The Agricultural Sector As The Key To The Diversification Of The Nigerian Economy For Sustainable Development

Project and Seminar Material for Agricultural Engineering AE

The Agricultural Sector As The Key To The Diversification Of The Nigerian Economy For Sustainable Development


With the recent and continued fluctuations in the international price of crude oil, lack of diversification of the Nigerian economy has led to economic downturn which has impacted negatively in the life of an average Nigerian. This study is therefore focused on examining the agricultural sector as the key to diversification of the Nigerian economy away from oil so as to bring about sustainable economic development. The study examined the role of agriculture in the Nigerian economy and stressed that concerted efforts should be made in order to make the agricultural sector attractive to both local and international investors, this is in view of the fact that majority of Nigerians are employed in this sector, thus, when this sector is made better, the lives of many Nigerians will also be made better. The study made use of secondary data and the quantitative method of data analysis was also employed. Using the multiple regression model the relationship between GDP and agricultural output was examined. The study revealed that the agricultural sector is positively related to the GDP and therefore, is very vital in achieving sustainable economic development. This is because of the important role that agriculture plays in revenue generation, employment, price stability, poverty reduction, balance of payment equilibrium, raw material production, among others. However, the agricultural sector has been neglected over the years in Nigeria due to the discovery of crude oil in commercial quantity which has made the economy to become fragile and dependent on international super powers. In view of the foregoing, the study recommended that efforts should be made to strengthen the agricultural input supply, improved markets, infrastructures and institutions as well as broad based small holder development program to enable agriculture regain its place in the Nigerian economy. The study therefore concluded that the need for the government to turn her attention to agriculture is very well justified because a vibrant agricultural sector provides the basis for economic growth which will in turn guarantee sustainable economic development in Nigeria.

Chapter One


1.1 Background of the Study

The study of economic history provides us with ample evidence that an agricultural revolution is a fundamental pre-condition for economic development (Eicher & Witt, 1964; Oluwasami 1966; Jones & Woolf, 1909). The agricultural sector has the potential to be the industrial and economic springboard from which a country’s development can take off. Indeed, more often than not, agricultural activities are usually concentrated in the less developed rural areas where there is a critical need for rural transformation, redistribution, poverty alleviation and socio-economic development (Stewart, 2000). Nigeria’s economic aspirations have remained that of altering the structure of production and consumption patterns, diversifying the economic base and reducing dependence on oil, with the aim of putting the economy on a path of sustenance, all inclusive and non-inflationary growth. Despite Nigeria’s vast agricultural resources both human and natural, we are still faced with acute food crisis, the intensification of poverty and massive suffering of the overwhelming majority of Nigerians. This situation is however typical of all third world countries operating within the neo colonial capitalist system (Akor, 2009).

Nigeria is generously endowed with abundant natural resources including biological and non -biological resources. Resources depend on importance attached to it, hence agriculture constitutes one of the most important sectors of the Nigerian economy. The significance of the agricultural resource in bringing about economic growth and sustainable development of a nation cannot be under-estimated. Agriculture contributes to the growth of the economy, provides employment opportunities for the teeming population, export revenue earnings and eradicates poverty in the economy.

Abayomi (1997) stated that stagnation in agriculture is the principal explanation for poor economic performance, while rising agricultural productivity has been the most important concomitant of a successful industrialization. The pervasive influence of agriculture on Nigeria’s economic and social development has also been articulated by Oluwasanmi (1996) “A strong and efficient agricultural sector could enable a country to feed its growing population, generate employment, earn foreign exchange and provide raw materials for industries”. The agricultural sector has a multiplier effect on any nation’s socio- economic and industrial fabric because of the multifunctional nature of agriculture (Ogen, 2007).

Agriculture has been defined as the production of food and livestock and the purposeful tendering of plants and animals, (Ahmed, 1995). He stated further that agriculture is the mainstay of many economies and it is fundamental to the socio- economic development of a nation because it is a major element and factor in national development. In the same vein, Okolo (2004) described the agricultural sector as the most important sector of the Nigerian economy which holds a lot of potentials for the future economic development of the nation as it had done in the past. Notwithstanding the enviable position of the oil sector in the Nigerian economy over the past three decades, the agricultural sector is arguably the most important sector of the economy.

