INTRODUCTION

 

1.1 Background to the Study

 

In Nigeria, the agricultural sector has been invaluable in supporting economic growth and  development  since  independence  in  1960.  Indeed,  before  the  discovery  and exploration of petroleum, the Nigerian economy depended on funds generated from agricultural export expansion for the development of other sectors of the economy. Due to its important role in nation building, the agricultural sector has continued to be a target of government policies overtime (Eyo, 2008). In  other  words,  agriculture  has traditionally been characterised as the mainstay of the Nigerian economy in spite of the growing importance of oil exploration in Nigeria. Nigeria has remained essentially an agrarian economy. In the context of the Nigerian economy, agriculture is tied to the various sectors and is essentially for generating broad-based growth and development. Agriculture is therefore fundamental to the sustenance of life and has become the  bed- rock  of  economic  development  as  it  still  accounts  for  significant  share  in  Gross Domestic product (GDP), total exports and employing the bulk of the total labour force (Jimaza and Sanni, 2003).

In this regard, cotton has been chosen to form the focus of this study. Cotton as a sub- sector of the crop production sector has been playing similar roles in the economy. Alam  et  al.  (2013) asserted that  cotton (Gossypium Spp)  remains by far  the  most important  natural  fibre,  it  represents  38%  of  the  fibre  market.  Cotton  is  crucially important  for  income,  raw  materials  and  employment  provided  its  production  and processing is adequate. In Nigeria, prior to the oil boom, cotton was one of the main source of foreign exchange and second largest employer of labour after the public sector. Indeed, the contribution of the crop production sub-sector is one of the indicators of the roles played by agriculture. This is in terms of some cash crops particularly cocoa cotton, groundnuts and some other staple food crops contributing to the expansion of the economy of the country.

In the same vein, Oji-Okoro (2011) was of the opinion that agricultural resource has been an important sector in the Nigerian economy since 1960‟s and is still a major sector despite the oil boom; basically it provides employment opportunities for the teeming population, eradicates poverty and contributes to the growth of the economy. Ogen (2007) noted that a strong and efficient agricultural sector would enable a country to  feed  its  growing  population,  generate  employment,  earn  foreign  exchange  and provide raw materials for industries. The agricultural sector has a multiplier effect on any nation‟s socio-economic and industrial fabric because of the multifunctional nature of agriculture. In the same vein, Ega (2010) asserted that agriculture provides about 90%  of  nation‟s  total  food  requirements  and  merits  priority  attention  from  policy makers not only because of its economic significance but also because of its importance in the war against hunger and poverty and its significance in rural development.

At independence, the contribution of agriculture to the GDP was about 25% between 1975 and 1977. This was partly due to the phenomenal growth of the mining and partly as a result of the disincentives created by macroeconomic environment, (NBS) (2011). Similarly,  the  growth  rate  of  agricultural  productivity exhibited  a  downward  trend during the period. Thus, between 1970 and 1982 agricultural productivity stagnated at less than one percent annual growth rate at a time when the population growth rate was 2.5 to 3.0% per annum (Adubi, 2001). According to the National Bureau of Statistics (NBS) (2011), the percent share in the GDP of the crop sub-sector between 1981 to 1990 had been fluctuating between 28.37% and 22.99% and did not register any significant increase. This trend continued as the contribution of the crop sub-sector was almost stagnant at about 36% from 1994 to 1997 and from 2003 to 2006. Also, the Central Bank of Nigeria CBN, (2011) in its annual report indicated the per cent share in total of the contribution of the agricultural sector to the GDP at 1990 constant basic prices. From 2007 through 2012, the share has been declining from 42% of the total GDP to 40.2%. The place of the crop production sub-sector in the total GDP have shown similar trend with  a decline from  37.5% to  35.8% between the same period.  Despite this marginal decline in recent years, the demand for many agricultural products outweighs the supply.

Therefore, there has not been any meaningful impact of agriculture in achieving its target of self-sufficiency in food production and meeting the desired need of supplying raw  materials  for  agro-based  industries,  sustainable  food  security  programme  and exporting  the  marketable  surpluses  to  earn  foreign  exchange  for  the  country.  This problem has been attributed by agricultural policy makers to the neglect of agricultural sector as a result of oil boom which led to a fall in food and export or cash crop production. The fluctuating pattern was more prominent and salient with respect to fibre and oil crops such as cotton and groundnuts. It is with respect to this that cotton was chosen to form the basis of this study. With regards to fibre crop, cotton is an important crop in the world, it ranks first followed by jute, kenaf and sisal in the world production of fibres. It is noticeable from the performance of the cotton production industry that since 2003/2004 cropping season, there has been a fall and fluctuating pattern in the production  trends  in  cotton.  According  to  United  State  Department  of  Agriculture (USDA,  2011),  the  production  trend  in   cotton  had  not   witnessed   remarkable improvement between 2007/2008 cropping year while the 2010-2012 cropping seasons experienced a decline.

This phenomenon revealed a glaring disparity between demand and supply thereby creating a gap in the cotton production industry. Batterham, (2000) asserted that supply is yet to satisfy the level of demand for cotton. This has caused great concern in the textile cotton fibre supply situation in the local market and export profile in the country thereby having a declining effect in its contribution to the agricultural economy of the country. According to Raw Material and Research Development Council (RMRDC) (2004) consumption of cotton lint by textile industry in Nigeria is about 100, 000 metric tons plus or minus 15%. Textile mills are therefore forced to import 15, 000 metric tons of  cotton  in  order  to  cover  the  shortfall  in  local  supply  and  for  certain  specific requirements for finer yarns such as 30-40 inches, which is not grown locally. It is therefore clear that the local supply is not enough to meet the demand of the product.

However, government attention has been directed towards the agricultural sector of the economy. Therefore, from 1971 onwards, government explored policies and strategies to  circumvent  various  problems  confronting  agricultural  production.  These  policy measures served as impetus and were aimed towards restoring the role of agriculture and  increased  productivity  in  the  agricultural  sector.  Some  of  these  policies  and programmes relevant to the food sector and cotton fibre production industry include:

 

i. Nigerian Commodity Marketing Boards (NCMBs) of 1975

  

ii.Agricultural Development Projects (ADPs) of 1976 (World Bank Assisted Project) rendering agro-services to farmers.

 

iii. Land use decree (No. 6) of 1978.