important position of sustainable agricultural production in the Nigerian economy. Agriculture not only serves as an important food provider to the citizens of Nigeria but also a source of revenue to both farm households and the nation at large. Nigeria has a great potential for better economic growth both in the short and long run than is currently experienced through increased agricultural production. Therefore, the need to efficiently allocate productive resources for development purposes cannot be overstressed. In that case, every resource should be efficiently and effectively mobilized to reduce the gap between actual and potential national output. But most importantly is to ensure that the nation’s concerted effort to improving agricultural technology is remunerated with sufficient gains in food security and economic growth since technologies are developed, disseminated and adopted at a cost. Given the comparative nature of this study, the outcome in terms of the consistency or otherwise of the results will form a basis for policy recommendations. Thus, the study will contribute to literature on economic efficiency in the context of appropriate analytical methodology to employ. Measurement of efficiency is justified for a number of reasons: firstly, it is an indicator of performance measure by which production units are evaluated, thus indicating the potentials there is to improve productivity and household welfare by improving efficiency. Therefore, knowledge of production efficiency will assist policy makers to identify which farmers need support most, thus assisting in better targeting and priority setting.
Secondly, measurement of causes of inefficiency makes it possible to explore the sources of efficiency differentials and elimination of causes of inefficiency. Finally, identification of sources of inefficiency indicates which aspect of the farm’s physical and human resources need to be targeted by public investment to improve performance.
This study is further justified, as it will help the research and extension agents to know specifically the various problems faced by the farmers and how best to ensure that their production potentials are realized by facilitating technology generation and diffusion thus reducing production inefficiencies. The farmers themselves will also benefit from this study as the revelation of their true situation could attract more favourable policies to them, which will help in improving their access to the modern technologies and thus increasing their productivity and efficiency. As there is a dearth of empirical work explicitly linking efficiency and agricultural technologies, this study will therefore contribute to the existing literatures not simply by testing the difference in the mean efficiency of users and non-users of improved technologies but also by determining the direction and magnitude of impact of such adoption decisions on farmers’ technical, allocative and cost efficiency and also the sensitivity of such impact to different methodological approach. Finally, the building of an integrated model will serve as an important tool to production economists and agricultural policy analysts as this is expected to ease the problem of model selection for efficiency and policy analysis.
1.7 SCOPE OF THE STUDY
This study covers the entire geographical area of Nigeria. Nigeria is located in the western part of the African continent. Nigeria is a vast agricultural country, endowed with substantial natural resources which include: 68 million hectares of arable land, fresh water resources covering about 12.6 million hectares, 960 km of coastline and an ecological diversity which enables the country to produce a wide variety of crops and livestock, forestry and fisheries products. Over the years, Nigeria has been considered as the giant of Africa due to its vast economy and large populace (which entails large work force). This study puts Nigeria as the fore-front in the study of the determinants of agricultural sustainability.
1.8 STUDY ORGANIZATION
The study is organized into six chapters. Chapter two presents a review of the Nigerian economy and also looks at the agricultural sector review. Chapter three gives a detailed account of theoretical and empirical issues relating to technical, allocative and cost efficiency. In chapter three, the review of empirical studies is limited to comparative studies in agriculture, comparative studies in other sectors that employed distance functions in efficiency analysis and efficiency studies in Nigerian agriculture. This is because of the large volume of theoretical and empirical literature in the field of efficiency measurement and it will help in giving the study a proper focus. The analytical framework and empirical specifications for the alternative approaches are also discussed in chapter three. Chapter four comprises of the research techniques, model specification, estimation procedure, evaluation method and data sources and collection. The empirical results and analysis, model results presentation, statistical tests of significance, econometric diagnostic testing, working hypothesis evaluation, reported results implication are embodied in chapter five. The final chapter (chapter six) gives details on the summary of findings, policy recommendation, study limitations, further research indications, bibliography, and appendix.
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