IMPACT OF AGRICULTURAL OUTPUT ON ECONOMICS GROWTH IN NIGERIA 1980-2013

This study examined the impact of agricultural development on Nigeria’s economic growth (1980-2013) while the specific objectives were to: ascertain if there is long run relationship existing between agricultural development and economic growth in Nigeria and evaluate if there exist any significant causal relationship between agricultural development and economic growth in Nigeria. The study employed ex-post facto research design using Nigeria’s data obtained from CBN (1980-2013). The empirical results were on Augmented Dickey Fuller test. In the second step, Johansen cointegration test was conducted. The presence of long run equilibrium found led to the use of Error Correction Mechanism (ECM).  It was found that there is significant long run association existed between agricultural development and economic growth within the period under study. Granger Causality test conducted indicated the presence of one way causality running from agricultural development to economic growth. More so, it showed that government expenditure on agriculture preceded economic growth within the sampled period of study. In order to sustain long run positive relationship between agricultural development and economic growth in Nigeria, policies which will gear up increase in agricultural output must be maintained. A general review and proper implementation of budgetary allocation of the government expenditure on agriculture must be undertaken. More so, government should always consider agricultural sector development as the hallmark for her expenditure in the sector. In so doing, her spending on the economy will promote growth.

          Agriculture is the foundation and bedrock upon which the development of stable human community has depended on throughout the whole universe. It is concerned with the husbandry of crops and animals for food and other purpose. The study of the history of economics provides us with ample evidence that agricultural revolution is a fundamental pre condition for economic development. The agricultural sector has the potentials to be the industrial and economic springboard from which a country’s development can ke off. Indeed, more often than not, agricultural activities are usually concentrated in the less developed rural areas where there is a need for rural transformation, redistribution, poverty alleviation and socio-economic development.

          The agricultural sector has the potentials to shape the landscape, provide environmental benefits such as conservation, guarantee sustainable management of renewable natural resources, preserve biodiversity and contribute to the viability of rural areas development. Through its spheres of activities at both the macro and micro levels, the agricultural sector is strategically positioned to have a high multiplies and linkage effect on any nation’s quest for socio-economic and industrial development. The growth of the agricultural sector in Nigeria was not smooth.

          Anyanwu (1967) held that during the colonial period between 1861 to 1960, attention was given to agricultural research and extension services. Among the activities that were done was the establishment of a research station in Lagos by Sir Claude Mc. Donald in 1893: Landmark of 10.4 km was acquired by the British Cotton Growing Association (BCGA) in 1899 for experimental purpose strictly for cotton and was named “Moor Plantation” in Ibadan. In 1912, the Department of Agriculture was established in each of the then southern and Northern Nigeria, but the activities of the department were virtually suspended between 1912 and 1921 as a result of the First World War and its aftermath. The period between 1929 and 1945 was a difficult one for the agricultural sector of Nigeria. This was the period of great price depression when the world price on commodities fluctuated. This affected the agricultural sector negatively because the volume of agricultural product increased but the value did not increase proportionally.

          The period 1945 marked the period of expert boom, because counties were just recovering from the Second World War and these countries needed to develop. They depended on primary production for the beginning stage of industrialization. They needed to revitalize their industrial sector by demanding primary goods. Prices of primary products rose higher again because there were speculations that there would be a third world war due to the outbreak of the Korean War. However, after this period, there came another period of price instability. This made the reliance on agriculture and its products to fall, leading to the establishment of a market board. This board bought these products from the local farmers and sold them overseas.