A STUDY OF THE IMPACT OF AGRICULTURAL MARKETING ON NIGERIA’S ECONOMY

A STUDY OF THE IMPACT OF AGRICULTURAL MARKETING ON NIGERIA’S ECONOMY 
(A CASE STUDY OF FEDERAL MINISTRY OF AGRICULTURE, ABUJA) 

ABSTRACT

This research work was carried out critically to know the impact of agricultural marketing on Nigeria’s economy and how the government can aid the agricultural sector to improve development in the country. The research work comprises of five chapters. Chapter one consist of introduction of the subject matter, the historical background of the study,, significance of the study, limitation of the study, the scope of the study and the definition of some terminologies used in the project. Chapter two is the literature review including concept of agricultural marketing, definition of agricultural marketing, growth of agricultural marketing, the role of farmers in Agricultural marketing, difference between the marketing of agricultural products and manufactured goods, the nature of demand and supply of agricultural products, the effect of government policies on demand and supply of agricultural products, problems  of agricultural marketing in Nigeria and the impact of Agricultural marketing on Nigeria’s economy. Chapter three deals with research design and methodology, source of data collection, population size determination, sample size determination, research instrument, questionnaire design and method of data distribution and collection, chapter four reviews the data presentation and analysis, test of hypothesis and research findings, finally, chapter five which consist of summary, conclusion and recommendations.

 

CHAPTER ONE

1.0     INTRODUCTION

Agriculture remains the mainstay of the Nigeria economy despite its decline in the 1970s. Greater proportions depend on the agricultural sector for their livelihood and the rural economy is still basically agricultural. The role of the agricultural sector in the overall response of the Nigerian economy to reform and adjustment policies is important because given its relatively large size, a large positive response to adjustment policies was expected as means of improving the overall performance of the economy.

According to ‘economists’, Nigeria displays the characteristics of a dual economy, a modern sector heavily dependent on oil earning overlays a traditional agricultural and trading economy. During the colonial era, cash crops were introduced, harbours, railways and roads were developed, and a market for consumer goods began to emerge. At independence in 1960 agriculture accounted for well over half of our gross domestic product (GDP), and was the main source of export earnings and public revenue, with the agricultural marketing boards playing a leading role, but today this leading role in the economy has been taken over by the national oil company, the Nigerian National Petroleum Company (NNPC).

According to the Central Bank of Nigeria’s data (2003), oil still account for our major revenue (gearing towards 80%) and almost 100% of our export earnings. Although agriculture (particularly forestry, livestock and fishing) is shown to serve as the major activity of the majority of Nigerians it is clear that we indulge in agriculture purely as personal survival strategies rather than as a calculated effort to warming the engine of our country’s economy. This is really where our national economic problems lie.

Well-functioning marketing systems necessitates a strong private sector backed up by appropriate policy and legislative frameworks and effective government support services. Such services can include provision of market infrastructure, supply of market information and agricultural extension services able to advice farmers on marketing. Training in marketing at a levels is also needed. One of the problems faced by agricultural marketing in Nigeria is the hidden hostility to the private sector and the lack of understanding of the role of the intermediary. Apart from this, Agricultural marketing is faced with many challenges ranging from limited access to the market information, low literacy level among farmers, poor storage facilities among others.

Agricultural marketing cannot be effective to Nigerian economy unless Nigerian government summons courage to invest and exploit its rich agricultural sector, provide loans to the farmers at low rate of interest so that they will be free from the clutches of local money lenders who squeeze them, build good storage facilities in other to provide it as at when needed. This will go a long way in enhancing agricultural marketing and developing Nigeria economy.

This research work is carried out to examine how agricultural marketing will boost the economic situation of Nigeria with proper attention in the agricultural sector.

1.1     STUDY BACKGROUND

Nigeria’s growth experience shows a general and steady performance in the immediate post-independence period with a healthy balance of payments position through exports of cash crops.

Marketing boards were used to extract surplus from the agricultural sector, which were used to provide basic infrastructure. The development of the economy since 1960 has witnessed a declining of the share of agriculture in the gross domestic (GDP). At constant factor cost, agriculture which accounted for about 60% of GDP in 1958/89 was estimated at 50% in 1970/71. Part of this decline is traceable to the relatively higher growth rate of manufacturing and mining, which is consistent with the development pattern characteristics of developing countries. Agricultural export was the engine of growth prior to 1973, providing much of the revenue that the government used in developing a basic infrastructural system. Agricultural export also financed the import substitution industrialization program. Increases in imports due to increasing income and the import requirements of the emerging industrial sector induced balance of payments problems in the late 1960s.

The oil boom of the early 1970s relaxed the financial constraints to development. The GDP at 1977/78 factor cost grew at an average rate of only 50% per annum between 1975 and 1980. One major characteristics of this growth was its very unstable nature. The growth rates ranged from 1-3% in 1975/76 to 9.5% in 1979/80. Generally government services recorded the highest growth of 177% in constant terms during this period, manufacturing at 13.3% while agriculture recorded a growth rate of 2.3%. The performance of the economy suggests that there was more to under development than financial constraints. The third national development plan acknowledged that the agricultural and manufacturing sectors during the period 1970 -1974 performed below expectations. This informed the massive expenditure by government in the following period in an attempt to remedy these and other perceived constraints to growth.

1.2     HISTORICAL BACKGROUND OF CASE STUDY

The Federal ministry of Agriculture Abuja was created in 1966 to enable the Federal Government play a leading role in Agricultural and rural development of the country.

Beginning from 1955 the adopted Nigeria agricultural policy assigned specific roles to the three tiers of government and the private sector in Agricultural development. Government’s role became limited to promotional activities. It has so many sectors ranging from cattle rearing, fisheries, forestry, organic farming, livestock, etc.

