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Expenditure on Agricultural Sector and Food Security in Nigeria (1985-2010

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The perennial increase in the number of beggars on our major streets within and outside the cities, asking for money or food to feed themselves, coupled with the large number of reports from General, Teaching as well as Private hospitals on cases
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   International Journal of Social Science Tomorrow Vol. 2 No. 1   ISSN: 2277-6168 January|2013 www.ijsst.com Page |   1   Expenditure on Agricultural Sector and Food Security in Nigeria (1985-2010)   Salmanulfarisi Abdulrahaman, Kano State Polytechnic, Nigeria   Abstract The perennial increase in the number of beggars on our major streets within and outside the cities, asking for money or food to feed themselves, coupled with the large number of reports from General, Teaching as well as Private hospitals on cases (Kwashiorkor, goiter, malnutrition) due to lack of diet or poor eating habit leading to malnutrition, bring the question of whether there is any hope for the teaming Nigerians to sustain a decent living and better tomorrow? The objective of the study is to determine the role of government in funding agricultural sector in ensuring that the sector achieved its primary role of providing sufficient and quality food for Nigerians. In achieving the said objective secondary data was used and linear regression at ∞ = 0.05 was employed. The study found that there is a significant effect between budgetary allocation and food security; however, the  budgetary allocation to the sector is too small to ensure food security. The study therefore recommended that more statutory allocation should be given to the sector. Keywords: Budgetary Expenditure, Food Security, Food Insecurity, Hunger 1.   Introduction The history of Nigerian economy prior to independence was agrarian, with agricultural sector servicing all the other sectors of the economy and agriculture remain the mainstay of the Nigerian economy despite its decline with the emergence of oil boom in 1970s. From 1960, when Nigeria achieved independence Adofu, Abula and Agama (2012) opined that the performance of agricultural sector was inconsistent.   International Journal of Social Science Tomorrow Vol. 2 No. 1   ISSN: 2277-6168 January|2013 www.ijsst.com Page |   2   Prior to colonial administration, the agricultural sector produced food crops to meet the domestic needs and at the same time took the surplus to the market for sale. In this period there was sufficient food. But with the advent of colonial administration, the policy of the then government toward the agricultural sector did not favor the continuation of cultivating and producing food crops, instead the policy of the colonial government was shifted to a mere production of cash crops such as; groundnut, cotton, cocoa to mention but just a few. Following the oil boom of 1970s the Nigerian economy started to depend rather precariously on this single commodity (oil) both as the major export as well as the main source .of government revenue. Foreign exchange earned in the process was routinely monetized by the government; meanwhile the agricultural sector suffered a criminal neglect (Abdulrahaman, 2001). The i don’t care attitude or lack of government interest on the sector can be viewed from the budgetary allocation to the sector as observed by Abdulrahaman (2001), this is the most contributing factor to food insecurity as opined by Iganiga and Unemhilin (2011). The objective of the study is to determine the role of government in funding agricultural sector in ensuring that the sector achieved its primary role of providing sufficient and quality food for Nigerians. In achieving this objective, the study asked, if the budgetary allocations to agricultural sector are sufficiently enough to provide sufficient quantity of agricultural out puts? Similarly the study wishes to test the following null hypothesis. Ho: There is no significant effect between budgetary allocation and provision of sufficient food by agricultural sector in Nigeria. 2.   Conceptual Framework and Literature Review 2.1 Food Security and Nigerian Food Situation Adebayo (2010) claimed that, the idea of food security came into being at the World Food Conference in 1974, under the perspective of having adequate and availability of food on national scale. On a similar note United  Nation (1975) has this to say, Food and Agricultural Organization (FAO) defined food security as availability of all food items at all times. To explain further, Abu, (2010) cited World Bank (1986) saying the matter is not of having availability, but also how accessible the food is, both at global, national and house hold level. Based on the above notion Adebayo (2010) defined Food security as the entitlement of individual of a country to food at relative ease of access and at affordable prices. The problem facing the world at large is how to meet a sustainable food balance so as to keep pace with unprecedented increase in demand and at the same time, meet sustainable development. Reports from MDG 2010, states that, the proportion of people living below the spun of hunger increased from 29% to 33% between 2000 to 2009, which implies little prospects of achieving a target of 14.5% by the year 2015 (oneworld.net, 2011). Some of the factors given rise to food problems globally are population growth and rise in income of developing countries (Food, 2000). The world population before the end of the century is expected to add up with 1.3  billion members and the doubling period is 40 years, and these shows there will be more mouths to feed. The  problem however, is not that food production is outstripped by population, but the problem is where the food is  produced, who produced it and who commanded it. In most cases people suffer from starvation and malnutrition, starved not just because there is no food, but rather lacks the money to command their share. Food insecurity on the other hand refers to a country’s