Wednesday, May 11, 2022 / 09:42 AM / by FDC Ltd/  Header Image Credit: Laptopyak

Nigeria has had little success in its attempt to diversify the economy through growth of the agriculture sector, largely due to poor policy implementation. A large number of the current policies aim to promote agricultural inclusion via the availability of low interest loans, like the ANCHOR Borrowers program and other loans made available by the Central Bank of Nigeria. While these loan programs have made some improvements in terms of farmers’ increased access to financing, a large number of people still remain unemployed; the sector continues to struggle with a lack of investment due to its poor earning potential; and Nigeria remains overly reliant on imports that should be produced within the country.  

A key to improving the earning potential of the sector is by improving the sector’s productivity which would then increase revenue for farmers. Policies that improve productivity in the country are not foreign, but they have not been able to achieve much because of poor implementation, reach and performance. The government’s approach needs to be more deliberate and result-oriented.  

Learning What Works from the Indian NAP 

One example of a country that reaped the benefits from good policy initiatives is India. India is a top player in global agriculture and is one of the top three countries in total food production, alongside China and the United States.¹ In 2000, India’s value-add from agriculture had a growth of 0%, prompting the government to formulate policies that would drive growth through increased productivity, and improved income and standards of living for farmers.² Since then, India’s agriculture sector has been consistently improving and now in 2022 India is currently one of the major food producers in the world. 

The primary vehicle for India’s success was the Indian National Agricultural Policy (NAP), which was implemented in 2000. One of the objectives was to achieve a growth rate of 4% or more in the agriculture sector by 2005. The policies were so successful that India achieved 4.8% as of 2005, and value added to the GDP from the sector was $144.55bn in 2005, up 42.81% from $101.22bn in 2000.  

The NAP focused on: “strengthening rural infrastructure to support faster agricultural development; promoting value addition; accelerating the growth of agrobusiness; creating employment in rural areas; securing a fair standard of living for farmers, agricultural workers, and their families; discouraging migration to urban areas; and facing the challenges of economic liberalization and globalization”.⁵ Two of India’s high impact policies that could best be applied to Nigeria include the electrification of rural areas and prioritization of animal husbandry, poultry, dairy and aquaculture.  

Leapfroging the Agricultural Sector through Infrastructural Development 

In 2005, access to electricity amongst the rural population in India had increased to 57%, from 48.1% in 2000. In addition, the rural population was up to 812.11mn in 2005, from 764.25mn in 2000.⁷ This suggests an increased willingness of people to stay in rural areas. The increased standard of living and income meant that there was minimal difference in rural and urban wages.⁸ India’s efforts at rural electrification and development did not stop in 2005 and as of 2019, 96% of the rural population had access to electricity. Key efforts to achieve this success have included the separation of agriculture and non-agriculture power supply feeders to facilitate continuous quality power supply to non-agricultural consumers and adequate power supply to agricultural consumers.  

India also strengthened and augmented its sub-transmission and distribution infrastructure, as well as its micro-grid and off-grid distribution networks to improve efficiency. They also increased the number of electric grids in the area. Access to electricity has improved irrigation practices due to improved irrigation pump operation. This has led to increased yields.  

For India’s prioritization of animal husbandry, poultry, dairy and aquaculture, the policy had some success as production of the livestock index was up to 66 in 2005 from 58 in 2000, while total fish production was up 13.56% to 6.7mn in 2005 from 5.94mn in 2000.  

India’s policy on animal husbandry included:  

• ensuring the natural growth of livestock production by promoting the use of high-quality pedigreed bulls and proven semen to upgrade genetics and species; 

• erecting participatory, collective-action institutions for small-scale farmers to support vertical integration with livestock processors and input suppliers; and 

• promoting effective regulatory institutions to deal with the issues of environmental and health crises arising from livestock.  

Additional policy initiatives included: 

• conservation of native livestock to maintain diversity of breeds;

• an immunization program against important animal diseases; 

• the creation of disease free zones; 

• the enhancement of feed/fodder production; and 

• the creation of the National Animal Health and Production Information System to serve as a database to track all activities and production data.  

The use of technological and marketing interventions in the production, processing and distribution of livestock products was also highlighted. India today is the number one global producer of milk. Part of this success can be attributed to their efforts in innovation and technology, as well as the quality and breed of their livestock. 

These high impact policies did not operate alone. They were part of a full suite of policies including: 

• participation of the private sector by encouraging contract farming; 

• removing of restrictions on the movement of agricultural commodities throughout the country; 

• minimizing fluctuations in commodity prices by taking necessary steps; 

• protecting plant varieties through legislation; 

• the adequate and timely supply of quality inputs to farmers; and 

• setting up off-farm employment in rural areas, including agro-processing units.  

If Nigeria adopted these types of policies, and ensured their implementation, consistency and suitability, the same level of success could be expected in the agriculture sector of Nigeria. When all these factors are deliberately addressed, there could be changes in terms of productivity which could lead to increased revenue, interest and investment in the agricultural sector. The current policies of the CBN can then begin to make a difference as they ensure that the capital is available.