The USAID/Nigeria Mission contracted the International Institute Tropical Agriculture (IITA) to conduct a study on identifying opportunities for increased commercialization and investment in Nigeria’s agriculture.
IITA teamed up with the University of Ibadan to implement the study. The primary purpose of the Agriculture in Nigeria (AIN) study was to provide USAID/Nigeria with the analytical basis for the Mission to design its new Agricultural Policy Strategy that contributes to unlocking constraints to commercialisation and investment in the Nigerian agricultural sector for a sustained economic growth; enhanced food security; increased competitiveness of products in the domestic, regional, and international markets; sustainable environmental management; and poverty alleviation. . The key issue in the study was the identification of constraints to investment in the agriculture sector and the evolvement of strategies and priority areas for intervention by USAID/Nigeria, other donors, the home governments and private sectors for the purpose of providing catalytic support for the flow of investment into the agricultural sector.
The AIN study is in line with both the strategic five pillars (science and technology, improved agricultural trade and market systems, building human capital, infrastructure and institutional capacity, promoting sustainable environmental management, and supporting community organizations) of the US President Initiative to End Hunger in Africa (IEHA) and the long-term USAID/Nigeria new strategic directions for a sustainable agricultural and diversified economic growth. . The country was divided in six development domains on the basis of differences in agro-ecology, population density, market opportunities, farming systems, and geo-political division of the country. 5. In this study, investment is defined as additions to stock of capital that are the sources of future income streams, while commercialization should be understood to be the movement from a subsistence roduction system to a market-based system. The importance of investment derives from the fact that agricultural growth requires increasing doses of investible fund. This fund translates into capital, which, in turn, transforms various developmental variables to create the ultimate impact, which is economic growth and development (see Figures 2. 1 and 2. 2. for schematic representations of the conceptual framework).
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The focus of analysis in the study was on constraints taxonomy, constraints domain characterization, constraints cause identification, constraints function transformation, constraints range characterization, constraints impact analysis, constraints persistence analysis, identification of gainers and losers from constraint persistence, policies, regulations and institutions analysis, investment priority determination, comparative advantage analysis, recommendation of new policies, regulations and institutions for enhancing comparative advantage and for improving investment climate, determination of strategic options for supporting IEHA interventions in Nigeria, and identification of areas of intervention to promote priority commodities in different zones of the country. 7. With respect to sources of data and methods of collection and analysis, both primary and secondary data were used in this study. Primary data were collected from selected respondents, using prepared questionnaires. Secondary data were collected from local and international publications and reports.
The methods adopted in the collection of primary data involved the use of two survey instruments (questionnaires), one addressed to policy makers and implementers and the other addressed to the private sector and other stakeholders in agriculture, like associations and individual investors. 8. The defined development domains plus Abuja Federal Capital Territory (FCT) were adopted as the primary frame for data collection. Two states were then selected per domain for the survey, in addition to the Abuja FCT. The respondents were purposively selected to cover a wide range of stakeholders in each zone. The combination of field survey methods employed included in-depth interviews, focus group discussions, individual completion of questionnaires and taped interviews. Methods of analysis included descriptive statistical analysis, constraints mapping, development domain mapping, regression analysis, and partial equilibrium models.
The assessment of agricultural policy and investment in Nigeria presented in this study covers an assessment of the performance of Nigeria’s agriculture sector, a review of past policies affecting agriculture, an assessment of investment processes in Nigerian agriculture, an analysis of constraints to private sector investment in Nigerian agriculture, and an evaluation of investment options. 10. The results of performance analysis show a mixed performance. The share of agriculture in both aggregate GDP and non-oil GDP increased only marginally in the 1981-2000 period covered. The share of total bank credit going xii into the agricultural sector first increased rapidly between the 1981-85 and 1991-95 sub-periods and then declined in the 1996-2000 period.
