Drivers and Sustainability of Agricultural Growth In Nigeria

This paper evaluates the factors that drive Nigeria’s agricultural growth with an intent to inform and stimulate appropriate policy responses for growth sustainability. Using hypothesized traditional factor inputs, the study estimated a global agricultural production function for Nigeria based on Cobb-Douglas model, assuming Hicks-neutral technological progress. Also, the study estimated an econometric model of total factor productivity (TFP) based on ‘Solow Residual’. The data covered a 40-year period from 1970 to 2009. The total factor productivity model distinctively incorporated market-related and policy-level factors that potentially affect agricultural productivity growth. The TFP analysis was extended to cover total social factor productivity (TSFP) in order to analyse growth sustainability. The analysis shows that Nigerian agricultural sector is characterised by increasing return to scale, which implies that farmers are operating at the low end of the production function. This underscores the huge potential to raise agricultural output through increased use of more efficient inputs, rather than by mere expansion of cultivated land. The relatively more important factors that influence Nigeria’s agricultural value added include rainfall, technology (efficiency parameter) and fertiliser use; and land area is the least important factor.