Generally the agricultural sector contributes to the development of an economy in four major ways ;product contribution, factor contribution, market contribution and foreign exchange contribution (Abayomi, 1997; Abdullahi 2002 & World Bank 2007). The objective of this study is therefore to examine the agricultural sector as the key to the diversification of the Nigerian economy for sustainable development.

The definition of agriculture changes over time. Agriculture is the cultivation of plants and husbandry of animals. That is, the management of living things and eco systems to produce goods and services for the people. Agriculture includes farming, ranching, aquaculture, apiculture, horticulture, viticulture, animal husbandry, including but not limited to the care and raising of livestock, poultry husbandry and the production of poultry and poultry products, diary production, the production of field crops, tobacco, fruits, vegetables, nursery stock, ornamental shrubs, ornamental trees, flowers, sod or mushrooms, timber, pasturage, any combination of the foregoing, the processing, drying, storage and marketing of agricultural products. When these activities are conducted in conjunction with, but are secondary to such husbandry or production.

The sustainability of agriculture in Nigeria cannot be isolated from the sustainability of economic development. A number of other related definitions are also in common usage. The American Society of Agronomy, for example, defines sustainable agriculture as one that, over the long term, enhances environmental quality and the resource base on which agriculture depends, provides for basic human food and fiber needs, is economically viable, and enhances the quality of life of farmers and society as a whole (Uptal, 2001).

Another definition by Macrae (1990) posits that Sustainable agriculture is both a philosophy and a system of farming. It is rooted in a set of values that reflects an awareness of both ecological and social realities and a commitment to respond appropriately to that awareness. It emphasizes design and management procedures that work with natural processes to conserve all resources and minimize waste and environmental damage, while maintaining and improving farm profitability.

Agricultural development, a subset of economic development, implies a sustained increase in the level of production and productivity over a reasonable length of time and the subsequent improved wellbeing of farmers as reflected in their higher per capita income and standard of living. Rural development relates not only to a sustained increase in the level of production and productivity of all rural dwellers, including farmers, and a sustained improvement in their wellbeing, manifested by increasing per capita income and standard of living, but also leads to a sustained physical, social and economic improvement of rural communities.

The colonial government recognized the potential of the agricultural sector to improve the Nigerian economy and therefore put in place policies aimed at increasing output and to extract surpluses in the sector. The main focus of development in this period was the surplus extraction philosophy or policy whereby immense products were generated from the rural areas to satisfy the demand for raw materials in metropolitan Britain (Ayoola, 2001). This early interest of the extractive policy was on forest resources and agricultural exports like cocoa, coffee, rubber, groundnuts, oil palm, and cotton. The capitalist agricultural policies of Nigeria since 1900 have remained basically intact. No efforts have been made to fundamentally change them. The nature of these agricultural policies and their impacts led to Nigeria’s agricultural disorientation and the food crisis (Akor, 2009).

Meanwhile, most of these policies were made without proper institutional arrangement, programs, specific projects, strategies, goals or targets and specific objectives geared towards the realization of these dreams of the policies. This can be proved by the fact that there was only one documented agriculture scheme that evolved towards the end of the era (early 1960s) called the farm settlement scheme (Iwuchukwu & Igbokwe, 2012). The imperialistic theoretical framework of the notions of development and modernization have decisively influenced the Nigerian agricultural policies since the colonial era. The rate and direction of Nigeria’s agricultural development were therefore, determined by the British colonialist and taken over by the neo-colonial Nigerian ruling classes since 1960 (Akor, 2009).

The Nigeria’s agricultural development was fully de-centralized with the regions and states carrying out all activities while support was provided by the federal government and this enabled a state/region specific approach. This approach involved the combined efforts of small scale farmers/the private sector and the government. This approach was very successful during the period and thus with agriculture remaining the mainstay of the Nigerian economy; providing employment, raw materials for industries, the main source of foreign exchange earnings and also sustaining the food security status of the populace. The appropriation and utilization of Nigeria’s economic surplus by the colonial and neo colonial imperialist powers is central to the analysis of the structural distortions in the agricultural sector and Nigeria’s food crisis. The central point in the imperialist relationship was the transfer of economic surplus to strengthen the capitalist class and the capitalist mode of production in Europe and North America (Akor, 2009).

