THE RELEVANCE OF AGRICULTURE
Prologue Agriculture is the primary industry of any society. At the early stages of economic growth, agriculture plays
a very vital role in that it is the initial provider of employment,income and foreign exchange that can get the economy going. This was the situation in Nigeria until crude petroleum was discovered in commercial quantity in the late 1950s. In fact, it is only after agriculture has been developed beyond the subsistence level that it makes economic sense to move resources away from agriculture to manufacturing without a fall-off in the growth and productivity of
agriculture. Even at the third stage of growth of the economy as identified by Rostow, agriculture must be made to grow in tandem with manufacturing for industrialization to be sustained.
However, even without government neglect, agriculture could naturally decline relative to manufacturing because of the relatively low income and price elasticizes of demand for agricultural primary products that often create surplus output which depresses prices of agro products, the income of the farmer and consequently the returns on investment in the sector that the economy is like a tree. Agriculture is its roots; the government, including the services sector is its stem while manufacturing is its branches and foliage. Roots, as we all know, are very important part of a tree. Without the roots to hold the tree firmly on the ground and to transmit nutrients through osmosis from the earth to the foliage where the fruits are borne, the tree would be useless and may die.
Countries that are not naturally endowed with agricultural land spend fortunes to artificially develop one for agriculture. Israel is one of such countries that I know very well that continue to spend a fortune to make her land arable to sustain agricultural development. In fact, in one of my trips to that country when I served as the Executive Secretary of the Cross River State Pilgrims Welfare Board, we were shown farms in Israel. What we saw amazed us. You need to see how crops grow on land that was supposed to be arid. Israel sits on a stony topography, yet she is one of the agriculturally tuberous countries in the world, exporting maize, grapes and other fruits to some countries in Europe where the chalky soil texture there does not support the cultivation of these items. Now, in the study of the world economy, we realize that in the Israeli economy, income is fairly distributed; there is sustainable employment, industrialization and the GDP is also growing in leaps and bounds. In Israel, agriculture is next to tourism in the generation of foreign exchange, yet this is a country that supposes to lack enough food to feed her population without falling back on other countries for food aid. The Israeli economy is growing not because that country is operating a socialist economic system but because of the continuous social investment in agriculture. In Nigeria, the tradition of our economy is replete with facts that before the discovery of crude oil in the late 1950s, agriculture was the mainstay of the Nigerian economy. We were told that the sector was contributing more than 60% of the country’s export earnings and almost 100% of domestic income was also being generated from this sector up to 1969 as indicated in the table below.
But with the outlandish rise in oil prices in the world market in the post-Civil War years, the returns on investment in oil exploration and exploitation rose sharply higher than that of agriculture.(See graph above.)As a matter of wise economic decision, the Nigeria government then, faced with the mounting challenges of rehabilitating a postwar
economy, had begun to pay more attention to oil exploration and exploitation where it was able to generate enough revenue that could tide it over its public expenditure program on the rehabilitation of the post war economy. Consequently, the government had to completely divest from agriculture which had begun to bring lower returns after 1969. Consequently, resource allocation by the government which was expropriating the greater chunk of
the country’s resources began to tilt in favor of oil exploration and exploitation. In fact, in the 2nd and 3rd National Development Plan periods of 1970–1975 and 1975–1980 respectively, agriculture was allocated a paltry percentage of the total government expenditure relative to petroleum exploration and exploitation in these two development plan periods. The growth of agriculture and domestic food production in the country had accordingly begun to decline. What followed afterwards was the food crisis that erupted in the country with skyrocking food price inflation. What the country generated as revenue from crude oil exports was then used in importing food to feed the ever-increasing population of the country rather than being used in importing capital goods for domestic industrialization. Our foreign reserves, rather than grow, were often depleted through payment of mounting food import bills. Furthermore, the growth of unemployment in the economy became outlandish. The increase in rural unemployment because of the neglect of agriculture had forced the youths to migrate to the urban areas. The congestion in the urban areas did not only bring pressure on existing infrastructure there but the crime rate in the cities had increased.
Agriculture will not only generate the raw materials for the industrial goods; it will also generate the domestic income and the domestic market for these goods.
This is how far agriculture is important. From all indications, government’s decision to divest from agriculture was a grave mistake because no country, according to Thirlwall, can maintain self-esteem and be able to hold herself high among the comity of nations if such a country cannot feed her teeming population without recourse to other countries. The prologue to this article aptly explains the fact. Quite certainly, no country can ever achieve industrialization and industrial growth if, first of all, her agriculture is not developed. So the best approach to industrialization is for Nigeria to develop agriculture first and then use the foreign exchange that would be generated from agricultural export to develop the industries that would use the raw materials that would be produced by agriculture to manufacture human consumables. The country has no justification whatsoever to begin to import such things as fruit juice, tomato sauce, rice, etc. Agriculture will not only generate the raw materials for the industrial goods; it will also generate the domestic income and the domestic market for these goods. The rhetoric for justifying agriculture has become superfluous and it needs not be over-flogged here; but despite this rhetoric, government still pays little attention to agriculture.