Growth And Poverty Reduction: The Role Of Agriculture

Project and Seminar Material for Agricultural Economics and Extension

Abstract

This work covers the growth and poverty reduction: the role of agriculture, a case study of Gboko local government area in Benue state, Nigeria. On the course of this work three research questions and objectives were formulated and the descriptive/survey research design were used in this study. Agriculture is a key part of DFID’s efforts to reduce global poverty and achieve the Millennium Development Goals. It extends into many other areas of development policy and complements our work on issues such as fisheries, forestry, food security, social protection, governance and trade. Building on our understanding of livelihoods (DFID, 2002), this works shows why we believe agriculture should be placed at the heart of efforts to reduce poverty. There is a mass of evidence that increasing agricultural productivity has benefited millions through higher incomes, more plentiful and cheaper food, and by generating patterns of development that are employment-intensive and benefit both rural and urban areas. More importantly, it has provided the spur to economic development outside agriculture where growth and job creation are faster and wages higher.

Chapter One

Introduction

1.1 Background to the Study

The goal of every government is to provide services to its people that would enhance the standard of living and social wellbeing of the people. Many of these services focus on poverty reduction by providing basic human needs to the poor. In recent times, the global focus has been on poverty reduction. In Nigeria for instance, the incidence of poverty is growing by the day as evidenced in the figures released by the National Bureau of Statistics; that about 100 million Nigerians are said to be living below 1 dollar a day (NBS, 2012). The World Bank had stated about a decade ago, that over 45 percent of Nigeria’s population live below the poverty line while about Two third of this group are extremely poor (UNDP, 1996).

According to International Fund for Agricultural Development (IFAD), the largest segment of the world’s poor is the 800 million poor women, children and men who live in rural environments. These are the subsistence farmers and herders, the fishers and migrant workers, the artisans and indigenous peoples whose daily struggles seldom capture world attention. Empowering rural people is an essential first step to eradicating poverty. The rural poverty report 2011 provides a coherent and comprehensive look at rural poverty, its global consequences and the prospects of eradicating it. Released on 6th December, 2011, the report contains up dated estimates by IFAD regarding how many rural poor people there are in the developing world, poverty rates in rural areas, and the percentage of the poor people residing in rural areas.

Until recently, development efforts concentrated mostly on increasing the growth rate of Gross Domestic Product (GDP). The latter was expected to ultimately “trickle” downwards. Economic wellbeing in general, and hence poverty alleviation, was largely perceived in terms of high rate of per capita GDP. However, excessive focus on high GDP growth rates as a remedy for extreme poverty has been seriously questioned (see Fleurbaey 2009). There is a growing consensus among development economists that growth alone is not enough to reduce poverty. It is argued that widespread illiteracy, growing vulnerability to hunger and diseases, environmental deteriorations, among others, affect human welfare independently of income (Streeten, 1994; World Bank, 1990). It is argued that growth can contribute most to poverty alleviation when it expands employment as well as the productivity and wages of the poor; and when public resources are spent on human and physical infrastructure development. This perception of the character of economic growth obviously looks beyond the earlier trickle down doctrine and seeks to achieve broad-based and sustainable poverty reduction. Emphasis is on the strengthening of capabilities, especially of the poor, and an increased focus on the non-income dimensions of poverty (see Sen, 1993). This is the essence of pro-poor growth and it calls for a development strategy which makes meeting the needs of majority in the population its central objective. Empirical studies show that high levels of poverty can have a negative impact on overall economic growth rates. They exacerbate social tensions, limit the functioning of markets and adversely affect the employability of the (extremely) poor and disadvantaged (see Chen and Ravallion 2001).

However, as important as this shift in developmental thinking may be, there is still much to be done in defining what pro-poor growth is, how to assess and measure it, and more importantly, how to translate this knowledge into effective policy making. These raise certain issues: the need for an alternative, non-income, measure of achievements in development efforts; and the need to deliberately empower the citizenry (the poor and the non-poor alike) as a means of ensuring massive participation in the development process (Oturupane, Glewwe and Isenman 1994).

1.2 Statement of the Problem

The National Bureau of statistics observed that the poverty level in Nigeria was climbing higher on the poverty ladder rather than declining. Agu and Ichoku (2013) also stressed that latest statistics on poverty signals a continued spiral downwards in the welfare indicators. They further added that between 2004 and 2010 (a period of less than 7 years), the proportion of Nigerians living in absolute poverty jumped from 54 percent to 70 percent. Nonetheless, agriculture is encountering the following hurdles: the poor utilization of fertilizers, weak irrigation systems and rural roads, limited access to credit, poor research and extension, and limited linkage to global markets. These pitfalls combined render weak production, diversification and competition both regionally and internationally. Moreover, tackling these hurdles alone is inadequate to make agricultural growth pro-poor.