However, with the onset of the 1970’s, there was a national neglect of this sector due to oil boom which practically led to a decline in the sector (Abimiku, 2009). Despite the drastic decline, no matter how much development and structural transformation will be achieved in Nigeria, agriculture will continue to retain its relative dominance in the economy for many decades to come. More importantly, it is from agriculture and in particular from agricultural exports that the country received its principal stimulus for economic growth in 1950s and 1960s. It will remain a key factor in Nigeria’s economic development as the largest employer of labour (about 72% of the labour force in 1970-1971), the principal source of food and raw materials for the population and industries and a significant though relatively declining earner of foreign exchange. The acceleration of agricultural growth is therefore crucial for the country’s future progress (Akor, 2009).

In the 1970’s, the policy instrument that was introduced by government included a series of development plans at the national level. The Structural Adjustment Program (SAP) in 1986 came up after this and efforts were made at making the agricultural sector commercially competitive and remunerative and also tried to redress Nigeria’s defective mono-economic imbalance by diverse diversifying programs in order to reduce dependence on the oil sector and also on imports. This policy package focused on a rapid improvement of domestic food production, the domestic supply of agricultural raw materials, the production of exportable cash crops and also rural employment. The client status of Nigeria in the international capitalist system is the fundamental structural basis for imposing the abuses of underdevelopment on the country (Akor, 2009).

The programs only succeeded in creating and raising the awareness to diversify the economy through agriculture and the catalytic and leading role the private sector must play in agricultural development which renewed a general interest in agriculture. Despite its huge potentials, the country is a net importer of food. The nation’s food import basket is made up of items which can be produced locally in sufficient amount. In addition, the economy is characterized by price volatility and high prices due to over dependence on rain-fed agricultural output. Some of the problems faced by agricultural sector include; Under-investment, low productivity, inadequate input, poor and rudimentary storage culture, unfavourable exchange rate policy among others. In addition, (Adesina, 2011), posited that only 1% of total lending in banking sector goes to agriculture despite the fact that the sector accounts for about 70% of employment opportunities and 44% of the Nation’s GDP. The promotion of capitalist agricultural development in Nigeria led to heavy reliance on imported agricultural inputs from the core capitalist countries from 1970 to 1979, while the imported agricultural inputs increased, there were no visible increase in both food and cash crop production .The rise in the importation of agricultural inputs went hand in hand with the rise in food imports, food shortages and negative output of cash crops. The poor performance records of the agriculture in the face of massive imported agricultural inputs imply that the strategy must be faulty and the solutions anticipated misconceived (Akor, 2009).

According to (Sanusi, 2011), Nigeria is incurring a total food import bill of $4.2billion about N638.4billion annually due to the neglect of agriculture and partly due to insatiable appetite of Nigerians for foods not locally produced. For instance, Nigeria is the only country in the world that does not produce wheat and yet consumes 100% wheat bread. According to Okojie & Mike (2006), the relationship between export performance and economic growth has been a subject of considerable interests to development economists especially those who believe that economic growth should be sustained and maintained. Chenery & Strout, (1994) asserted that for a long time, there was hardly any country which exhibited sustained economic growth rate higher than its growth of exports. They also claimed that growth rates of individual developing countries correlate better with their export performance than with any other single economic indicator.

Nigerian government at different times have formulated and implemented several agricultural policies aimed at addressing the myriads of problems confronting the sector and ensuring food availability and foreign exchange earnings for the country. However, for a policy to have a meaningful impact, it must have strategies (that is, programs or projects) geared towards the accomplishment of specific objectives and the ultimate goal of the policy. To this extent, various policy programs and projects have been initiated in Nigeria. Some of these policy programs recorded substantial success while some were huge failures. Similarly, Offiong, (1980) opined that the general obstacles that has frustrated the African match towards economic freedom remained imperialism and dependency. Another impact of imperialism is seen through the process of making and unmaking leaders .As illustrated by Onimode, (1988) “there is no gain saying that most coups carried out in the African continent were planned by the colonial imperialist powers to achieve their purpose of dominance”.

