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Importation and Exportation of Food Stuffs as Determinants of Food Security in Nigeria (1999-2010

The pronouncement of the government of Federal Republic of Nigeria and its subsequent decision of spending N155 billion equivalent to USD $ 1 billion on the importation of rice alone in 2010 called the need to find out if there is any role that, the
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   International Journal of Social Science Tomorrow Vol. 2 No. 2   ISSN: 2277-6168 February|2013 Page |   1   Importation and Exportation of Food Stuffs as Determinants of Food Security in Nigeria (1999-2010) Salmanulfarisi Abdulrahaman, Kano State Polytechnic, Nigeria Abstract The pronouncement of the government of Federal Republic of Nigeria and its subsequent decision of spending  N155 billion equivalent to USD $ 1 billion on the importation of rice alone in 2010 called the need to find out if there is any role that, the Nigerian agricultural sector is playing to provide sufficient quantity of food to the nation and offer the surplus to other countries for foreign earning. It is on the record; the colonial administration mounted a lot of policies and programs on agricultural sector in making the sector vibrant enough to produce what the indigenous households are requiring and at the same time providing row materials to the industries of colonial masters at home. With the self independence in 1960, coupled with the discovery of oil in 1970 the story is no longer the same. Nigeria suddenly waken up and found itself in food crisis, a country which is known to be the major food exporter in late 60s and early 70s but now imported foods in billions of Naira. The objective of the study is to determine the level of relationship between food importation and food exportation as determinant factors in ensuring food security in Nigeria within the period of 1999 to 2010. In achieving this objective, secondary data from 1999 to 2010 was used, and to find the level of the relationship Kendal’s correlation coefficient was employed at 95% confidence level; the same statistical tool was used to test the research null hypothesis, which says; Ho: There is no significant relationship between agricultural Imports and Exports as determinant factors in ensuring food security in Nigeria. The study found that there is positive correlation which is very week at 0.238 . The study recommended for more allocation to agricultural sector, to enable the sector produce more.   International Journal of Social Science Tomorrow Vol. 2 No. 2   ISSN: 2277-6168 February|2013 Page |   2   Keywords: Importation, Exportation, Agricultural Outputs, Food Security 1.   Introduction  Nigerian agricultural sector is characterized by peasant farming, in which small scale farmers dominate farming activities and produced about 80 percent of total outputs. Livestock productions are done by nomadic where  poultry and fishing is done with little care. The few forest reserves are affected by drought and desert encroachment. (NCEMA Report, 1995). Agricultural activities have witnessed several agricultural development policies since the time colonial administration, during the colonial era, the Nigerian farmers were made to accept agricultural policies that were not in favor of productions of crops that were meant for house hold consumptions, but meant to produce cash crops, which served as sources of row materials to colonial industries. The introduction of cash crops production for example; palms kernels, cocoa, rubber, cotton and groundnut has made the Nigerian farmers to produce less of their usual subsistence food crops needed. The first colonial development planning, according to Iwuchukwu and Igbokwe (2010) includes policies of institutional and social reforms that were centered on how to boost the agricultural productivity to meet its twin objectives in Nigeria, such as the construction of road, railway lines, schools and clinics are good examples of colonial administrative policies which centered towards exploitation of local economy in meeting the demand of their home base industries. The discovery of oil boom in the early 1970s and the introduction of structural adjustment program in the midst of 1980s included Nigeria in the class of high food importing countries. Some of the reasons of declined in food exportation both in quantity and value as observed by Aregheore (2011) include, shifting emphasis to oil sector as well as the effect of low price of agricultural commodities in the world market in the 1970s. In 1979 both importation and exportation of some agricultural commodities including fresh milk, vegetables, sugar, hide and skin are all banned, later with deregulation policy in 1986 Nigeria joined and enjoyed full privileges of trade liberalization, making it possible for Nigeria to imports and exports all kinds of merchandising. 2.   Conceptual Framework Wikipedia (undated) defined food as any substance consumed to provide national support for the body, usually in plant form or animal srcin, and contain essential nutrients such as carbohydrates, fats proteins and vitamins. Food according to Mundi Index (2010) comprises the commodities, to include the flowing classes; food and live animals, beverages and tobacco, animal and vegetable oils and fats as well as oil seeds, oil nuts, and oil kernels. 3.   