MISSION STATEMENT

Their mission is to promote agricultural development and management of National Resources through Agricultural value-chain approach, to achieve sustainable food security and production of agricultural raw materials to meet the needs of the expanding industrial sector.

THE AGRICULTURAL STRATEGY

Nigeria’s agricultural strategy is a synthesis of the government’s framework and action plans for achieving overall agricultural growth and development. The strategy aims at attaining self sustaining growth in all agricultural sub-sectors and structural transformation for the socio-economic development of the country as well as the improvement in the quality of life of Nigerians.

1.3     STATEMENT OF PROBLEMS

Agricultural aims at providing food for the ration and creation of wealth and development on the general economic situation of the nation. But there are several challenges involved marketing of agricultural produce ranging from limited access to the market information, low literacy level among the farmers, multiple channel of distribution that eats away the pocket of both farmers and consumers, poor storage facilities, although technology have improved but it has not gone to the rural levels as it is confined to urban areas alone. There are several loopholes in the present legislation and there is no organized and regulated marketing system for marketing of agricultural product, farmers have to face so many hardships and have to overcome several hurdles to get fair and just price their sweat, most times transportation posses a great problem in marketing agricultural products.

This is due to the bad roads, and bad vehicles. This research work will therefore look into certain measures that will provide agricultural market reforms that will boost Nigeria’s economy.

 1.4     STATEMENT OF HYPOTHESIS

As a guide of this study, a hypothesis has been drawn to allow for smoother elaboration of this research. It is therefore hypothesized that, agricultural marketing is a very important factor in the development of Nigeria’s economy. This statement is formulated as follow using the null (H₀) and alternative (H_i) hypothesis.

H₀: Agricultural marketing has serious impact on the Nigeria’s economy

H_i: Agricultural marketing has no serious impact on the Nigeria’s economy

1.5     OBJECTIVES OF THE STUDY

Agriculture as the engine house of world economics needs to be overhauled and serviced in order that the tears of Nigerian masses may dry up. This can only be possible when the government starts investing substantial capital into the sector. Also banks, insurance companies, co-operative and individual groups and corporate investors should be encouraged to invest in this sector.

This research work aims at developing the Nigeria’s economy through agricultural marketing and to propel the sector to produce food and fibres to feed people and the industry at a faster rate and fasten the creation of self-reliance, self-contentment and self sufficiency and also device means which will lead to adequate supply of raw materials for industries, increased foreign reserve and increase in the export of non-oil commodities which will lead to improvement in the standard of living of the masses.

1.6     SIGNIFICANCE OF THE STUDY

The significance of agricultural marketing on the Nigeria’s economy cannot be over emphasized. It therefore serve as a tool for developing the economic situation of the nation through marketing of agricultural products and developing agricultural products by providing that farmers have to start having long-standing visions that can excel in growth terms to a sustainable private and public economy and that Nigeria banks particularly should not be allowed to define their over-popularized and over-advertised universal banking system without relating it to agriculture, insurance firms have to start picking interest in the area of agriculture to give it some safety and confidence and it ensures that legislatures start thinking on ways to enact economic laws that encourage and boost agricultural production as well as laws that create enabling environment for its sustainability and safe practice, because not turning to agriculture will imply our continuous dependency on crude oil and unnecessary reliance on importation of goods that could have otherwise been manufactured in our country.

1.7     LIMITATION OF THE STUDY

This research work which is aimed at examining the impact of agricultural marketing on the Nigeria economy is limited to some constraints such as time factor; there is not enough time for the researcher to carry out this research effectively. And also finance is another limitation of this study because; finance has necessitated the researcher to visit institutions which would have been of relevance to this research work.

1.8     SCOPE OF THE STUDY

This study is set out to examine the impact of Agricultural Marketing on Nigeria’s economy. That is, how agricultural marketing is capable of boosting the economic situation of Nigeria if proper attention is given to agricultural sector.

For proper coverage on this research work therefore, emphasis will be placed on some department in the Federal ministry of Agriculture, Abuja because of the constraints affecting this research work.

1.9     DEFINITION OF TERMS

Agriculture: Agriculture is the science, art and business of cultivating soil, producing crops and raising livestock.

Marketing: Marketing is the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, client, partners and society at large. Marketing deals with identifying and meeting human and social needs profitably.

Agricultural Marketing: Agricultural marketing is the activity that direct the movement of agricultural products from point of production to point of consumption.

Economy: Economy is the wealth and resources of a country or region especially in terms of the production and consumption of goods and services.

Distribution: Distribution is the action of sharing something out among a number of recipients or the way in which something is shared out among a group or spread over an area.

Middlemen: A person who buys goods from producers and sells them to retailers or consumers.

Consumer: A person who purchases goods and services for personal use.

Questionnaire: Questionnaire is a set of printed or written questions with a choice of answers, devised for the purpose of a statistical study.

BIBLIOGRAPHY

Bola, O. (2007): Nigeria Agricultural Sector, Oxford University Press, Central Bank of Nigeria 2007, Statistical Bulletin Vol. 18, Pp 132 – 149.

Ekpo, A & Egwaikhide, F. (1994); exports and Economic Growth in Nigeria: A reconsideration of the evidence: Journal of Economic Management 1(1): Pg. 100 – 115.

James Vercammen (2011): Agricultural Marketing; Structural Models for Price Analysis, Routledge Howick, Place London. 1^st Edition, Pg 156 – 189.

Philip Kotler and Kelvin L. (2006): Marketing Management 12th Edition. Prentice Hall London. Pg 205 – 208

Ronald Schrimper (2001): Economics of Agricultural Markets. 1^st Edition Prentice Hall: Upper Sadiller River, New Jersey USA. Pg 120 – 135.

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