It’s Time to Transform Agriculture for Meaningful Diversification of the Economy

The agriculture sector in Nigeria employs no less than 70 percent of the labour force and accounts for 21 percent of GDP. Despite this level of importance, the sector has not received the attention it deserves. Possibly, this explains why it has remained so underdeveloped over the last several decades.

Considering the current state of the economy and negative socio-economic indicators, the question that should occupy policymakers ought to be how to develop the agriculture sector, alongside other significant contributors to GDP, such that it increases economic growth and promotes sustainable development. In recent times, there has been significant attention by government to diversification, with development of the agriculture sector at the centre of the discourse. Is this solely because revenue from oil is becoming increasingly unreliable and uncertain and the country needs an alternative cash cow? Or is diversification being pursued for the right reasons, namely, to develop the Nigerian economy to address unemployment, income disparities and poverty on an inclusive, sustainable basis?

Sadly, the development focus of government has not significantly impacted on the economy, and agriculture is not an exception. Perhaps the reason why development has not yielded the expected improvement in the lives of Nigerians could be due to the lack of content, proper planning and sustainable initiatives. If government is pursuing development initiatives but the citizens are not seeing the dividends, could it be that both have different ideas of development? What comes readily to the mind of the average person when government pronounces this word? To the average government official, it would possibly mean more physical infrastructure such as rail lines and road networks crisscrossing the country, more power stations, more schools, hospitals etc. To the average person, it probably, by contrast, means a better (paying) job, more electricity, more food on the table and clothes for the children, better housing and more disposable income.

Is there a universal definition of development? It is simplistic to see development purely in terms of physical infrastructure. Development is a more nuanced concept, as the UN’s definition shows: “Development is a multidimensional undertaking to achieve a higher quality of life for all people. Economic development, social development and environmental protection are interdependent and mutually reinforcing components of sustainable development”. It is arguable that not much thought has been given to development in this sense and this could explain the state of the Nigerian economy. The agriculture sector has fared poorly from the dizzy heights of the 1960s when production and export of cocoa, oil palm, groundnut, and cotton dominated international trade. Much has changed since: Oil has taken centre stage and the result is an agricultural sector in an abysmal state with 90 percent of output being attributable to subsistence farmers and over 70 percent of farmers living below the poverty line.

Clearly, the jump from agrarian to modern economy was ill-conceived and poorly planned. As a matter of fact, one could say agriculture development was truncated. The consequences of this, which the nation still grapples with, are unemployment, poverty, social dislocation, exclusion, and widening income disparity. Development policies and programmes should be framed as pathways to increased growth and sustainable development and that requires looking at the entire panoply of issues and challenges in creating an integrated plan to address and reform agriculture. After all, it definitely has the potential to be a leading driver for a more diversified economy. The idea is not to abandon the oil sector and focus solely on agriculture; real diversification requires transformation of a diverse range of sectors. To achieve this, linkages should be established with the oil sector and other sectors that can readily create value and jobs taking cognizance of our starting conditions (resources, labour preparedness etc.). If government had sufficiently invested oil earnings in enablers for increased agriculture productivity such as transport, energy infrastructure, superior farming techniques, the agriculture sector would have supported and spurred the development of the manufacturing sector with food for urban population and inputs for agro-allied and light manufacturing sectors. This in turn would spur additional investment in energy and transport infrastructure as industrial activities ramp up. Development in all three sectors would create jobs and drive economic growth and development.

How do we achieve all this? We have to start from where we are, which is an agriculture sector dominated by smallholdings and subsistence farming. A clear plan must have at its centre the transformation of the low-yield subsistence farmer into a productive commercial farmer with clear goals of increases in output, productivity and food security. Also, the development plan must be explicitly formulated as an expansion plan for exports and improved trade balances. Finally, the plan must also include a component to deepen agriculture value chains, to increase the benefits and returns that would accrue to the economy.

In investing in inputs that would drive sustainable growth in the agriculture sector, government will not be reinventing the wheel. Several developing countries have adopted this approach in transforming their agriculture sectors as engines for job creation, growth, and prosperity. Given that Nigeria’s agriculture sector in its current state absorbs two thirds of the labour force, it stands to reason that were deliberate investments and policies made to improve this sector, productivity gains and employment generation would, to a large extent, address the plethora of socio-economic challenges and problems Nigeria contends with.

Attention must likewise be paid to complementary issues and challenges that influence agricultural output albeit indirectly, but substantially. For instance: (i) health – we need to assess the impact of illnesses on agricultural output and productivity, ensuring better primary healthcare outreach to  rural dwellers; (ii) education – we need to improve basic education and skills acquisition facilities to boost the use of superior farming techniques and augment interfacing with input and output markets; (iii) energy and transport– we need to provide the infrastructure to drive the transformation and efficient conveyance of input and outputs; and (iv) climate change – we need to promote conservation, proper land management and practices to reduce the adverse consequence of global warming. All of this combined will no doubt help subsistence farmers emerge from poverty and make their mark in a world of bi-seasonal crop production.

With the right amount of planning, investment and industry, achieving all this is possible; after all, this is a well-trodden path that transformed a good number of developed and emerging economies. According to a 2017 report by McKinsey, “almost every industrialised nation began its economic assent with an agricultural transformation. Recent examples include Brazil, China, and Vietnam, each of which at least doubled the value of its agriculture sector within 20 years of starting its transformation”. For Nigeria, diversification must go beyond the quest for supplementing government’s revenues and expending large quantities of scarce resources on politically expedient but unsustainable social investment programmes – and must instead be grasped as an opportunity to transform the economy for enhanced inclusive growth and balanced development for the nation.

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