1.2 Statement of the Problem

Nigeria is yet to attain the ranks of a developed country due to lack of structural changes among other factors. Also, it was observed that a factor crucial to this lack of economic progress is the lack of economic diversity which caused the economy to rely heavily on crude oil for revenues and as a major export commodity in the economy (Osuntogun, 1997). Prior to the 1970’s, Nigeria’s exports were predominantly non-oil commodities with agricultural commodities accounting for a lion share. However, in the 1970’s when the price of crude oil in the international market skyrocketed, the share of agricultural exports began to fall and have remained low ever since. This is majorly due to the money spinning nature of oil export which makes it more profitable to export oil and less profitable to export non-oil commodities.

This has caused a rather heavy dependence on the oil sector and the proceeds from exportation of crude oil. This heavy reliance subjects the country to difficulties when the price of crude oil, the major exports commodity is low in the international market (as it is case presently). In light of this, the government adopted various strategies to boost agricultural exports and stabilize the economy. In spite of these efforts, the performance and contributions of the agricultural sector has remained low. The sector has continued to perform below its full potentials. This research is therefore carried out to address the following issues/questions.

  1. What are the factors responsible for low agricultural output in Nigeria?
  2. Why the less emphasis on agricultural sector and much dependence on petroleum sector?
  3. What measures should be taken by government to enhance the performance of the agricultural sector towards diversifying the economy for sustainable development?
  4. Has petroleum impacted positively or otherwise on the agricultural sector and the development of the Nigerian economy?

1.3 Objectives of the Study

In spite of Nigeria’s rich agricultural endowment, there has been a gradual decline in agricultural contribution to the nation’s economy. Low agricultural output has a negative effect on the Nigerian economy as a whole. This research work is aimed at examining the agricultural sector as the key to the diversification of the Nigerian economy for a sustainable development. Other aims include:

  1. To see how Agriculture can be used for the diversification of the Nigerian economy in order to achieve sustainable development.
  2. To identify the constraints hampering Agriculture as a tool for the diversification of the Nigerian economy for sustainable development.
  3. To suggest ways of removing these constraints.
  4. To suggest other measures necessary for improving agriculture as a tool for the diversification of the Nigerian economy for sustainable development.

1.4 Methodology of the Study

This research is geared towards understanding the role of agriculture in the diversification of the Nigerian economy for sustainable development. This study will employ the use of quantitative statistical tools and econometric method of analysis. An econometric multiple regression model will be adopted to determine the impact of agriculture on Nigeria’s economic growth. With the appropriate model, the following tests will be conducted to test the statistical reliability and the significance of the estimated parameters: the standard error test, t-statistics and f-test.

For the purpose of data analysis, a multiple regression model will be used to show the relationship between the dependent variable (GDP) as a proxy for economic growth and the explanatory variables, the revenue from agricultural output, unemployment rate and inflation rate. The hypotheses to be tested in this study are:

  • HO: There is no significant impact of agricultural output on Nigeria’s economic growth.
  • H1: There is a significant impact of agricultural output on Nigeria’s economic growth.

The hypotheses are to be tested at 5% level of significance.

This can be represented mathematically as:

GDP = f (X1, X2, X3,)

This can be further expressed in an econometric model as:

GDP = β0 + β1X1 + β2X2 + β3X3


GDP = Gross Domestic Product

X1 = Agricultural Output

X2 = Unemployment rate

X3= Inflation rate

β0 = Constant term

β1 = Parameter estimate of agricultural output

β2= Parameter estimate of unemployment rate

β3=Parameter estimate of inflation rate

µ = Error term or stochastic variable

The a priori expectation is that an increase in the independent variable (agricultural output) will have an increase in the dependent variable (GDP) while a decrease in the independent variable (unemployment rate) will have an increase in GDP and an increase in inflation rate will have an increase on the GDP. Hence, positive β1, negative β2, and positive β3.

