ABSTRACT
This research work critically focused on the roles of
government expenditure in the agricultural production in Nigeria for the period
1970 to 2010. Data on relevant variables
were collected from the statistics Bulletin of the Central Bank of
Nigeria. A functional relationship
between Agricultural output and other explanatory variables, of which
government expenditure is one, was specified and estimated using the OLS method
and multiple regression analysis. It was
found that adjusted R2 for the relationship was 85% and also that
government expenditure has played a positive role in the development of the
agricultural sector. Other major
findings made were that the rate of inflation was very low throughout the
period and did not cause much impact with regards to low productivity. The amount of rainfall during the period was
very low and does not have any significant effect on agricultural output. Another observation was that the rising
prices of agricultural products brought about increase in the performance of
the sector, as more people were attracted to it. Again, low interest rate was an encouragement
for investors to invest more on agricultural product.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The socio-economic
development of any nation is usually dependent on many factors, which combine
to ensure the successful attainment of set development goals. One of such factors is agriculture. Its discovery dates back to 800 BC period
regarded as the new Stone Age, when man began to till soil and grow crops using
crude implements made out of stone (Anderson ,
1995). According to Maslow, 1954, food
is one of the physiological needs of man, which must be satisfied before other
needs could be attained. Supporting
Maslow’s assertion, Morgan and Henson (1085) argue that agriculture will remain
an indispensable factor until the end of human existence.
The importance of
agriculture in the socio-economic development of every nation has made many
countries of the world (i.e. developed and developing) to place more emphasis
on its development. This is evident in
the number of programmes that have been introduced by both international
agencies and individual countries to ensure improvement in agricultural
activities. In Nigeria for
instance, successive governments have introduced and implemented programmes in
this regard. Such programmes include
Operation Feed the Nation (O.F.N.), Agricultural Research Policy, Agricultural
Development Project, Agricultural Credit Government Scheme, The Green
Revolution, River Basin Development Authorities (RBDA), National Agriculture
Land Development, Nigeria Agricultural and Co-operative Bank (NACB), The
Structural Adjustment Programme (SAP), Directorate of Food, Roads and rural
Infrastructure (DFRRI), (Anyanwu, 1960-1997).
It is however, disheartening that despite the laudable nature of these
programmes and the huge financial resource expended on them, their impact on
the economy remains as infinitesimal.
However, the problem,
which the Nigeria
agricultural sector suffers till date, could be traced to the discovery of
crude oil. The discovery of crude oil
deposit in various parts of the country in commercial quantities in mid 1960’s
coupled with the oil boom of 1974 as a result of the America , affected adversely the
agricultural sector. The economy
therefore, became heavily dependent on oil.
For instance, oil sector provides 20% of GDP, 95% of foreign exchange
earnings, about 85% of total export and 65% of budgetary revenue (Anyanwu,
1997).
Agricultural
contributions to the economy were instrumental in sustaining economic growth
and stability, stable growth in agricultural exports was the backbone of
favourable balance of trade. Primary
processing of raw materials from the agricultural sector hence helped in the
sectors through the imposition of taxes and accumulation of marketing surpluses,
which were used to finance many development project.
Agricultural sector
notwithstanding is more else degenerating to a type of peasant agriculture,
which is caught in vicious cycle of poverty where destination caused by low
income, and disguised employment lends to poor saving and little investment in
technology. This therefore, calls for
the attention of the government for the development of the sector. The development of agricultural sector is one
of the crucial requirement for moving the economy forward. This study therefore, tends to investigate
government expenditure on agricultural production in Nigeria and how to increase its
productivity and role in the economy.
1.2 OBJECTIVE
OF THE STUDY
The broad objective of
this study is to analyze the relationship between government expenditure and
agricultural production in Nigeria ,
the specific:
i.
To
identify the problem of agricultural financing in Nigeria .
ii.
Proffer
policy recommendations on how to improve agricultural sector in Nigeria .
iii.
To
determine the effectiveness of government expenditure on agricultural
production in the Nigeria
economy.
1.3 STATEMENT
OF PROBLEM
In recent years,
especially since the inception of the present democratic government in Nigeria , the
agricultural sector of the economy has continued to perform below expectation
despite the huge sums of money being allocated to the sector in each year’s
budget. In 2002, about N9.874 billion
was mapped out for the sector. In the
same 2002, over 72 million dollars donated by Food Agricultural Organization
(FAO) was distributed to the 36 states of the federation in addition to that
year’s allocation. According to Iheagu
(2002) the money cannot be said to have a justifiable use. Rather, what one sees is the prevalent “Lack
Luster” attitude of government to the total execution of the programme. He said that every thing is one side with
increasing number of jobless youths roaming about. He also pointed out that across the state of
the federation, warning signals are booming on the possibility of a butcher
National Food Security programme, which may result in a situation similar to
what are being continued on daily basis by price of food item in the market and
the crude system of farming being practiced in the country. The situation raises questions as to the
effectiveness of the various agricultural programmes in the country, thereby
making it necessary and imperative to examine the effectiveness of government
expenditure on agricultural production in the Nigeria economy.
1.4 SIGNIFICANCE
OF THE STUDY
The study is
significant because it will help resolve the issue of the need for the federal
government to finance and boast the sector and provide agencies for monitoring
and maintenance of policies periodically for significant growth and development
of the economy. Also, it will help resolve
the serious attention as well as raw materials for infant industries in the
country.
1.5 SCOPE
OF STUDY
This study is designed
to assess the impact of government expenditure on agricultural development in Nigeria (1970 –
2010). This study will also examine the
performance made by agriculture to the development of the economy over the
years as stipulated above.
1.6. STATEMENT
OF HYPOTHESES
Ho: Government expenditure in agricultural sector will not lead to
agricultural development in Nigeria .
VS
Hi: Government
expenditure in agricultural sector will lead to agricultural development in Nigeria .
1.7 LIMITATION OF STUDY
This
work did not go all that economy, the problem of the allocation of time between
the research study and other academic work was a serious limitation because the
two activities went on simultaneously.
Another major limitation was the one due to financial constraints to
fund all the aspects of the work.
1.8 DEFINITION
OF TERMS
Some of the terms that
will be used due to their involvement are as follows:
AGRICULTURE: This is used in this study,
as the cultivation of land resources, raising and rearing of animals for the
purpose of food, feed and raw materials production for man, animal and
industrial use respectively.
FARMER: This literally serves as a collective
designation given to those who found themselves in the agricultural field
either as cultivation or harvesters.
INDUSTRY: This as used refers to the
various institutions engaged in the production of either secondary or final
goods for economic purpose, using agricultural output.
BOOM: This simply means
sudden increase in trade activities especially when money is being made
quickly.
PRODUCTION: This is the act of making goods
and services available to the public.
REFERENCES
Anyanwu, J.C. (1960). The structure of the Nigerian Economy. Onitsha, Joanne Education Publishers.
Anyanwu (1997).
Economists of Institution in Economic Policy Making in Nigeria. A Paper presented at the one-day seminar of
the Nigerian Economic Society on “why have Economic Policies failed in Nigeria , Lagos
Brain
(1998). “Nigeria During and After Oil Boom”. World Bank Economic Research, Vol. 1, No. 3,
pp. 420 – 466.
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