The share of federal government’s total capital expenditure going to the agricultural sector declined almost persistently over the period. Finally, the share of total labor force employed in the agricultural sector also declined over the period. Generally, there was a lack of consistency in the growth performance of the agricultural sector in the 1981 to 2000 period, with some evidence of unstable or fluctuating trends, probably due to policy instability and inconsistencies in policies and policy implementation. 11. Factors constraining agricultural performance in the country include those relating to technical constraints, resource constraints, socio-economic constraints and organizational constraints.
A review of past government policies in agriculture shows that in the pre-structural adjustment period, sectorspecific agricultural policies were designed to facilitate agricultural marketing, reduce agricultural production cost and enhance agricultural product prices as incentives for increased agricultural production. Major policy instruments included those targeted to agricultural commodity marketing and pricing, input supply and distribution, input price subsidy, land resources use, agricultural research, agricultural extension and technology transfer, agricultural mechanization, agricultural cooperatives, and agricultural water resource and irrigation development. 13. Macro and institutional policies as well as legal frameworks complemented sector-specific policies. The structural adjustment period was governed largely by structural adjustment policies. Broadly, structural adjustment policies in Nigeria covered public expenditure-reducing or demand management policies, expenditure switching policies, market liberalization policies and institutional or structural policies. Like in the pre-structural adjustment period, there were microeconomic, macroeconomic, institutional and legal framework policy instruments put in place to address these issues. But, there was much more emphasis on macroeconomic and institutional policies in this latter period than before. Constraints to agricultural policy effectiveness are identified to include those of policy instability, policy inconsistencies, narrow bas e of policy formulation, poor policy implementation and weak institutional framework for policy coordination.
The objectives of the new agricultural policy are the achievement of food self-sufficiency and food security, increased production of raw materials for industries, increased production and processing of export crops, generation of gainful employment, rational utilization of agricultural resources, promotion of increased application of agricultural technology, and improvement in the quality of rural life. The key features of the new policy include the evolution of strategies for achieving food self-sufficiency and improved technical and economic efficiency in food production, reduction of risks and uncertainties in agriculture, a unified national agricultural extension system under the ADPs, promotion of agro-allied industries, and provision of agricultural incentives.
The new policy direction involves creating a conducive macro -environment for private sector investment in agriculture, rationalizing the roles of tiers of government and the private sector, reorganizing the institutional framework in the agricultural sector, implementing integrated rural development programs, increasing budgetary allocation to agriculture, and rectifying import tariff anomalies in respect of agricultural products. Agricultural commercialization calls for increased investment and capital formation for more intensive production. Hence, the level of commercialization and the size of investment are positively correlated.
A review of past investment trends in the Nigerian economy reveals that both domestic and foreign flow of private investment into the Nigerian economy as a whole suffered a declining trend between 1970 and 1985. Gross investment in the economy expressed as a percentage of the GDP first increased from about 17 percent in 1970 to about 26 percent in 1975, but declined to about 24 percent in 1980 and to 12 percent in 1985. The patterns of domestic and foreign private investment over this period were highly correlated with the changing states of political and policy instability. In the post-1985 period, gross domestic investment increased consistently between 1987 and 1997, but declined in 1998 and 1999. Similarly, cumulative foreign investment increased consistently between 1990 and 1998, but declined in 1999.
Real foreign net private investment flow into the Nigeria’s agriculture sector increased between 1981-85 and 1991-95 sub-periods and then declined in the 1996-2000 sub-period. However, agriculture’s share of total foreign net private investment was very low, being on the average, less than of 4 percent in the entire 1981 to 2000 period. There were negative flows (i. e. actual outflow) of foreign investment into agriculture in 1980, 1995, 1987 and 1994. Agriculture’s share of cumulative foreign investment declined almost consistently in the 1981-2000 period, from about 2 percent in the 1981-85 sub-period to about 1 percent in the 1996-2000 sub-period.