This research work has six chapters, with chapter one covering the general introduction, which includes introduction, background of the study, statement of the problem, objectives of the study, methodology of the study, sources of data, scope and limitations of the study.

Chapter two contains literature review which gives the Classical’s, Neo-Classical’s, Keynesian’s, Neo-Keynesian’s, and Marxian views about using agriculture for economic diversification.

Chapter three examined the Nigerian oil dominated economy and the need for diversification. This contains the declining dominance of the petroleum sector in the Nigerian economy, Alternative sources for the diversification of the Nigerian economy for sustainable development and agriculture as the main vehicle for the diversification of the Nigerian economy.

Chapter four focuses on the agricultural sector as the key to the diversification of the Nigerian economy for sustainable development; agriculture as the main tool for increased revenue generation in Nigeria, agriculture as the main tool for solving Nigeria’s unemployment problem, agriculture as the main tool for curbing inflation in Nigeria, agriculture as the main source of raw materials for industries in Nigeria, agriculture as the main tool for reducing poverty, hunger and malnutrition in Nigeria and agriculture as the main tool for remedying Nigeria’s balance of payment problems.

Chapter five deals with data presentation and analysis, model specification, model estimation, test of statistical significance, interpretation of results and discussion of findings.

Chapter six summarizes the research work. Conclusion and recommendations are also contained in this chapter.

1.5 Sources of Data

Data used in this research work are mainly secondary data obtained from textbooks, journals, newspapers, government publications and unpublished sources such as research projects of and students which served as an important guide to this research work. Also, the internet provided important and useful information that served as a source for this work.

1.6 Scope of the Study

This research work focused on the diversification of the Nigerian economy through the agricultural sector for sustainable development. This study covers a period 24 years (1900-2013). The study will basically focus on the agricultural sector in relation to economic diversification and sustainable development, employment generation, foreign exchange earnings, as well as the petroleum sector and its contributions to the economic development of Nigeria.

1.7 Limitations of the Study

The limitations encountered in this study include time, administrative bureaucracy in government institutions where information were sourced, limited and insufficient information. Also, there was the problem of inadequate finance as well as poor power supply in the country.

Apart from the above mentioned constraints which are capable of adversely affecting the result of this research work, all the other errors and omissions are entirely those of the researcher.

Chapter Six

Summary, Conclusions and Recommendations

6.1 Summary

The main objective of this research project was to examine the agricultural sector as the key to the diversification of the Nigerian economy. The study reviewed the entire concept of agriculture, the classical’s and the neo-classical’s, the Keynesian’s and the neo-keynesian’s as well as the Marxian views about using agriculture for economic diversification.

The Nigerian oil dominated economy and the need for diversification was also considered and it revealed that the extent to which the petroleum sector has contributed to the Nigerian economy in the past few years has been quite tremendous. However, with the declining dominance of the petroleum sector in the past few years due to instability in the international price of crude, there is an urgent need for Nigeria to diversify her economy and move away from dependence on oil and invest in other sectors. One of such sectors is the agricultural sector which I believe has the capacity to rescue Nigeria from her economic woes and position her on the path of sustainable development.

The study also examined critically the agricultural sector as the key to the diversification of the Nigerian economy and how agriculture will contribute in the area of revenue and employment generation, curbing inflation, provision of raw materials, reducing balance of payment deficit, poverty, hunger and malnutrition in Nigeria.

The econometric model of multiple regression as well as statistical tools such as the F-statistic, t-statistic and the standard error test were employed to show that the explanatory variables (X1, X2 and X3) have a relationship with the explained variable (Y). It also goes further to show that a genuine increase in government expenditure on the agricultural sector will lead to a corresponding increase in GDP.

