1.0 Chapter one

Introduction

1.1 Background to the study

According to Verter (2015) An important factor in a country's growth and development is its agriculture. The agricultural sector is vital to the nation since it generates income for the government in addition to providing food supplies. It is impossible to overstate its significance. Macro and micro-level agricultural operations have a compounding effect on a country's industrial and socioeconomic growth. Nigeria is primarily agrarian with its abundant land and resources. Despite the rapid growth of the oil industry over the years, agriculture accounted for 40% of GDP and provided employment (both formal and informal) for about 60% of the nations over 200million people(Osakwe 2015). Nigerian agriculture is still mostly a subsistence industry, with rural farmers producing 80% of the country's agricultural output and subsisting on less than $1 per day from farming less than a hectare (2.47 acres). Nigeria can start its own green revolution thanks to the country's varied agro-ecological characteristics, which can support a range of farming practices. But over time, administrations have failed to prioritise agriculture and diversify the economy to lessen reliance on the capital-intensive oil sector. Nigeria was the biggest net exporter of agricultural products and a significant source of income prior to the discovery of oil. If agricultural policies receive enough attention, Nigeria has the potential to revert to its past status (Verter 2015). Agriculture still contributes significantly to the GDP (gross domestic product; total labour force) and is therefore linked to many other economic sectors. It is also necessary for fostering broad-based growth and development (Verter 2015).

In 2001, 41% of GDP came from agriculture export, employing 6% of the labour force, most of whom worked on tiny farms. Nigeria is 98.3 million hectares in total size. Less than 1% of the arable land is irrigated, and only about 48% of the cultivable area is really under cultivation(Gupta 2017). During the 1950s and 60s, 60–70% of all exports came from the agricultural sector. At that time, the state was a significant exporter of groundnuts, cotton, cocoa, palm oil, and rubber. A growth rate of 3–4% per year was attained for food and agricultural export crops. From 1970 to 1974, taxes on agricultural exports were a major source of government revenue, and agriculture also had considerable influence on the current account and fiscal balances.

The average annual growth rate of agricultural exports fell by 17% between the mid-1970s and the mid-1980s, and by 1996, agriculture made up just 2% of all exports. The nation became a net importer of some of the commodities it had previously exported as agricultural exports decreased from the customary 12–15 commodities of the 1960s. Additionally, there was no discernible growth in the market for the country's agricultural exports because nearly all of them continue to flow to the European Union in their original form, with little to no added value (Daramola, 2004). The oil price shocks of 1973–1974, as well as 1979, which led to significant revenue inflows and the neglect of the agricultural sector, were the primary reason of the drop in agricultural exports. Due to the decreased competitiveness of agriculture as a result of this phenomenon, the country started importing certain agricultural products that it had previously exported as well as other food crops with which it had been self-sufficient..

Exporting agricultural products has been essential to economic growth since it has brought in the foreign capital required for other capital development initiatives. According to Ekpo and Egwaikhide (2015), In the 1960s, considerably over 75% of all yearly commercial exports came from agricultural export items. Nigeria was the top exporter of groundnuts, cocoa, and palm kernels, and it came in second place to Ghana in terms of cocoa imports. Over time, there has been variability in the correlation between Nigeria's growth and agricultural exports. Agricultural productivity peaked in the 1970s and then declined at an average annual rate of 2.2% from 1971 to 1979 (Yaqub, 2010). Due to the fact that exported crops were now being imported into the economy, agricultural exports stagnated between 1980 and 1994. A modest growth in agricultural export occurred between 1995 and 2001 as a result of the implementation of certain initiatives, such as the Agricultural and Rural Transformation Programme (ARTP) 2000 and the Family Support Programme/Family Economic Advancement Programme (FEAP) 1996. Other successful changes to agricultural policies were made, and data on productivity shows that agricultural output has been rising. It was 208.4 in 2007 and 222.0 in 2008, and it increased from 237.1 in 2009 to 250.6 in 2010 to 264.08 in 2011 and then increased even further to 274.9 in 2012. The GDP contributions from agricultural exports have been greatly impacted; Nigeria's reliance on oil has blinded other economic sectors that, when joined with the agricultural sector, might significantly impact the country's growth and development. Inadequate mechanisation of agriculture, delays in the delivery and distribution of fertilisers and other farming inputs, pests and diseases, as well as the cassava mosaic disease outbreak in some southern states, were some of the other factors contributing to agriculture's poor performance (CBN, 2012It had a significant impact on agricultural product exports because exportation is based on productivity levels; as a result, Nigeria went from being a net exporter of agricultural products to becoming a major importer of the same goods. This was especially noticeable from 1973 to 1982. Additionally, if agricultural exports rose but made no appreciable additions to GDP, the GDP would only rise very little, if at all. All these fluctuations in agricultural exports must have translated to some effect on growth (GDP).