Food Exportation Using international trade language, (Wikipedia, un dated) 1  export refers to a selling of goods and services  produced in the home country to other markets in another countries. Using this definition food export refers to all kind of food stuffs produced by agricultural sector in Nigeria taking out for foreign earning. As a determinant to food security, a food secured country, meet the demand requirements of its citizens in terms of quantity and qualitative food products that contains all the essential nutrients for healthy body, before exporting the surplus to the global markets. This implied that when a country cannot afford to meet its home requirement by providing sufficient food for all, and engaged or depended on precarious series of importations of food stuffs such a country is said to be in food crisis. Prior to colonial administration, the Nigerian agricultural sector produced food crops to meet the domestic needs and at the same time took the surplus to the market for sale; in that period the country was said to be food secured, hence there was sufficient food at relatively lower price. But with the advent of colonial administration, Okello, (1986) argued that the policy of the then government towards agricultural sector did not favor the continuation of cultivating and producing food crops, instead the policy of the colonial government was shifted to production of cash crops such as; groundnut, cotton, cocoa and palm oil to mention but just a few   Between 1960 and 1970, Nigeria was considered as self-sufficient in food production; to the extent that surpluses of agricultural commodities are exported to neighboring countries. Exportation is believed to take  place, when an agricultural sector has the strength to produce as much as required or above the equilibrium level, this equilibrium level can be attained when distortions according to Adebayo (2010) in the sector are removed. Removing distortions in agricultural sector means increasing efficiency to produce more for local consumption and export the remaining outside to get foreign earnings. With deregulation the sector was neglected and relegated to the background, instead of producing to attract foreign earning the sector failed woefully by providing marginal increase from previous years   International Journal of Social Science Tomorrow Vol. 2 No. 2   ISSN: 2277-6168 February|2013 Page |   3   Looking at the periods of 1988, 1989, and 1990, Nigeria witnessed high increase in the value of the amount of food exported, data for the above mentioned periods gathered from Federal Office of Statistics (FOS, 1997) showed that Nigeria exported food worth N1,679.2, N1,273.5 billion and N1,417.6 billion respectively. The highest value of food exportation was in 1992 where Nigeria earned N2, 673.0 billion. In 2010, CBN (2010) provide an amazing figures showing the worsening situation of food exportation, within the period of 2005 and 2010 the value of food exportation declined, for instance in the period 2005, 2006, and 2007 the value of food exported are N50.0 billion, N85.7 billion and N107.1 billion respectively. Similarly in 2009 and 2010 food stuffs worth N135.5 billion and N141.5 billion was exported respectively. What lead to this  poor performance as argued by Iganiga and Unemhilin (2011) and Adebayo (2010) includes poor state of social and economic infrastructures in the rural areas, lack of private sector participation in agriculture as well as poor funding to agricultural sector. 4.   Food Importation The term import according to Wikipedia (undated) 2  is derived from the conceptual meaning as the goods and services into the port of a country. Impliedly it refers to the amount of goods and services coming into the country by sea, air; rail or by road. It is also commodities or services brought in from one country to another country in legitimate way such as trade. Food importation therefore refers to all kind of foods brought into a country (Nigeria) to meet its demand requirements.   By the mid 1970s, the country had been importing in varying degrees virtually all food items, notably rice, wheat, meat, tomatoes, millet, maize, beans and plantain (Aregheore 2011), signifying that, the national expenditure and productions became highly imports oriented. By 1980s, imports had reached a level equivalent to one-quarter of the gross domestic product (G.D.P) and doubled the ratio prevailing in the early 1970s. Nigeria  progressively becomes a major food importer; expectation of greater wealth, class stratification and lack of nationalism further fuelled conspicuous consumption of imported goods especially of luxury items. The major component of the food import bill of which Nigeria imported in 1998 was N116.40 billion, 1999 was  N119.87 billion and N134.81 billion in 2000 (Godwin and Dagogo, 2005), but in 2008 the total food and agricultural imports were valued at approximately $4bn equivalent to N 620.0 billion. in 2009, the Ministry of Agriculture put the amount spent on food imports mainly rice, wheat, sugar and fish to be N 555billion and recently the federal government announced that in 2010 the country spend N 155 billion on importation of rice alone (Agriculture in Nigeria, 2011), this shows the extent to which Nigeria is facing food insecurity. In 2009 the government spends N357, 133.0 billion while N522, 333.1 billion was spent in 2010 on food importation, showing increase of N165,200.0 billion or an increase of 31.63%. Out of this amount importation of rice alone took N155.0 billion, which is equivalent to 30% of total food imported within the year. To provide a comparative analysis between the values of imported and exported food items, the data in Table 1 showed the level of differences between imports and exports of food stuffs in dollar term. Between 1999 and 2001, Nigeria imported food stuffs worth US $1,372.0 million, where the value of food stuffs exported stands at US $ 416.0 million, providing a difference of $956.0 million excess over what is exported within the period of the study, this indicated that, the amount of food importation tripled the amount of food stuff exported. Table 1 Value of food Importations and Exportations in Dollar (1999-2008) Years food Imports (US$ million) Food Exports (US$ million) 1999-2002 1,372 416 2003-2005 2,333 579 2006 4,178 212 2007 6,705 845 2008 2,817 1,065 2009 4,047 2,412 2010 4,585 2,932 Source: FAO Statistical Year Book, 2010, Mundi Index 2010   International Journal of Social Science Tomorrow Vol. 2 No. 2   ISSN: 2277-6168 February|2013 Page |   4   Figure  1 Trend in Nigeria Food Import and export in US $Million The highest value of food importation was in 2007, where food worth US $ 6, 072.0 was imported as against (US $ 845.0) the value of exported food within the same period, and this indicated that the