SOURCES AND DETERMINANTS OF AGRICULTURAL OUTPUT AND PRODUCTIVITY GROWTH IN NIGERIA: 1960–2015

Abstract

Nigeria’s agricultural productivity and output growth have been a challenge to efficient distribution of scarce farm resources over the years, due to population pressure on land. Thus, Agricultural production has moved into marginal lands, characterised by poor output. Though, previous studies have focused mainly on agricultural productivity, however, paucity of information exists in the area of agricultural output and productivity growth over the years. Hence, sources and determinants of agricultural output and productivity growth in Nigeria from 1960 to 2015 were investigated.

Secondary data, sourced from Food and Agriculture Organisation statistics covering 1960 to 2015 were used to determine output and productivity growth. Agricultural land, agricultural labour, fertiliser (as proxy for all chemical inputs used), number of tractors in agriculture, Agricultural Gross Domestic Product (AGDP), index of trade openness and trade ratio were variables used in the study. Augmented Dickey-Fuller test was used to determine stationarity of variables. Data were analysed using descriptive statistics, exponential trend model, stochastic production function, inefficiency model, agricultural output/productivity decomposition and multiple regression model at α0.05

Inputs used for the period were 32,615.1±3,627.9 hectares (land), 12,423.2±7,705.2 man-days (labour) 319,684.7±300,285.0 kg (fertiliser), 13,201.3±9,830.3 (tractor), with a corresponding 389.760.0±225,907.2 (naira) for AGDP. Declining productivity was observed from 1961 to 1998 with Total Factor Productivity (TFP) of 0.43±0.03. Constant productivity was observed from 1999 to 2001 with a TFP of 0.97±0.01, while increasing productivity was observed from 2002 to 2015 with TFP of 1.14±0.03. Growth rates of agricultural variables were 3.5% (AGDP), 10.2% (fertiliser), 7.1% (tractors), 3.6% (land) and 0.03% (labour). The contribution of inputs to AGDP growth were 48.8%, 33.9%, 17.1% and 0.1% for fertiliser, tractors, land and labour, respectively. The estimated input parameters (β) value of the response of output to input used were fertiliser (0.2376), land (0.2234), labour (0.2032), and tractor (0.1681), they positively determines AGDP. The sum of these parameter was 0.8145, indicating decreasing returns to scale. Technical Efficiency (TE) of AGDP was 0.8246, while Technical Inefficiency (TI) of AGDP was 0.1754. Factors influencing TI were inflation (-0.5874), fertiliser price (-0.2311), trade openness (-0.2163), trade ratio (-0.3520) and time (-0.5634), indicating inefficiency reduction. Input growth (0.52), technical change (1.56), technical efficiency change (0.85) and allocative efficiency change (0.76) positively determined AGDP growth, while scale effect (-0.92) and price adjustment (-0.06) negatively determined AGDP growth. The growth rate of AGDP was 3.52%, with input growth, TFP and residual contributing 14.8%, 62.8% and 22.4%, respectively. Trade openness (0.3042) and time (0.2576) positively influenced productivity growth, while macro-economic stability (-0.2459), fertiliser price (-0.2326) and tractor price (-0.2274) negatively affected productivity growth.

Input growth and productivity were the main sources of agricultural output growth from 1960-2015. Technical change, technical efficiency change, and allocative efficiency change were other sources of agricultural output and productivity growth in Nigeria. Fertiliser, labour, land, tractor and time positively influenced agricultural output while trade openness, number of tractor, agricultural land, labour and time enhanced productivity in Nigeria.