Agricultural Economics and Extension Project Topics

Role of Agriculture in Economic Growth and Poverty Reduction in Nigeria

Role of Agriculture in Economic Growth and Poverty Reduction in Nigeria

Role of Agriculture in Economic Growth and Poverty Reduction in Nigeria

Chapter One

Objectives of the Study

The main objective of this study will be to determine the role of agriculture in economic development and poverty reduction in Nigeria.The following specific objectives will also be achieved:

  1. To determine the effect of agriculture on the Nigerian economy.
  2. To determine the effect of agriculture on poverty reduction in Nigeria.



Conceptual Framework

Conceptualizing Poverty

Meaning, Measurement, Causes and Consequences

Meaning of Poverty

Poverty has been defined by so many researchers all over the world. According to Narayan et al (2000), poverty is humiliation, the sense of being dependent, and of being forcedto accept rudeness, insults, and indifference when we seek help. The World Bank (2000) stated that poverty is the lack of what is necessary for material well-being especially food, but also housing, land, and other assets. In other words, poverty is the lack of multiple resources that leads to hunger and physical deprivation. Watt (2000) opined that poverty is the state of being in which we are unable to meet our needs.  However, the concept of ‘needs’ itself is defined very differently across different cultures and generations, as technology and changing values alter perceptions of the pre-requisites of an acceptable standard of living.  This indicates that the concept of ‘needs’ includes the notion of what is conventionally regarded as necessary to lead one’s life as an integrated member of a particular society.

Yaqub (2002) defined poverty as a condition ofprivation or want in which a poor individual is incapable of satisfyingthe minimum basic human needs in such areas as food, housing and clothing, to ensure a decent life or existence.Amuguo (2003) posited that poverty is the deprivation of elements necessary for human survival. These elements include clean water, food, shelter, health and self-dignity. Deprivation of self-dignity is simply the denial of individual liberty, natural rights, political liberty, civil liberty and property. In situations where these elements are farfetched, the society is left with nothing but poverty and underdevelopment.  Oyeranti, and Olayiwola, (2005) defines poverty as the failure to achieve basic capabilities such as being adequately nourished, living a healthy life, possession of skills to participate in economic and social life, permission to take part in community activities to mention a few.  Ben (2008) averred that poverty is defined as a state of long term deprivation of wellbeing, a situation considered inadequate for decent living. Poverty is the inability to attain well a standard of living. Inequality in the other hand is defined as the condition of been unequal.

Poverty, according to Achegbulu (2010), is a situation whereby the poor earns too little income, consuming too little to attain a standard of living that is socially acceptable. This is so as the people seem to be educationally deprived and thereby are less likely to be availed of a wide range of social services. Poverty can also be seen as not having access to basic necessities of life –food, potable water supply, shelter and clothing, having no means or even hope of survival. This is when available resources at ones disposal are inadequate or too small to cater for one’s fundamental needs and provide a socially acceptable standard of living (Ekweoba, 2011).  According to United Nations (2011), poverty is the inability of having choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation. Poverty is a state in which human beings have little or no material means of surviving, which manifests in little or no food, shelter, clothes, healthcare, education, and other physical means of living and improving one’s life (Wikipedia, 2011).





This chapter gives light on the research methodology and techniques employed in the study, involving sources of data, evaluation of parameters and the justification of this study.

Theoretical Framework

As carried out by this study has its theoretical backing from the Jorgenson’s neoclassical model of a dual economy which sees the agricultural sector characterized by constant returns to scale with all factors variable (except the supply of land that is fixed) as given by Cobb-Douglas production function:

Y = ℓαt  Lβ P1-β

Where Y represent agricultural output, ℓαt is technical change which takes place at a constant rate (α) in the time (t), L is fixed quantity of land available in the economy, β is the share of landlords in the product which takes the form of rent, P is total population in this sector, and 1-β is the share of labour in product paid.



Econometric criteria

Table 4.1 (a): Unit Root Test Result at levels



Summary of Major Findings

This study was set out to investigate the role of agriculture in poverty reduction ad economic growth in Nigeria. Specifically, the study examined the effect of agriculture output on poverty reduction and also on Nigeria’s economic growth between 1981-2014. Following a detailed time series and econometric analysis which involved the use of ordinary least square method, the empirical result revealed the following:

  1. Agricultural sector plays a significant role in poverty reduction
  2. Credit to agricultural sector, government expenditure on agriculture and agricultural output increases household consumption and thus reducing poverty
  • Agricultural sector plays a significant role on economic growth in Nigeria
  1. Credit to private sector, government expenditure on agriculture and agricultural output increases economic growth in Nigeria


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