IMPACT OF AGRICULTURAL COOPERATIVES ON FARMERS OUTPUT IN NIGERIA: CASE STUDY OF ENUGU STATE

CHAPTER ONE

INTRODUCTION

1.1. BACKGROUND OF THE STUDY

Agriculture is the mainstay of Nigeria economy, the major occupation of the rural people. Its role in the socio-economic development of Nigeria cannot be over- emphasized. It provides employment for more than 80% of the Nigerian population. Umebali (2011) however pointed out that “despite the fact that more than 50% of the total labour force is involved in farming yet output is not enough to feed the ever increasing population” presently the population growth rate is higher than food production level. The roles of co-operatives in agricultural development is an important topic of study and much has been done by scholars and co-operators to justify it prime role of securing economic and political development in the country. The improvement of agricultural production through co-operative has economic effect in that; co- operative enterprise brings better yield which in turn yield better standard of living for the members and their families. Agricultural co-operatives are agricultural-producer-owned coops whose primary purpose is increase member producers’ production and incomes by helping better link with finance, agricultural inputs, information, and output markets. The large-scale introduction of agricultural coops in the 1970s and 2012s, with compulsory membership, was associated with declining agricultural output per capita. In Nigeria, when farmers were allowed to join or leave cooperatives at will in 1991, cooperative membership fell drastically and yields rose. Certainly, there have been cooperative success stories in the region for instance the dairy sector in Kenya, coffee in Nigeria, and cotton in Mali, for example. The examples of Taiwan, India, and Vietnam also show that cooperatives can be instrumental in sector transformation. Unfortunately, to date, no African country has achieved a sustained and large scale increase in staple crop yields as a result of cooperative action and many cooperative development programs have failed to achieve their objectives or have even been counterproductive. The purpose of agricultural cooperatives is to help farmers increase their yields and incomes by pooling their resources to support collective service provisions and economic empowerment. Given their primary remit to contribute to smallholder farmer production, agricultural cooperatives are seen as critical in achieving the government’s development targets in the Growth and Transformation Plan, and focusing on other types of cooperatives requires an alternative framework for analysis. The main categories of agricultural co-operatives fall into mainstream activities of agricultural undertaking including supply of agricultural inputs, joint production and agricultural marketing. Input supply includes the distribution of seeds and fertilizers to farmers. Co-operatives in joint agricultural production assume that members operate the co-operative on jointly owned agricultural plots. The third category consists of joint agricultural marketing of producer crops, where farmers pool resources for the transformation, packaging, distribution and marketing of an identified agricultural commodity. In Nigeria, however, the most popular agricultural co-operative mode has historically been the marketing of agricultural produce after small farmers have individually completed their farm production operations. But in some cases, agricultural co-operatives have combined both input distribution and crop marketing.

1.2. STATEMENT OF PROBLEM

In the effort to improve the agricultural sector in Nigeria, the government embarked on various programmes some of which were listed by Iwuchukwu and Igbokwe (2012) as; National Economic Empowerment and Development Strategy (NEEDS) – 2013, National Special Programme of Food Security (NSPFS) – 2011 and the Root and Tuber Expansion Programme (RTEP) -2010. In 2005, it was recorded that agriculture contributed 6.8% out of 8.2% growth rate recorded by the entire non-oil sector (NEEDS, 2008) and about 41% of the gross domestic product (NBS, 2007). However, the alarming growth rate of Nigeria’s population of about 144 million at 3,2% per annum, which would doubled in less than 25 years if not checked (Oladipupo, 2008) is a challenge in a country where more than 90% of the agricultural output is accounted for by small-scale farmers. As such, these small-scale farmers who are characterized by low income, low resource utilization, small and scattered nature of farmlands will find it difficult to meet the teeming need of the increasing population. Farmers have limited access to credit facilities as commercial bank officials who are aware of the risk-prone enterprises often refuse loan to these farmers. Most of the agricultural produce is lost owing to poor post-harvest handling, storage and processing methods.   Cooperative has been regarded as one of the main institutional machineries for empowering the economically weak member of the society. With this official recognition and the determination of government (at all levels) to transform agricultural production and raise the standard of living in the rural areas many agricultural cooperative societies have been formed all over the country. Despite the efforts or contribution made by the cooperative societies towards agricultural development in Nigeria, this effort has not been evenly known and it was in an attempt to address such problem that this study was designed to find out the impact of Agricultural cooperatives on farmers output in Nigeria.

1.3 AIMS OF THE STUDY

The major purpose of this study is to examine the impact of agricultural cooperatives on farmers output in Nigeria. Other general objectives of the study are:

1. To examine the contributions of farmer’s co- operative societies on the improvement of agriculture.
2. To examine the socio-economic characteristics of members of the co- operative societies.
3. To examine the impacts of agricultural cooperatives on farmers output
4. To examine the contributions of co-operatives to agricultural production in Nigeria.
5. To examine the relationship between agricultural cooperatives and agricultural production.
6. To examine constraints that hinders the contribution of co-operatives to agricultural production.

1.4. RESEARCH QUESTIONS

1. What are the contributions of farmer’s co- operative societies on the improvement of agriculture?
2. What are the socio-economic characteristics of members of the co- operative societies?
3. What are the impacts of agricultural cooperatives on farmers output?
4. What are the contributions of co-operatives to agricultural production in Nigeria?
5. What is the relationship between agricultural cooperatives and agricultural production?
6. What are the constraints that hinder the contribution of co-operatives to agricultural production?

1.5 RESEARCH HYPOTHESES

H0: There is no significant impact of agricultural cooperatives on farmers output.

H1: There is no significant relationship between agricultural cooperatives and agricultural production.

1.6 SIGNIFICANCE OF THE STUDY

The study will be of good help to policy makers, the government and those who are interested in improving agricultural activities or forming agricultural cooperative activities by which people take place in formalized long-term, deliberate and to great extent, specified form in the social and especially economic share of human endeavour.

1.7    SCOPE OF THE STUDY 

The study is based on the impact of agricultural cooperatives on farmers output in Nigeria.

1.8 LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.8 DEFINITION OF TERMS

Impact: A possible future effect or result, something that is suggested without being said directly. The fact, state of being involved in or connected to something.

Agriculture: This is the process of producing food, feed, and fibre by cultivation of certain plant and the raising of domesticated animal. It is a general term per productive activities like growing as crops raising of animal (including poultry) fishing and forestry.

Agricultural Cooperatives: Co-operatives involved in agro-allied activities. The agricultural cooperatives are considered to be economic and social units that aim at the agricultural development

Farmers: An individual whose primary job function involves livestock and/or agriculture. A farmer takes all the necessary steps to ensure proper nourishment of the items that he/she raises and then sells the items to purchasers. Some farmers have been able to capitalize on the need for high-demand products that they produce, such as organic vegetables and livestock.

Output: output refers to the volume of production, while productivity signifies the output in relation to resources expanded. The quantum of production can be increased by employing more resources without increasing productivity and productivity per unit terms can be increased without increasing production by employing less input for the same production level.