The pattern of both domestic and foreign investment in Nigeria in the period under review tended to be volatile, displaying highly variable growth rates and high degrees of instability. This pattern was a direct reflection of the generally unstable investment climate in the country in the period. A comprehensive summary of the economic, social, political, institutional, legal/regulatory and external environmental determinants of private investment flow into the agricultural sector is provided in the report. Levels and trends of investment in Nigeria’s agriculture show that gross fixed capital formation was used as a proxy for gross domestic investment. In this regard, gross fixed capital formation’s share of the gross domestic product declined consistently over the 1981-2000 period.
However, agricultural sector’s share of aggregate gross fixed capital formation increased consistently over the 1981-2000 period, implying that the sector performed better than the economy as a whole in terms of gross fixed capital formation. Thirteen categories of constraints to investment in the agriculture sector are identified from both literature search and stakeholders’ perspectives. Infrastructural constraints (bad or poor state of roads, poor processing facilities and marketing outlets, epileptic power supply, poor state of telecommunication facilities, etc. ) were ranked first by more than 90% of respondents throughout the Federation.
It was followed, in decreasing order of importance, by financial, technical, and economic constraints (;80% of respondents); macro-economic policy and socio-cultural constraints (;70%); labor, environmental, and political constraints (;50%); micro-economic policy, institutional, health, and land tenure constraints (;50%) The severity of constraints was varied among development domains except for infrastructural constraints. For example the technical constraints were assessed very high (;75% of respondents) in the far northern zones while environmental constraints were very high in Southeast Domain. The intensity of the economic constraints (high cost of production, low returns to investments, or low income, etc. ) was very high in Northeast Domain. Socio-cultural constraints were found everywhere such as corruption, insecurity, high crime rates, and ethnic strife/crisis.
Religious strife for northern domains and availability of mineral resources especially crude oil were found to be elements of ethnic strife. The causes and source of constraints were investigated for each constraint. For example poor credit policy coupled with ineffective policy implementation, high rate of interest and unstable exchange rate were the main causes of the persistence of financial constraints to investment in agriculture. Poor leadership, political instability, poor governance, and non-participatory governance were sources of political constraints. An example of technical constraints is on inconsistencies in agricultural input policies that constrained producers, including small-scale farmers to acquire modern farm inputs. Gainers and nature of gains from the persistence of constraints were identified. Within Nigeria, gainers include government officials (political appointees, policy makers, policy implementers, and lower cadre civil servants). They derive benefits ranging from hard currency, receipt of financial kickbacks from suppliers and contractors. At the foreign level, the main gainers from the persistence of above constraints in Nigeria are some of the foreign investors, technical partners, and foreigners who take advantage of the precarious situation. This group of gainers imports all sorts of goods to derive/make non-deserved maximum benefits.
Losers include a long range of stakeholders. Entrepreneurs, marketers and processors are affected in the area of low capacity utilization, high cost of power generation, and reduced output. bankers, lenders are also affected by the persistence of financial constraints. The nature of these losses includes high transaction costs, low investment, lack of investible capital, and loss of employment. Farmers and women are among the vulnerable groups of the society. Farmers’ losses include low access to modern inputs, reduced outputs, low income, and high poverty incidence. About 33 types of effects of constraints to commercialization were identified along the food chain.
There are 13 areas in which investors (foreign and domestic investors) are willing to put their money in attractive enterprises. These are: input production and supply enterprises, livestock production, fisheries, forestry, and commodity processing and storage enterprises. Others are commodity marketing, agro-industry manufacturing, agricultural commodity export, and agricultural support services. The general inference is that agricultural enterprises in Nigeria are fairly attractive to domestic investors while they are less attractive to foreign investors. Nine out of the thirteen enterprises are hardly attractive to foreign investors while three were fairly attractive. xiv 29.
The study identified 32 commodities in which the Development Domains are perceived to have a comparative advantage in the domestic, regional, or world market. The identified commodities were grouped into five categories namely staple crops (9 commodities), industrial crops (12 commodities), livestock (5 commodities), fishery (3), and forestry (5). Reasons for the attractiveness to private sector investment were given for each commodity. Ex-ante evaluation of returns to investment was completed for 26 commodities for which data were readily available (for example all the forestry commodities did not enter the partial equilibrium DREAM model because of lack of data).
