Academic journal article Journal of Competitiveness Studies

Competitiveness of the Food Crop Production System in Nigeria: A Policy Analysis Matrix Approach

Academic journal article Journal of Competitiveness Studies

Competitiveness of the Food Crop Production System in Nigeria: A Policy Analysis Matrix Approach

Article excerpt

INTRODUCTION

In all parts of the world, a major concern is the eradication of poverty and hunger, which is also one of the Millennium Development Goals (MDGs). Extreme poverty effects individuals whose income is less than a dollar per day (Pacari & Marina, 2009). Between 2004 and 2009, there was 6% reduction in extreme poverty from 41% to 35%. However, production of some food crops are still declining and chronic hunger still exists in some parts of the world (Khanal, 2011). In addition, agricultural contribution to GDP has been reduced by 32.8% across the globe (Khanal, 2011).

Because of this, the focus of the federal government of Nigeria is on transforming the economy through an agriculturally industrialized economy, to create wealth, jobs and markets for farmers and to revive the rural economy. About 70% of Nigerians are engaged in the production of food crops such as maize, millet, rice, yam and cassava (Egun, 2009). Usually, farmers produce for subsistence requirement and for commercial purpose. This tells us that a farming household is a producer and consumer of these food crops. The type of crop a farmer produces or consumes is usually determined by its market price. Among the food crops a farmer produces, he chooses to sell the crops that have a fair market price and consume the ones with a poor market price. Since most of the food crops are substitutes in production and consumption in Nigeria, the production of some food crops moves from commercial to subsistence any time there is a government intervention trying to promote one or two of these crops.

Nigeria is the leading producer of yam and cassava (Ezebuiro et al., 2012; FAO, 2015). This because it is natural the country, meaning that it has a comparative advantage over other countries involved in their production. According to reports from the Nigeria Export Processing Zone (2010), about N56 and N70 billion was realized from the exportation of yams in 2008 and 2009, respectively. This signifies the potential of yam to alleviate poverty and achieve economic growth. That much potential also exists in the production of rice and cassava to improve the economy in Nigeria. Currently, the level of rice supply in Nigeria is still not able to meet with the demand of the growing population, leaving a deficit of about 2.5 million metric tonnes (Njeze, 2015), which is usually met through imports. If rice production improves domestically, the foreign exchange is conserved and the economy improves. Since cassava was promoted as a cash crop in Nigeria, in 2002, the majority of food crop farmers have been cultivating the crop, meaning that improvement in its competitiveness has the potential to improve the welfare of about 70% of the growing population. Usually, market failure exists when the production of food crops is no longer competitive. The key to overcoming poor competitiveness in agricultural trade is appropriate and effective policies (IFPRI, 2006).

Nigerian agricultural policies can be grouped under four phases. These are the pre 1970 period, i.e., 1960-1969, the Structural Adjustment Period, i.e., 1970-1985, and post Structural Adjustment period: i.e. 1985 to date. The pre 1970 period was a time when the government's role in agriculture was very minimal. Its effort was more in the area of agricultural research, extension, exports crop marketing and pricing activities (Manyong et al., 2005). Structural adjustment policies included reduction of tariff on import and export and eradication of marketing boards (Manyong et al., 2005). The Post Structural Adjustment Policies included the banning and unbanning of policies on rice, the Root and Tuber Expansion Programme in 1999, the cassava initiative program in 2002, the rice initiative policy of President Olusegun Obasanjo in 2004, rice trade liberalization in 2008, subsidies on agricultural inputs, such as agrochemicals, credit and fertilizer. When the presidential initiative on cassava came on board in 2002, which aimed at using cassava as an engine of growth through export, many crop farmers responded to this incentive as a way of improving their welfare. …

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