GOVERNMENT EXPENDITURE AND AGRICULTURAL PRODUCTION IN NIGERIA

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CHAPTER TWO

LITERATURE REVIEW

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