Agricultural development in Nigeria: the role of market and non‐market forces

Abstract

Policy and Performance in Nigeria's Export Agriculture At independence in 1960, Nigeria was firmly established as a major exporter in the world market for cocoa, groundnuts and oil palm products. Long before this period, marketing arrangements had been formalised to deal with domestic procurements and export arrangements for major agricultural export commodities. Legislation vested monopoly export rights in centralised marketing organs, whose establishment was ostensibly motivated by the desire to protect producers interests. These bodies soon became agents of state control through which peasant surplus could be extracted. Gradually, pricing policy objectives came to be dominated by a desire to raise taxes rather than stabilise producer incomes. Helleiner provides a detailed account of marketing boards' role in generating fiscal resources for development. As instruments for mobilising savings, the marketing board system was effective. The revenues derived from export produce constituted a significant percentage of central and regional financial resources, and the basis for growth until the late sixties, when oil earnings came to dominate the revenue structure. For many of the marketing board-controlled commodities, production reached its peak in the mid-sixties. Between 1970 and the early eighties the production of these commodities steadily declined. This decline is most dramatically exhibited in groundnuts and palm oil output. Not only was their export wiped out but by the late seventies substantial imports were required to fill a domestic supply deficit. A note of caution is warranted at this juncture. Not enough is known about the actual trends in the country's agricultural production. Declining commodity exports alongside rising vegetable oil imports do not necessarily reflect a collapsed and stagnant agricultural sector. Much of this trend may be accountable in terms of an expanded domestic demand. The expansion of demand for Nigeria's agricultural produce has arisen partly from the rapid population growth and urbanisation experienced. It is also a result of income increases associated with the oil-boom. In