REVIVING AGRICULTURAL SECTOR TO CURB THE CURRENT DWINDLING OIL REVENUE ON THE ECONOMY A CASE STUDY OF MINISTRY OF AGRICULTURE
1.1 BACKGROUND OF THE STUDY
Generally, agriculture comprises the main fields of human activity concerning the primary production of food and cash crops, livestock, fishing, forestry and marketing of the product. The role of agriculture in any economy is very well articulated in the relevant literature. For developing countries, it can promote economic development by increasing availability of food and releasing labour for the industries. It can expand the size of the domestic market for industrial goods. It raises the level of savings and capital formation while also earning foreign exchange from export. In the case of Nigeria, the agricultural sector has also generated development capital, revenue for the government, employment for labour because economic activities are still predominantly.
However, at the dawn of the 1970s the bubbles burst. Agriculture lost its dominant position to crude oil and natural gas in terms of contribution to GDP, the export basket, foreign exchange earnings, government revenue and so on. Output deteriorated and the sector generally stagnated the food situation became disturbing and almost alarming to the extent that, Nigeria, was once one of the leading producers of certain agricultural goods became an importer of some of the same product especially food grains.
Oil revenue has been and still is the mainstay of the national economy and is likely to remain so, for so long time to come as it currently provides the bulk of government revenue and most of the foreign exchange earnings. It present crude oil exports account for about 90 percent of foreign exchange and 80 percent of government revenue. Thus making the country economy heavily reliant on the petroleum sector. This dominant role coupled with inadequate management of oil revenue during periods of windfall has pushed other productive sectors like agriculture, the traditional mainstay of the economy from the early fifties and sixties to the background thus exposing the country to volatility in the crude oil market for a monoproduct economy like Nigeria, it is not unprecedented. Therefore, that a sudden and sustained decline in the price of the product will impact the country’s revenue negatively. No wonder the former Central Bank Governor, Sanusi Lamido Sanusi in 2011 stated that “our major concern is that a major decline in the price of oil will lead to a massive depreciation of the currency”.
This research work intends to examine possibly how reviving the agricultural sector could help ameliorate the dwindling oil revenue in the economy.
1.2 STATEMENT OF THE PROBLEM
One of the major problems or tasks of the current administration has been embattled with, is how to contend, how to finance the 2016 budget in the wake of low oil price and rising threats from declining revenue. This becomes very critical when viewed against the backdrop of the tough economic conditions witnesses over the last couple of months in the country especially in the area of declining crude oil and gas receipts and Federal Government inability to meet some of its financial obligations.
This status quo is becoming problematic and worrisome owing to the sole fact that Nigeria is heavily dependent on oil revenue as its major source of revenue. As rightly observed by Chris Bredenhann (2016) ‘Those whose economic are not well diversified will be hardest hit and may have to consider Austerity Measures’.
Additionally, this situation has drastically affected the country’s revenue as it is evident in virtually all the sector of the economy, predominantly with, like, the prices of items etc it is however against this backdrop that this research work intends to beam it searchlight into investigations on how effectively and efficiently agriculture can be used to ameliorate this situation taking into cognizance of numerous advantages accurable to agriculture practice in the economy.
1.3 OBJECTIVES OF THE STUDY
The following are the main objectives of this research work;
- To examine strategies of reviving agricultural sector to replace the dwindling oil revenue.
- To examine the impact of agricultural production on Nigeria economy.
- To examine ways of improving agricultural output in the economy.
- To examine the problems militating against productive agricultural sector.
- To recommend measures to overcome the challenges associated with reviving agricultural sector in Nigeria.
1.4 RESEARCH QUESTIONS
- What are the strategies for reviving agricultural sector to replace the dwindling petroleum oil revenue?
- What are the impacts of agriculture in economic development?
- In what ways could agricultural productivity be improved in our economy?
- What are the various constraint that impede agricultural sector?
- What measures would you recommend for reviving agricultural sector on the economy?
1.5 STATEMENT OF HYPOTHESES
The following hypotheses have been formulated to guide this research work:
1. Ho: Mechanized agricultural practice is not