6.2 Conclusion

In this research work, we have empirically verified and examined the agricultural sector as the key to the diversification of the Nigerian economy for sustainable development. It was generally observed that agricultural sector was the mainstay of the Nigerian economy during the 1970s and therefore contributed a large chunk of the GDP of Nigeria. Unfortunately, the oil boom led to almost total neglect of the agricultural sector as government turned her attention to the oil sector as a result of this; agricultural output began to decline to the extent that the country has even become a net importer of most agricultural products that were hitherto produced locally.
However, as the revenue from the oil sector continues to dangle, it is necessary for the government to go back to agriculture in order to diversify the economy for sustainable development. In order to achieve this transformation, functional strategies and policies should be designed to ensure effective implementation of various agricultural programmes. Such programmes must be targeted at the rural peasant farmers as they are the ones directly involved in agricultural production in Nigeria.

6.3 Recommendations

In the course of this study, it was established that agriculture has a key role to play in the diversification of the Nigerian economy for sustainable development and over the years, the government has enacted various policies and programmes aimed at ensuring that agricultural sector contribute significantly to the economic diversification of Nigeria. Despite these policies, agricultural output has remained low over the years. In order to improve this situation, the following recommendations are advanced:

It is of utmost importance for Policymakers to have broad understanding of why economic diversification is important and necessary for economic growth and development of Nigeria because diversification is the most important component of reaching long-term goals while minimizing risk and also it helps to maximize return by investing in different areas that will react differently to the same situation.

It is important to provide appropriate incentives to farmers and ensure conditions that permit them to respond to the incentives. This implies that there must be sound macro-economic policies allowing both trade in agricultural products and their supply to domestic market and an institutional and physical infrastructure that support broad-based change by facilitating access to land, rural finance, technical knowledge etc.

The Nigerian government should devise a set of policy guidelines and most importantly policymakers need to give renewed emphasis to understanding and promoting processes supportive of agricultural growth and increased emphasis is needed on agricultural research so as to address the problems facing farmers in non-green revolution areas.

1. Improved Markets, Infrastructure and Institutions:

Fair, properly functioning markets and access to both inputs and food at reasonable prices are needed for poor Nigerian farmers to fully capture the benefits from access to improved technologies. Improved and timely access to credit, productive inputs (especially inorganic fertilizers) and extension services are needed; policies (like taxes and subsidies) that create distortions in capital markets to favour large enterprises and limit capital to small-scale farmers must be removed. Increasing investments in rural access roads and irrigation are also critical to reduce domestic costs. Market development efforts will benefit from public support in ensuring a favourable business climate and adequate infrastructure that provides reliable and reasonably priced transport, communication, power, and water services.

2. Improved Irrigation Capacity:

Productivity in Nigerian agriculture is low, in part because of the low yield levels and the high yield variability associated with rain-fed agriculture that discourage farmers from investing in inputs such as improved seed, fertilizers and crop protection chemicals. Irrigation can serve as a powerful stimulus to agricultural growth by raising biological yield potential and increasing returns to investments in complementary inputs.

3. Strengthening of Agricultural Input Supply Systems:

There will be no growth in agricultural productivity and exports unless Nigerian farmers increase their use of purchased inputs, especially improved varieties of seed, chemical fertilizers, crop protection chemicals, including pesticides, herbicides and fungicides, and animal health-related products such as vaccines, medications and nutritional supplements. Strengthening input supply systems will ensure that these inputs are available in a timely fashion and at affordable prices.

4. Modern Agricultural Enclaves:

The main problem faced by Nigeria’s urban dwellers is a shortage of food supplies which results in excess importation. To solve this problem, the Nigerian government should invest on a large-scale in subsidized production units. These units include state farms, commercialized private farms or some capital-intensive projects which use imported industrial machinery. The main aim of the approach is that implementing it will result in a “trickle-down effect” of wealth from massive industrial projects to poor labour via employment.