inability to guarantee ease of access to food to its citizens, due to fall in food supply, increase in the demand for food, relative low income as a result of inflation and unemployment. Abu (2012) added that it refers to an adequate diet which can be either temporary or continues. A country is said to be food secured when majority of its population are not vulnerable to hunger through having access to quantity and quality of food at all time (Idachaba, 2004). Food situation in Nigeria is not the absence of food, but the means to command it, looking at consumer price index on food items taking 1985 as a based by 2005 there was an incraes of 3,959.5 percents (Abdullateef and Ijaiya, 2010)and this cannot be devoid from government’s poor policy in the economy. Apart from inability of some Nigerians to source and secure money to buy food, even those that are favored by the economy, when they go to the market, what they concede is the fact that, the large quantities of food stuffs bear nothing but exorbitant prices. One may argue that if Agricultural sector can provide all the essentials as well as the quantities of food stuffs required by the market, then it is possib1e for each and every individual to command and have easy access to food at affordable prices. This is because if supply exceeds demand, prices tend to fa1l and this will enable the consumers to have access to food, prices can go up only in a situation whereby the agricultural sector failed to   International Journal of Social Science Tomorrow Vol. 2 No. 1   ISSN: 2277-6168 January|2013 www.ijsst.com Page |   3    provide the required amount of food. If for example, the government will consider policy reforms that will enhance the productivity of agricultural sector, there is no reason, why food stuffs in different varieties will not  be available in the market. The Nigerian food situation is not a reflection of the scarcity of food, but the hand-work of saboteurs who have resorted to hoarding in an attempt to create artificial scarcity. However, if the government can boost agricultural  production, when there is sufficient to meet the market demand, the above mentioned factor cannot be a threat or a problem to food security. In the same vein if the government can re-activate commodities board and set  provision for bumper stock the question of creating artificial scarcity through hoarding cannot be a case in point. The effect of migration can also be considered as a threat to food security, since there is a direct relationship  between labor input and total farm output (Adepoju, 1981). Movement away from country side militates against increased supply of much needed labor to the agricultural sector, and will affect the amount of food to be supplied. Most of the reasons among others of this labor movement are absence of infrastructural facilities in the rural areas as well as searching for white color jobs in the urban centers. With the new technical modern farm equipment an individual can cultivate hectares of land and this is what makes a small country like Israel and countries with large population (China and America) to produce enough for them and export the remaining to the rest of the world. If similar technologies will be provided to those that were left in the rural sector, the same level of productivity will be expected. In Third World countries, the agricultural sector provides labor surpluses in which the labor marginal productivity falls to zero. To take the advantage of unlimited supply of labor, new industries will emerge, giving out wages above subsistence level which exceed the income they received in agriculture. The problem of food security in real sense cannot be articulated with the question of rural-urban drift. If a tractor when employed on the land can do the work of hundreds of people in a single day, then substituting the number of people migrating from rural sector with machines and other tools will be of more importance than  providing them with social infrastructure which will limit their movement within their own locality and at the same time making the ratio of labor to land unbearable. According to (Rau,1993) famine and starvation are functions of absolute poverty, leading to disparity among general public as it allows some to command food and deprived others. Entitlement to food in Africa and Asia is affected by the level of their economy (tight and crude), primitive mode of production as well as removal of subsidy from agricultural inputs. Food security in a particular country is determined by its access to factors of production as well as amount of food available. The amount of food available in a particular country is a function of  ; current aggregate food  production, loan disbursement to food crops, government expenditure on agriculture, value of food import, stock of food from previous years and food exports. 2.2 Government Expenditure on Agriculture Adopu, et el (2012) defined budgeting as a tool for planning and controlling finance used by both private individuals/establishments, and governments at national, state or local level. The term explained how limited resource can judiciously be allocated to units, centers or sectors on priority bases. Public spending is an instrument used by the government to promote agricultural growth and reduced poverty (Adofu et el, 2012). The question whether government gives priority to agriculture or not, depends on the priority it gives to the sector in its fiscal year budget. The main features of government budgetary provisions include the formation of national food security strategy which is to ensure a continued access to domestically produced food by most Nigerians. Government’s priority to agriculture in terms of major pronouncement has been there right from the first development plan. Capital allocations to agriculture by the federal government grew tremendously from about  N41 million in 1962 - 1968 plan periods to N5.4 billion in fourth plan period. Despite the revenue allocations to agriculture and other mass programs introduced to stimulate agricultural  production, the impact is still little. This has been blamed largely on the limited sum of the allocations to the sector in proportioned to the total planned expenditure of the government. Iganiga and Unemhilin (2011) cited FAO (2008) reporting that, between 1970 to 1980 the agricultural sector on averaged received 4.74% of the total budgetary allocations within the period. The amount increases by 7.0%  between 1981 and 2000, and between 2001 and 2007 the allocation to the sector rose to 10.0%. Despite all these increase the sector fall short to meet the average percentage of 6%, 10%, or 25.0% as recommended by New  partnership for Africa’s Development (NEPAD), Maputo Declaration and Food and Agricultural Organization respectively(Adofu, et el 2012).   