Globally, extreme poverty continues to be a rural phenomenon despite increasing urbanization of the world’s 1.2 billion extremely poor people, 75 percent live in rural areas, and for most part, they depend on agriculture, forestry, fisheries and related activities for survival (Anriques and Stamaulis, 2007). Promotion of rural economy in a sustainable way has the potential of increasing employment opportunities in rural areas and stemming premature rural-urban migration. The Federal Republic of Nigeria with a population of more than 160 million, the largest in Africa (IFAD, 2010), depends on agriculture to cater for the needs of the rural poor. The agricultural sector employs approximately two-thirds of the country’s total labour force and provides a livelihood for about 90 percent of the rural population. Realizing the plight of the subsistence farmers in Nigeria, the herders and the fishers, etc the World Bank through the Fadama Project focused more on increasing the income of Fadama users. The goal was to promote rural economy and thereby reduce rural poverty by half. The project was expected to steer a rapid private sector led poverty reduction and growth of agriculture particularly in the non-oil economy and empowering governments to play an active role in their own development.

1.3 Research Questions

This study is therefore out to address the following research questions:

What are the roles of agriculture in reducing poverty and promote growth in Nigeria?
What strategies were adopted to reduce poverty and promote growth in Nigeria?
What were the challenges facing agriculture on poverty reduction and promoting growth in Nigeria?

1.4 Aim and Objectives of the Study

The main aim of the study is to examine growth and poverty reduction: The role of agriculture.

The specific objectives are to;

Examine the role of agriculture in reducing poverty and promote growth in Nigeria.
To determine the implementation strategies adopted to reduce poverty and promote growth in Nigeria.
To identify the challenges faced by agriculture on poverty reduction and promoting growth in Nigeria.

1.5 Significance of the Study

The significance of the study is drawn from two stand points: Academic and practical view.
In the academic arena, this study will prove to be significant in the following ways;

The study will serve as a body of knowledge to be referred to by future and present researchers
It will contribute to the enrichment of the literature on roles of agriculture in poverty reduction and growth.
Practical view
It will enlighten the government on the strategies and implementations necessary to reduce poverty and promote growth in the country, thereby improving the standard living of its citizens. Also it guide the can generate revenue without concentrating more on the oil sector, thereby enabling the government to plan and strategies every possible means to promote agriculture in the country.

1.6 Scope of the Study

The study covers growth and poverty reduction: The role of agriculture in Benue state, Nigeria.

1.7 Limitations of the Study

This study was exposed to the following limitations

Delay in filing ad returning questionnaire by respondents.
Small sized sample was used due partly to limited financial resources.
Limited use of varied analytical techniques due to size of the sample
Difficulty in accessing significant researchable materials.
Financial and time constraints also majored as the limitation of the work.

1.8 Definition of Relevant Terms

Agriculture:

This is the art and science of cultivating the soil, growing crops and raising livestock. It includes the preparation of plant and animal products for people to use and their distribution to markets. Agriculture provides most of the world’s food and fabrics.

Growth:

Growth here in this context can be defined as the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP.

Poverty:

Poverty is not having enough material possessions or income for a person’s needs. Poverty may include social, economic, and political elements. Absolute poverty is the complete lack of the means necessary to meet basic personal needs, such as food, clothing and shelter.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Summary

Agriculture plays a good role in poverty reduction and growth.
They are strategies adopted to reduce poverty and promote growth in Nigeria.
There are possible challenges facing agriculture on poverty reduction and promoting growth in Nigeria.

This findings shows that agriculture remains crucial in the overall economic growth and poverty amelioration.

5.2 Conclusion and Recommendation

In conclusion, the most effective way for poverty reduction in Nigeria is to promote broad-based, inclusive growth with a particular emphasis upon agricultural development. This is viable given the facts that most of the population live on agriculture, the bulk of the poor live in rural areas, and the comparative advantage of the Nigerian economy lies in abundance in agricultural land and young, low-skill labor. Despite the proportion of agriculture to GDP growth has declined in relation to industry and services, agriculture remains crucial in the overall economic development and poverty amelioration.

Nonetheless, agriculture is encountering the following hurdles: the poor utilization of fertilizers, weak irrigation systems and rural roads, limited access to credit, poor research and extension, and limited linkage to global markets. These pitfalls combined render weak production, diversification and competition both regionally and internationally. Moreover, tackling these hurdles alone is inadequate to make agricultural growth pro-poor. While large-scale agricultural investments (for instance through ELCs) are central, the issues of landless and land-poor farmers are of equal essence to be addressed given their critical part in the agrarian structure of the country. These smallholders need to be provided with (more) land and titling; and their collective bargaining authority for increasing production, markets and values need to be enhanced. Otherwise, agricultural development cannot help mitigate the widening inequality brought along by the economic growth thus far.

Based on the findings in this review, this work recommends that

Government should improve agriculture from the grass root by providing the needed condition for the poor farmers to improve their productivity.
Increase in output should be more of labour intensive so as the multiplier effect of such increase to widely felt.
Capital expenditure on agriculture should be improving so that farmers can have access to farm implements.
Government should help farmers to sell their product at reasonable price.

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