Given the current level of the technology portfolio available for each commodity, cassava emerged as commodity 1 to invest on for estimated gross returns of $570 m per year over the period of 17 years from 1999 to 2015. The next nine ranked commodities are yam, maize, millet, groundnut, rice, sorghum, poultry, leafy vegetables, and cowpea. The second group of priority commodities includes pepper, beef, oil palm, fish, melon, tomato, soybean, onion, rubber, and cocoa. The lower ranked commodities include ginger, pork, goat, mutton, benniseed, and cashew nut. The above results compare favourably with results from a similar analysis by IFPRI in West Africa.
The first ten ranked commodities were yams, rice, cassava, vegetables, beef, millet, groundnut, sorghum, cotton, and maize in decreasing order of importance. Major regional differences were recorded in the returns to investments. For root and tubers, cassava gives highest returns in North-central, Southsouth, Southeast, and Southwest in decreasing order of returns. Yams stand high in North-central, followed by South-south. Patterns are uneven for cereals: rice is exclusive in Northcentral; maize is better promoted in Northwest, Northcentral, and Southwest. Millet is profitable only in Northwest and Northeast. Sorghum and benniseed are crops for the three northern Domains. Grain legumes (groundnut, soybean, and cowpea) give high returns in the three northern Domains.
The patterns for grain legumes were observed for the group of vegetables except for leafy vegetables that grow well throughout the country. As expected, tree crops such as oil palm (South-south and Southeast), cocoa (Southwest), and rubber (Southsouth) produce better in the humid domains of the country. In contrast, cashew nut and ginger are commodities for Northcentral and Northwest. Livestock also indicates a specialization across Development Domains. Ruminants (cattle, mutton, and sheep) are important in the three northern Domains though goat has a smaller but significant presence in the southern Domains. Pork and fish are important in South-south. As expected, poultry is found everywhere with a major presence in South-south.
In addition to investments in commodities with high returns to investments, other strategies for increased commercialization include the adoption of a development model that links producers to processors and consumers along the continuum. Four possible models are suggested in this paper. Strategies for mitigating negative impacts of commercialization on gender and equity include but not limited to promoting the facilitation of women’ involvement in downstream activities, better education for girls, and empowerment of women through income-generating activities and the creation of marketing lobbies for women. Strategies for enhanced food security include ncreasing the agricultural productivity, reducing post-harvest losses, promoting a database for early warning systems, and building capacity of government officials in monitoring the status of food security in the country. Increased commercialization in the agriculture sector is likely to pose threat to environment through land degradation, pollution of the ecosystem, or the extension in the use of other agricultural resources. Sectoral policies for specific priority commodities would be needed to attract investment towards a commodity through the promotion and creation of lobbying groups, design and adoption of grades and standards that favor the utilisation of the commodities, and the creation of an enabling macro-policy environment in the country.
Three regional development hubs are being recommended to USAID for consideration for their investments: the northern development hub, the central development hub, and the southern development hub. These regional hubs are made to integrate the designed strategies for increased investment and commercialization in Nigeria’s agriculture. The regional development hubs would be centred on a group of priority commodities and would aim at integrating the objectives of wealth creation, food security, sustainable development, equity, and gender. Finally, three studies are recommended in order to move forward in the implementation of the above strategies namely a subsector concentration analysis, a downstream agricultural activities study, and an integrated monitoring and evaluation program design.