5. Broad-Based Smallholder Development Program:

This program involves a broad distribution of subsidized key inputs to farmers that guarantees regular farm production and allows them a consistent income and food security. The components of this program include a method to decrease price instability and risk of farmers, enhanced marketing infrastructure to cut down on costs, more credit allowance, irrigation facilities on a small-scale, drainage construction and rehabilitation. These programs will require a hefty investment to develop services and social infrastructure in rural areas to raise ‘non-monetary’ income among small farmers. A small farmer can get subsidized inputs and have easy access to family labour and which helps him adapt to changes in costs. Getting more income from their own farms will allow farmers to live comfortably and reduce chances of rural emigration. Mexico and Indonesia implemented smallholder intensification strategies and proved to be extremely effective in utilizing their oil revenues in comparison to Nigeria’s large-scale capitalistic projects. Even though this plan is expensive to implement, Nigeria can afford and implement it if it wants to. It can still rectify the mistakes it made in the last five decades. It is now essential for the country to observe and learn from other countries who have implemented these plans. Nigeria should now seriously put these plans into action to achieve income and food security and hence, economic development and growth.

6. Value Chain Development:

Agricultural linkages with industry and services should be developed based on the value chain model. The value chain model entails holistic and synergistic engagement of the entire range of agri-business and economic activities and services in the production, processing, storage, transportation, distribution and marketing of agricultural outputs. Value chain approach coupled with agro-industrial development is critical to wealth creation and employment generation. Value chain development, rather than supply-based orientation holds the prospects for sustainable agricultural growth and linkages with industry and services. Hence, I propose the use of a non-parametric measure, The Value Chain Compliance Index (VCCI) to benchmark agricultural commodity development interventions.

7. Sound Agricultural Governance:

Good government is absolutely crucial. The agricultural value chain is beset with facilitation, systemic and services gaps which underpin the market failures (missing markets and weak markets). Agricultural input- and output-markets suffer institutional and structural deficiencies including information asymmetries, price rigidities, logistics failures, cost escalations, skills gaps and weak regulation. These gaps underscore the critical role of government in providing public goods and mitigating externalities. These factors limit the rapid and effective transmission of feedback from market to production. In addition, they hamper efficient market pricing and market growth. Another dimension of the need for gap-filling is the asymmetry of risks and returns in agricultural production. Because of the biotic and climate-dependent nature of agriculture, production is highly vulnerable to risks that are external to the farm. Often, in comparison to other economic sectors, the returns in farming often do not match the potential risks. As a result, there is disincentive for private investments. Agricultural governance should function to help alleviate market gaps, mitigate risks and foster synergy and equitable terms of trade between agriculture and other economic sectors.

8. Evidence Based Policy Making / Programming:

Connecting the ‘Gown’ and the ‘Town’: For agricultural development to become effective and sustainable, policies and programmes must be based on research insights. The innovation model of interface between research, policy and enterprise is indispensable for optimizing the economic contributions of agriculture. Currently, there is wide gap (and lack of feedback) between agricultural research and agricultural sector policymaking and between agricultural research and agricultural enterprise. The gap can be ameliorated through the creation of institutional frameworks to broker links between the ‘gown’ and the ‘town’. The universities can and should develop clear institutional mechanisms in the manner of innovation networks to connect university agriculture research with private enterprise (industry and services). Such initiative will facilitate, coordinate and nurture the testing, utilization and commercialization of products and innovations from university research. Innovation networking models necessitate mindset change among researchers, policymakers and business people .The mindset needs to change from “isolation and distrust” to “mutuality” in accountability and responsibility. Researchers, whether in the universities, public and private research institutes, should show leadership in promoting research paradigm shift. Research-based solutions should become less prescriptive and less normative but more nuanced, more reflective and more engaging with real-life problems. An important new dimension of the needed paradigm shift in many developing country contexts is the move from conventional “research and development”(R & D) towards proactive “research for development” (R 4 D).

Last but not the least to solve Nigeria’s agricultural problems, an honest, patriotic and caring leadership is an utmost priority that Nigeria can never do without. Any lasting solution can only be possible under an uncorrupt, patriotic and caring leadership because an essential ingredient for agrarian transformation in Nigeria is the liberation of the rural masses from the oppression of the urban elites and the exploitation of domestics and foreign capitalists. Mass participation of the rural majority is imperative not only to agricultural development but the overall economic and social transformation in Nigeria. Such a drive should be predicated on wisely formulated national priorities addressed both to the elimination of the structural distortions in the economy arising from the anarchy of the imperialist exploitation and to the liberation of the peasant majority from their virtual enslavement.

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