value of importation within the period is more than ten-times of what Nigeria exported out of the country. Figure 1 stressed the overdependence of Nigeria on food importation, where the value of the food importation keeps on increasing, when compared with the value of food exportation. It is also glaring that Nigeria is among the highest importing countries of food stuffs. To sum it up, the total value of importation within the period of the study (1999-2010) was $26,037.0 billion, on average going by the data Nigeria imported food stuff worth $ 2,169.0 billion every year. The total value of food exportation on the other hand for the periods of the study was $8,461.0, on average Nigeria is exporting food stuffs amounted to $ 705.0 million. In comparing the two values, Nigeria exported one third of the value of the amount of food that it is importing, which clearly shows the level of overdependence of the country on imported food items. To put it more opened, Table 2 provides the value of both imports and exports as a percentage to merchandising for the period of the study. The table shows and translates the level of commitment of government in exporting and importing food stuffs into and out of the country. Out of the total value spent on merchandise in 1999, 27.02% was on food, living 72.98% to others. Similarly in 2000, 2001, and 2002 importation of food stuffs constitute significant percentages 19.92%, 21.70% and 19.58% respectively out of the money spent on importation of merchandise. When looking at the last two years of the study 2009 and 2010 the data showed that 11.83% and 10.25% out of the money spent on importation of merchandise were spent on food. In summary the amount of money spent on food constituted a significant figure on merchandise trade. Table 2 Value of Food Imports and Exports as a % of Merchandise (1999-2010) Year Import Index as a % of Total Merchandise Export Index as a % of Total Merchandise 1999 27.02 0.30 2000 19.92 0.14 2001 21.70 0.02 2002 19.58 0.64 2003 15.50 0.02 2006 17.95 0.06 2007 20.06 1.62 2008 9.78 1.29 2009 11.83 4.53 2010 10.25 3.34 Source : Mundi Index 2010 Looking at table 2 for the second time, export index as a percentage of total merchandise throughout the period of the study indicated a poor contribution to the country’s gross domestic product. For instance, in 1999 out of the total revenue generated from external trading, trading in food stuffs contributed only 3.0% this is incredible when comparing with the 27.02% share of food importation to the total value of merchandise trade in the same  period. Import index02,0004,0006,0008,0001999200020062007200820092010Import indexExport index   International Journal of Social Science Tomorrow Vol. 2 No. 2   ISSN: 2277-6168 February|2013 Page |   5   It should be noted that, the implications of food importation can be seen from different angles, among others include, destruction of indigenous farming system and cottage industries, increase in the price of food stuffs as a result of exchange rate (Naira always depreciated in value, and at the same time most of the food items imported have expired and constituted danger for human consumptions. Figure 2 Trends of Import and Export as a Percentage to total Merchandise In 2000, 2001, 2002 and 2003 contribution from food exportation to the total expenditure incurred through merchandise trading for the above mentioned periods, were 0.14%, 0.02%. 0.64%, and 0.02% respectively. Mundi index (2010) recoded that, the contribution of agricultural sector to the economy two years after independence was glaring, as in 1962, the sector contribution from external earning was 64.54%, where in 2001 contributed insignificantly to the tuned of 0.02%. The performance of the sector improved slightly in the periods of 2009 and 2010, where food exportation contributed 4.53% and 3.34% respectively to the total money realized from merchandising. This performance of the sector does not only reflects the ability to bring foreign earning, but looking at level of importation within the same period it is easy to accept the fact that the sector perform beyond expectation, as that value of money spent as a percentage of merchandising reduced drastically when compared to previous years. Reasons of the  performances as argued by Adetiloye (2012) cannot be devoid from the increased in the agricultural loan during the periods, and increase in the government spending to the sector as put forward by Abdulrahaman (2013) and Iganiga and Unemhilin (2011) To ensure a just study, a comparative analysis between Nigeria and some randomly selected countries was conducted. Table 3 explained the level of food importations among the nine randomly selected countries for the  period of 1999-2008 in Dollar terms. Table 3 Value of Food Importation of Nine selected Countries in US $ (million) Countries 1999-2001 2003-2005 2006 2007 2008 Afghanistan 251 624 912 996 1,569 Albania 268 413 527 653 846 Algeria 2,582 3,680 4,135 5,230 7,785 American Samoa 20 14 14 15 17 Angola 431 948 1,265 1,577 2,375 Antigua & Barbuda 29 51 65 76 79  Niger 131 222 241 232 335  Nigeria 1,372 2,333 2,753 6,072 3,400  Norway 1,871 3,018 3,678 4,652 5,750 Source FAO Statistical Year book, 2010 The essence is to investigate and show how desperate, and over-dependence these countries are in food importations. Between 1999 and 2001, Algeria is the highest food importer; importing food worth $2,582.0, followed by Norway occupying the second position with $ 1,871.0 and Nigeria imported food stuffs worth $1,372.0 making it to be the third in the hierarchy, and the list importing country is American Samoa with $20.0 million worth food importation. The trends continued up to 2006 and 2007, where Nigeria emerged to be the highest food importer among the nine countries; in 2006 and 2007 Nigeria imported food worth $4,178.0 and $6,072.0 respectively. Putting the sum together Nigeria imported food stuffs within the period 1999 to 2008 that 0510152025301999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Import indexExport index
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