Socio-economic and Development Challenges in Nigeria’s Agriculture Nigeria is one of the largest countries in Africa, with a total geographical area of 923,768 square kilometres and an estimated population of about 126 million (2003 estimate). It lies wholly within the tropics along the Gulf of Guinea on the western coast of Africa. Nigeria has a highly diversified agro-ecological condition, which makes possible the production of a wide range of agricultural products. Hence, agriculture constitutes one of the most important sectors of the economy. The sector is particularly important in terms of its employment generation and its contribution to Gross Domestic Product (GDP) and export revenue earnings. Despite Nigeria’s rich agricultural resource endowment, however, the agricultural sector has been growing at a very low rate. Less than 50 percent of the country’s cultivable agricultural land is under cultivation. Even then, smallholder and traditional farmers who use rudimentary production techniques, with resultant low yields, cultivate most of this land. The smallholder farmers are constrained by many problems, including those of poor access to modern inputs and credit, poor infrastructure, inadequate access to markets, land and environmental degradation, inadequate research and extension services and so on.
Since the collapse of the oil boom of the 1970s, there has been a dramatic increase in the incidence and severity of poverty in Nigeria, arising in part from the dwindling performance of the agricultural sector where a preponderant majority of the poor are employed. Furthermore, poverty in Nigeria has been assuming wider dimensions, including household income poverty food poverty/insecurity, poor access to public services and infrastructure, unsanitary environment, illiteracy and ignorance, insecurity of life and property, poor governance and so on (NPC and UNICEF, 2001). In response to the dwindling performance of agriculture in the country, governments have, over the decades, initiated numerous policies and programs aimed at restoring the agricultural sector to its pride of place in the economy.
But, as will be evident from analyses in subsequent chapters, no significant success has been achieved, due to the several persistent constraints inhibiting the performance of the sector. From the perspective of sustainable agricultural growth and development in Nigeria, the most fundamental constraint is the peasant nature of the production system, with its low productivity, poor response to technology adoption strategies and poor returns on investment. It is recognized that agricultural commercialization and investment are the key strategies for promoting accelerated modernization, sustainable growth and development and, hence, poverty reduction in the sector.
However, to attract investment into agriculture, it is imperative that those constraints inhibiting the performance of the sector are first identified with a view to unlocking them and creating a conducive investment climate in the sector. The development challenges of Nigeria’s agriculture are, therefore, those of properly identifying and classifying the growth and development constraints of the sector, unlocking them and then evolving appropriate strategies for promoting accelerated commercialization and investment in the sector such that, in the final analysis, agriculture will become one of the most important growth points in the economy.
Focus of Nigeria’s Agricultural Development Priorities In spite of the existence of a well-articulated agricultural policy document for Nigeria since 1988, the country has never established a systematic focus in her agricultural planning history that shows a conscious effort to purposely prioritise her agricultural development based on the generally identified components that constitute modern agriculture. Normally, in terms of concentrating on the development of the various parts of the agriculture continuum, the government of Nigeria (GON) should have adopted a prioritization scheme in which, for some specified time periods, it would consciously emphasize on one or more of the areas of commodity production, commodity processing (to add some value), commodity marketing (for either internal commercialization or external trade or both), and institutional support services for agro-industry.
What has happened instead is that, over the years, there has been the development and adoption of programs that tended to generally support only increased production of commodities in the country. Such programs have included among others the following key ones: ? Farm settlement schemes (FSS) in the early-to-mid 1950s for creating farmsteads of the Israeli Moshav type agriculture intended to increase commodity output and create employment for young school leavers; 1 River basin development authorities (RBDAs) for the purpose of harnessing water resources for farmers throughout the country; Green revolution scheme (GRS) that encouraged all Nigerians in both urban and rural areas to go into agriculture for both commerce and provision of food for home consumption; and Agricultural development programs (ADPs) in all States of the federation to help organize farmers into more productive agriculture through the provision of modern inputs. Each of these programs/schemes succeeded in momentarily increasing food production only. There were no inbuilt components that purposely catered for the processing and/or commercialization of the food output. Thus, understandably, they failed as efforts aimed at developing the agriculture sector. Recent attempts that have recognized agriculture’s current level of performance and the fact that every aspect of Nigeria’s agriculture sector needs attention have only listed specified areas that require attention.