Nigeria's agricultural sector has numerous obstacles that affect its output, notwithstanding its economic contribution. These include degrading land, inadequate irrigated farming, inadequate land tenure systems, and climate change. Other factors include inadequate technology, expensive production costs, unequal input distribution, insufficient funding, significant post-harvest losses, and difficult market access. Due to these difficulties, agricultural production and exports of agricultural products have been hindered, which has reduced the sector's GDP contribution. Additionally, as the population has grown, food imports have increased, leading to a decline in levels of food sufficiency. For example, Nigeria's total agricultural imports between 2016 and 2019 were N3.35 trillion, four times more than the country's agricultural exports of N803 billion over the same period. The Agriculture Promotion Policy (APP), Nigeria-Africa Trade and Investment Promotion Programme, Presidential Economic Diversification Initiative, Economic and Export Promotion Incentives, and the Zero Reject Initiative are just a few of the initiatives and programmes the government has put in place to address the situation. Other initiatives include the Nigeria Erosion and Watershed Management Project (NEWMAP), the Action Against Desertification (AAD) Programme, and Reducing Emission from Deforestation and Forest Degradation (REDD+). In order to provide enough food to meet domestic need and an abundance of commodity crops for export on the global market, all of these efforts strive to enhance agricultural production and export; nevertheless, they have produced very little. It is to this the study centres on challenges of exporting agricultural product in Nigeria.

1.2 STATEMENT OF THE PROBLEM

The Nigerian agricultural export sector are faced with many challenges which include poor infrastructure, lack of government for the sector as a result discovery natural resources such as oil. Nigeria's two major ports, Apapa and Tin Can ports, are responsible for processing the bulk of trading activities in the country, but infrastructure and logistics challenges continue to impact export, as well as import activities. A survey conducted in 2018 showed that Nigeria loses about $10 billion on Agricultural exports due to gridlock at the port . The gridlock has led to refusal by buyers to renew contracts and in dire cases, outright cancellation of contractual agreements. Due to the perishable nature of agricultural produce, there are substantial post-harvest losses as a result of inadequate, contemporary storage facilities. Nigeria's post- harvest losses are estimated by the Federal Institute of Industrial Research, Oshodi (FIIRO) to be $9 billion a year. Similarly, the nation's insufficient farm produce distribution network from the key food belts is having a detrimental effect on the country's agricultural exports, both in terms of quantity and quality. The majority of Nigerian agricultural products are of poor quality. Poor management of agricultural products during the pre- and post-harvest periods, pest and disease attacks on crops, and overuse of pesticides for preservation purposes are the causes of this. The Nigeria Agricultural Quarantine Services (NAQS) has failed to implement suitable risk management measures and provide necessary guarantees on agricultural products leaving the country's shores in order to avoid strained relations with trading partners. This is because of growing globalisation and an increasing emphasis on the quality of agricultural products, which is measured against international food safety procedures. It is to this the study centers on challenges of exporting agricultural products.

1.3 Objectives of the study

The General Objective Of The Study Is to examine the challenges of exporting agricultural products , Other Specific Objectives Include to:

1)To examine the impact of agricultural export on Economic growth of Nigeria

2)To outline the constraints/challenges affecting export of agricultural products in Nigeria

3) To recommend ways in which the government can help promote Agricultural export in Nigeria

1.4 RESEARCH QUESTIONS

1)What is the impact of agricultural export on Economic growth of Nigeria?

2)what are the constraints/challenges affecting export of agricultural products in Nigeria?

3) what are the ways in which the government can help promote Agricultural export in Nigeria?

1.5 SIGNIFICANCE OF THE STUDY

The study of the challenges of agricultural export is significant and important, for this knowledge, it will enable the policy makers to formulate appropriate policies that will aim at improving and tackiling problems facing exportation of Agriculture products. This study is also important and significant in that it will examine the various ways of improving Agriculture outputs and exportation. Since not so much works have been done on the contributions of non-oil exports to Nigerian economic growth, this study will be of great importance.

1.6 SCOPE AND LIMITATION OF THE STUDY

The Study Is Delimited To Challenges Of Exporting Agricultural Products

1.7 METHODOLOGY

1.7.1 Research Design

 In this study, the research adopts systematic qualitative content analysis as its method. Therefore, the documents such as newspapers, textbooks, journals, articles and other written records based on Challenges Of Exporting Agricultural Products in Nigeria. Therefore, the method of data collection for the research/study is secondary. 

1.8 ORGANIZATION OF THE STUDY

The present report is divided into five chapters. First chapter gives the introduction, back ground to the study, statement of the research problem ,research questions, objectives of the study, significance of the study, scope of the study, definition of terms and organization of the study

Second chapter deals with relevant studies found in the literature and that are related to the study which includes the conceptual discourse, review of studies theoretical framework of the study etc. Third chapter deals with the challenges of exporting agricultural products. Fourth chapter deals with the comparative analysis of the research questions. Finally Fifth chapter deals with Summary, conclusions and recommendations which are derived from this study.

1.9 OPERATIONAL DEFINITION OF TERMS

Agriculture: Agriculture encompasses crop and livestock production, aquaculture, fisheries and forestry for food and non-food products. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people to live in cities.

Exports: An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an exporter; the foreign buyers is an importer.

Products: In marketing, a product is an object, or system, or service made available for consumer use as of the consumer demand; it is anything that can be offered to a market to satisfy the desire or need of a customer.