International Journal of Social Science Tomorrow Vol. 2 No. 1   ISSN: 2277-6168 January|2013 www.ijsst.com Page |   4   Looking at the table 1 the allocation to agricultural sector, when compared to the total government expenditure is too small taking into consideration the amount allocated to agricultural sector (translated as a percentage of the total expenditure) is evidently enough to assess the government seriousness toward the sector. The sector was allocated 5.7% of the total government expenditure in 1985. Between 1985 and 1995 the average allocation to the sector was 4.5% the story is almost the same when one takes the average of expenditure on agriculture for another ten years. Between 1996 and 2005 the government allocated an average of 4.1% of its total expenditure to agricultural sector. Similarly, in 2005, 2006, 2007; 2008. 2009 and 2010 the sector received 4.4, 5.5. 5.4, and 5.6, 5.0 and 4.0 percents respectively. Table 1 Expenditure on Agric and Food prod. 1985 - 1997 Year Expenditure to Agric. (000) Agricultural commodities (000) (Staples and Other Crops) 1985 1,018.5 39,916.0 1986 925.4 41,712.0 1987 394.3 46,270.0 1988 650.0 56,864.0 1989 1,062.6 63,526.0 1990 1,966.6 67,328.0 1991 672.3 79,473.0 1992 924.5 87,312.0 1993 2,835.3 90,147.0 1994 3,719.10 92,250.0 1995 6927.7 95,556.0 1996 5574.0 100,971.0 1997 7,929.6 103,859.0 1998 11,840.4 107,703.0 1999 38,259.8 111,515.0 2000 10,596.4 117,876.0 2001 64,943.9 103,635.0 2002 44,803.8 107,572.5 2003 16,045.2 115,304.1 2004 49,926.4 125,084.9 2005 76,637.6 121,173.5 2006 107,463.9 130,574.5 2007 126,638.0 139,315.1 2008 171,400.0 149,442.2 2009 161,300.0 158,679.3 2010 170,300.0 167,795.6 Source:   Central Bank of Nigeria 2005, 2010. Of the estimated capital expenditure of N3,279,800.0 billion in 2009, only N161,300.0 million or 5.0 percent was allocated to agriculture, which is very meager when compared to general administration, and educational sector. Similarly, looking at the total expenditure allocated to agricultural sector between 2006 and 2010, when compared to 2000 and 2005, there was a significant difference. The total amount received for the last five years was N737, 275.6 on average N147, 455.12 as against N262, 953.3, the growth rate between the two period shows an increase of over 180%. Figure 1   International Journal of Social Science Tomorrow Vol. 2 No. 1   ISSN: 2277-6168 January|2013 www.ijsst.com Page |   5   However, the government effort does not only stop in providing a statutory allocation to the sector, but also credit and loans were equally provided to the agricultural sector by government institutions (Agricultural Credit Scheme) and commercial banks improved substantially under the central bank’s credit guide line which begun in the early 1970s. Comparing agricultural sector with other sectors such as general administration, defense and education sectors  between 2006 and 2010, the result is disheartening to farmers and agro allied workers. The table below provides comparative bases on Naira as well as Percentage form of statutory allocations to various sectors. From the estimated expenditure of Federal Government on other sectors of the economy from 2006 to 2010, agricultural sector does not receive any priority attention as indicated in table 2. From the table below,  percentage share allocation to agricultural sector existed in single digit, with sharp increase above defense sector within the period of 2006 and 2010, and the growth rate of percentage share allocation between years increases or decreases by less than a half percentage. Looking at the remaining sectors with exception of defense the story is different. TABLE 2 Statutory Allocations To Selected Sectors For The Period Of 2006 To 2010 Compiled and computed by the Author Take for example General Administration; in 2006 the sector received 23.7% of the total statutory allocation, which is equivalent to N437.4 billion, where in the same period agricultural sector was allocated only with 5.8 % of the budgetary allocation of that period. Similarly if you compare what agricultural sector received in 2006 and what is allocated to Education the difference is glaring (CBN, 2010). In 2010, the table indicated that, General Administration has the lion share of 22.8% out of the total budgetary allocation of the period amounted to N3,992.0 leaving Education with 15.0%, Agriculture 4.3% and Defense 3.1%. With this lukewarm attitude of the government towards agriculture in terms of funding, there is no how that the sector can discharge is primary function of proving enough food to the entire nation. 3.   Theoretical Framework The study is based on Keynes frame work of the understanding of government role in fostering economic activities. Keynesian model argued that Government intervention is necessary, through fiscal policies (investment and taxes) which if employed will have impacts on employment, productivity and outputs. It is not worthy to leave everything to the market forces due to market imperfection; hence, government intervention  became necessary. MODEL The study is using linear regression mode, where:  fs  = F(  gea)    fs  = ∞ 0   + ∞ 1  gea + β   where;  fs = food Security proxy (Total agricultural output) ∞ 0 = Intercept   gea = government expenditure on agricultural sector  β   = error term
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