For example, the 2001 Rural Development Sector Strategy identifies the following areas for immediate attention if agriculture and rural development in Nigeria are to make the desired impact on the lives of t he people: ? Institutional restructuring and role reassignment in the agricultural extension sub-sector; ? Agricultural technology development and natural resources management; ? Physical and social infrastructural development; ? Public intervention in specified areas of rural agriculture to measure effectiveness; and ? Human capacity building in the agriculture sector. Similarly, the 2002 Agricultural Policy document that has listed the new directions that agricultural development in the country should take has also only listed the various components of the agriculture sector without any attempt at prioritising the components.
So, in both cases, there is no directed effort at specifying which areas should be the priorities and for what periods so that efforts in developing the agriculture sector can be programmed in a systematic manner, indicating desired impact indices that must be attained within such periods. One of the key recommendations in the investment strategies that are suggested in this report deals with the order of priorities that efforts in developing Nigeria’s agriculture must take if there must be positive felt changes in the sector. The key issues involved in such prioritization are highlighted and discussed in detail in various sections of this report based on field data and information analysis from the six geopolitical zones of the country. 1. Scope and Objectives of the Study The primary purpose of the study is to provide USAID/Nigeria with the analytical basis for the Mission to design its new Agricultural Policy Strategy that contributes to unlocking constraints to commercialization and investment in the Nigerian agricultural sector for a sustained economic growth; enhanced food security; increased competitiveness of products in the domestic, regional, and international markets; sustainable environmental management; and poverty alleviation. The study addresses the immediate needs of the Mission of identifying key investment options in various geographic areas of Nigeria. In this respect, the study provides short- and long-term strategic support to USAID/Nigeria that enables the Mission to plan, monitor and evaluate its agriculture portfolio. It provides an analytical basis for identifying key investment options and also monitoring and evaluating the impacts of such investments.
The specific objectives of the study are, therefore, to: (i) Review previous studies on constraints to commercialization and investment in Nigeria’s agriculture; (ii) Define development domains within the Nigerian political economy framework; (iii) Identify technical, infrastructural, economic, political, social, policy, and institutional constraints to commercialization and investment in Nigeria’s agriculture; (iv) Explain the persistence and assess the effects of the identified c onstraints to commercialization and investment in Nigeria’s agriculture over time and from regime to regime within a political economy framework; and (v) Assess the investment options and design appropriate short- and long-term strategies for mitigating the effects of the identified constraints. The implications, data required, etc. of the above objectives are summarized in Table 1. The Interface among the study, IEHA and USAID/Nigeria Strategic Objectives The study is in line with both the new US President Initiative to End Hunger in Africa (IEHA) and the Mission Strategic Objectives for years 2004-2005.
Recently, the UN adopted the Millennium Development Goals (MDG) that aim at cutting hunger and poverty in half by 2015. IEHA is being launched to contribute to MDG of halving 2 hunger by 2015 in Sub-Saharan Africa (SSA). The IEHA focus is on smallholder-based agriculture because only the small farmers can contribute to ending hunger in SSA. However, the IEHA approach is to ignite an economic growth of the agricultural sector to rapidly raise rural incomes and consequently reducing poverty and hunger. Its programmatic concentration is on six focal areas (science and technology, market and trade, producer organisations, human and institutional capacity and infrastructure, vulnerable groups, and environment).
IEHA intends to capitalise on regional dynamism and synergism. Therefore, IEHA has selected a few focal countries with potentials for spillover effects in their respective sub-regions. In these focal countries, investments will be based on a rigorous analysis of agricultural investment options. The rigorous analysis requires the development of a strategic and knowledge support system that could guide IEHA investments in Africa and that could help monitoring and evaluation of IEHA projects in a sub-regional context (e. g. East Africa, Southern Africa, and West and Central Africa). The USAID Mission in Nigeria has just adopted a concept paper about the long-term development strategy for Nigeria.
This concept note describes four strategic objectives (SOs) that would guide its intervention in Nigeria namely good governance through transparency, participation, and conflict management (SO5), sustainable agricultural and diversified economic growth (SO6), improved social sector service delivery (SO7), expanded response to HIV/AIDS prevention (SO8). SO6 is in particular directly relevant to. The new program framework for SO6 intends to improve the performance of the agricultural sector in the areas of production and productivity, commercialization, and environmental sustainability. In addition to agriculture, the other sectors of a paramount importance for SO6 are increasing the private sector’s access to critical financial services and improving the environment for private sector growth.
The AIN study, as described in its above scope and objectives, is in line with both IEHA and the long-term USAID/Nigeria new strategic directions for a sustainable agricultural and diversified economic growth. The focus of the study is on agriculture that is dominated by smallscale farmers. The study will be based on a rigorous analysis that also gives voice to stakeholders. The study team will combine the art of science and technology and the field experience of stakeholders, including producer organisations to implement the study. Its outcomes will contribute to improving our understanding of constraints that mitigate against increased commercialisation and investment in Nigeria’s agriculture.
Therefore, the study will provide a strategic information for the USAID/Mission and IEHA to design programs and projects that would contribute significantly to the achievements of objectives of wealth generation, poverty elimination, and ending of hunger in Nigeria. 1. 5 Plan of the Report Following chapter one, chapter two discusses the conceptual framework and methodology of the study. Chapter three examines the performance of Nigeria’s agriculture. Chapter four is on the review of agriculture policy. Chapter five focuses on the assessment of investment in Nigeria’s agriculture. Chapter six examines constraints to private sector investment in Nigeria. Chapter seven identifies investment options in Nigeria’s agriculture.
Finally, chapter eight contains recommendations that arise from the study. Review previous studies on constraints to commercialization and investment in Nigeria agriculture Table 1. 1. To critically examine past studies in order to identify gaps in the understanding of constraints to commercialization and investments in Nigeria agriculture. To classify Nigeria on the basis of biophysical, socioeconomic and political considerations. Literature Analytical technique Narrative descriptive Sources of data Library search Expected output Identifica-tion of gaps in knowledge 2. Define development domains within Nigeria political-economic framework . Identify technical, infrastructural, economic, political, social, policy, gender, and institutional constraints to commercialization, and inves tment in Nigeria agriculture. Explain the persistence and assess the effect of the identified constraints to commercialization and investment in Nigeria agriculture over time and from regime to regime within political economic framework. To recognize and prioritize the different constraints States in Nigeria agro-ecology and climate market access population agricultural practices Different constraints identified by sources, types, and domains GIS and descriptive statistics
IITA, FOS, FMARD, Library search Maps of development domains Descriptive analysis Library search, Field survey List of prioritized constraints .To understand the nature, extent and dynamics of these constraints to commercialization, and investment in Nigeria agriculture. To analyze the effects of the identified constraints on commercialization, and investment in Nigeria agriculture. Assess the investment options.To identify the investment options in each development domain To analyze the effects of Level of investment by product, extent of commercialization by pro duct, origin of constraints, extent of the constraints i. e. ow bad is the situation e. g. telecommunication, road network (quantity and quality), markets, and their facilities, health care facilities, educational facilities etc. Both crosssectional and ti me series data will be required List of commodities, prices, production, consumption, elasticities of production and demand, Descriptive statistics, regression, inputoutput analysis, scoring/ran -king mapping Field survey, CBN reports, FOS, infrastructure survey, MAN, NACCIMA, ADP, National Data Bank, Input-output table 1. Output of political framework indicating the inventories of gainers and losers. 2. factors that has perpetuated the constraints 3.
Maps of relative inventory of constraints. Returns to items of priority commodities in each development DREAM, descriptive statistics, regression Primary data, survey, secondary data from FOS, 4 each investment option on welfare in each development domain. (iii) On the basis of analysis, rank the investment options. 6. Design appropriate short and long term strategies for mitigating the effects of the identified constraints (i) Identify and rank short and long term strategies for mitigating constraints. amount to be spent on each investment option. analysis and ranking/ scoring CBN, IITA and other past studies for elasticities. domain. Findings of the study from items 1-5. Narrative Reports from 1-5 List of short and long term strategies.
Conceptual Framework and Methodology
Conceptual Framework The challenge facing Nigeria is to eradicate poverty, attain food security, agricultural competitiveness and the sustainable management of the environment through accelerated commercialization and investment in Nigeria’s agriculture. The approach is to rely on marketed oriented agriculture that relies primarily on the private sector for the needed investment and commercialization of agriculture. Investment in this study is defined as additions to stocks of capital that are the sources of future income streams.
This study takes a generalized approach to capital that includes real tangible physical capital such as dams, irrigation structures, grain silos, farm machinery and implements, hoes, machetes, and rural roads. It also includes social capital such as human capital through education and health, and on-the-job training through intergenerational transfer of farming ski lls. This generalized approach to capital formation and investments also includes institutional capital accumulated through investments in organizations and the regulatory environment. Investment can be gross, including investments to replace depreciated capital " stock, or it can be net, to include only net additions to the capital stock.
It can be referred to as net capital formation as with expenditures on new farm machinery, irrigation infrastructure, storage facilities, etc over and above the requirements for the replacement of existing capital, which are used in the production of goods and services for future use as opposed to present consumption. From a broader perspective, investment can be viewed as sacrificing certain present values of consumption for future consumption. It is the commitment of money in order to earn future benefits. . Fixed investment is defined as purchases by firms of newly produced capital goods such as production machinery, newly built structures, office equipment etc. Inventory investment on the other hand is the change in stock of finished products and raw materials firms keep in their warehouses.
Replacement investment is investment made to replace worn out capital goods resulting from their use in the production process. It is also known as disposable investment. In this study investment can be from public (government), and/or the private sectors, which can be foreign and/or domestic. Commercialization, on the other hand, is the movement from a subsistence production to a market-based system of production. It involves raising the cash earnings of small-scale agricultural-related enterprises. Commercialization can be brought about by increasing the unit of output, raising the value added or both, and producing for domestic and foreign markets. Commercialization is, however, contingent upon the availability of both input and output markets.
This assumes inter-sectoral linkages within the economy as the inputs needed for commercialization are obtained from the different sector of the economy or from abroad while the outputs from commercialization are also distributed to the s different sectors of the economy or to abroad. In a fundamental sense, a conceptual framework provides a guide to the organization of ideas and issues in a study. It acts as a filing cabinet for sorting ideas and issues into neat compartments - As such, a conceptual framework must derive its validity from the objectives of a study while it, in turn, guides the study towards the achievement of its objectives.
In its broad perspective, the overarching research issue in this study is the dynamics of investment flow for the development of the agricultural sector of the economy. The importance attached to investment flow for agricultural development derives from the theoretically and historically valid assumption that the sector requires an increasing 6 dosage of investible capital from all feasible sources. This capital translates into investment, which, in turn, transforms various developmental variables in and outside the agricultural sector to create the ultimate impact, which is economic growth and sustainable development. The relationships among the variables are very complex.
But in order to capture the essential highlights of these relationships, a schematic representation of the patterns of interactions among major variables is depicted in Figure 2. 1. As shown in Figure 2. 1 investible capital kick-starts the process that ultimately leads to agricultural growth and overall sustainable livelihood of households operating in the agricultural sector. The process, as depicted in the chart is a follows. Investible capital, which is made up of both private and public capital, flows in from foreign private and public sources as well as from domestic private and public sources. 2. This capital from various sources creates investment that, in turn, creates increasing commercialization and employment and generates increasing outputs of various kinds as driven by the pattern of demands.
Agricultural outputs come from corporate business organizations as well as from individuals or groups of producers, corporate outputs generate corporate profits that are distributed in various ways. Part of the profits is ploughed back into further investment; part goes to households say, as dividends; part constitutes a leakage from the economy, say, as profit repatriation from the country by investors.
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