ACCESSMENT OF THE CONTRIBUTION OF AGRIBUSINESS ENTERPRISE IN POVERTY ALLEVIATION. A CASE STUDY OF IKWUANO LGA IN ABIA STATE

Abstract

Despite the role entrepreneurs play in the development of any economy, there seems to exist a dearth of empirical knowledge on what constrains entrepreneurs in taking effective entrepreneurial and investment decisions in Nigeria. investment in agricultural related business especially in the African setting, have been generally agreed to be constrained by lack of market opportunity, access to finance, enabling environment, market information, and managerial skills. In order to maintain an upward shift and to unleash the enormous potential for attracting entrepreneurs’ investments to agribusiness and agro- industries, policies and regulations affecting agricultural production, the legal environment of the investment as well as the overall investment climate in Nigeria need to be overhauled. Infrastructure underdevelopment is one of the substantive constraints to entrepreneur’s investment in Nigeria. In 2008, the United States Agency for International Development (USAID) opined that there is need to improve and expand key infrastructure for transportation, telecommunications, energy and water in Nigeria

CHAPTER ONE

• BACKGROUND OF THE STUDY

In the 1980s,  the interest of government,  policymakers donor organizations and farmers in agriculture declined until there was a new resurgence of interest when food prices started rising in the mid 2000s. Some observers have associated this neglect of agriculture with a broader shift in economic strategy in many countries that occurred in the 1980s, focused single-mindedly on reduction in budget deficits and resulting in a reduction in public investment, especially in agriculture. Others, including the World Bank, have attributed the falling productivity in agriculture and the poor performance of many agricultural development projects to the decline in the world price of food and the rising appeal of East Asia’s export-led manufacturing growth miracle. The United Nations Water, Energy, Health, Agriculture and Biodiversity Working Group believes (UN WEHAB 2002) that the donor organisations dropped agriculture as a priority for world development in the 1990s, when agriculture in the developed countries was considered to be associated with overproduction, environmental pollution and budgetary subsidies. Many developing countries took this as a lead and also dropped agriculture as a priority. It is suggested that, together, these factors pushed agriculture into the low-priority sectors when development strategies were focused on export-oriented manufacturing and services as the key drivers of national economic growth.

Growth in agribusiness productivity is considered essential in achieving sustainable economic growth and significant level of food security in an under developed country like Nigeria. Its importance in accelerating the pace of economic growth cannot be over emphasized given its usefulness in determining the efficiency and effective capacity of the nation’s production system (Oyeranti, 2008; Nto and Mbanasor, 2008). NIPC (2008) observed that productivity in agribusiness sector is critically important if output is to increase at a sufficient level to meet escalating demand for food. This is true following empirical data which revealed that while food output increased at 2.5%, food demand increased at a rate more than 3.5% due to high rate of population growth of 3.18% (FOS, 1996; ABSEEDS, 2005; FRN 2009). Efforts by government to ensure that the deficit is augmented will turn to nought if a critical and fundamental review of the determinants of productivity in the subsector is not examined (Ojo, 2003; Prasada-Rao et al., 2004; NIPC, 2008). Improving the production system and capacity of agribusiness firm in emerging economy like Nigeria through increase productivity is an important policy goal especially now that agribusiness represents an important sector in agricultural commercialization of the economy. Block (1995) asserted that within the context of growth in food and poverty alleviation, emphasis should be placed on productivity increase arising from output maximization at constant or decreasing input. By extension, indices on productivity increase should be predicated upon maximization of output at minimum input (Nto and Mbanasor, 2008). This becomes necessary following the 29% productivity decline in individual agribusiness firms and 2.5% average annual decrease contrary to the targeted average annual productivity increase of 6%. Hence, Vallano et al. (2005), FARA (2006) and Prasada-Rao et al. (2004)

In order to maintain an upward shift and to unleash the enormous potential for attracting entrepreneurs’ investments to agribusiness and agro- industries, policies and regulations affecting agricultural production, the legal environment of the investment as well as the overall investment climate in Nigeria need to be overhauled. Infrastructure underdevelopment is one of the substantive constraints to entrepreneur’s investment in Nigeria. In 2008, the United States Agency for International Development (USAID) opined that there is need to improve and expand key infrastructure for transportation, telecommunications, energy and water in Nigeria. The agency, further posited that for small-scale farmers, most of whom reside in rural areas, the limited availability and poor quality of rural roads and bridges, marketing and storage facilities, and irrigation systems greatly increase their cost of establishing and operating commercial agribusiness enterprises. In line with this, Onwubiko (2009) inferred that certain basic infrastructural facilities aid the development of the mind and body and assist productivity in any environment. These facilities have been identified as good roads, good water supply, constant power, access to information and communication technology and other tools of trade (Nwibo and Alimba, 2013). Where these are lacking in a country, the growth of the economy will be adversely affected. In Nigeria, these basic work tools as well as the enabling environment are lacking. This state of affairs has frustrated a lot of entrepreneurs with bright ideas and the corresponding spirit to effect a change in some areas of our national life. For instance, the power sector has posed the greatest challenge to any aspiring entrepreneur in Nigeria. Power supply is erratic and most times businesses have to be run on plants/generators. The cost of this alternative source of power most often erodes whatever profit or capital an entrepreneur has put aside for his enterprise. In times of energy crisis when there is shortage of fuel supply, businesses are almost grounded due to unavailability of petrol or gas to power generators.

• STATEMENT OF PROBLEM

It is no longer news that Nigeria and other developing countries in Africa has prioritize diversification of economy from mono economy to multiple economy, diversification from reliance on crude oil to embracing the potentials of agriculture and other manufacturing ventures it becomes pertinent to access the contribution of agric-business in reduction of poverty in Ikwuano LGA in Abia State. Agri-business has a lot of potential ranging   from food provision to wealth creation and poverty alleviation if properly managed and improved upon for commercial and export purposes

• OBJECTIVE OF THE STUDY

The main objective of this study is to access the contribution of agri-business enterprise in alleviating poverty in Ikwuano LGA in Abia state. However for the successful completion of the study, the following sub objective is set out for achievement by the researcher:

1. To ascertain the role of agri-business in poverty reduction
2. To evaluate the role of agri-business enterprise in food provision

• To evaluate the relationship between food provision and poverty alleviation

1. To ascertain the extent in which agri-business as has contributed in poverty alleviation.
   • RESEARCH QUESTION

For the successful completion of the study, the following research questions are formulated:

1. What is the role of agri-business in poverty reduction?
2. What are the roles of agri-business enterprise in food provision?

• What are the relationship between food provision and poverty alleviation?

1. In what ways has agri-business enterprise contributed in poverty alleviation?
   • SIGNIFICANCE OF THE STUDY

The essence of this study lies in the fact that the study will give insight to entrepreneur and intrapreneur on how to run their agri-business enterprises. It is also conceived that at the completion of the studies, the findings will be beneficial to the government in policy formulation, the farmers and intending farmers, researcher academia, teacher, lecturers, students and the general public.

• SCOPE AND LIMITATION AND THE STUDY

The scope of this study to access the contribution of agri-business enterprise in poverty alleviation in Ikwuano LGA of Abia State. However, the study has some constrained which are:

1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
3. c) FINANCE: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover.

1.7 DEFINITION OF TERMS

1. a) Agri-business

Agribusiness is the business of agricultural production. The term was coined in 1957 by Goldberg and Davis. It includes agrichemicals, breeding, crop production (farming and contract farming), distribution, farm machinery, processing, and seed supply, as well as marketing and retail sales. All agents of the food and fiber value chain and those institutions that influence it are part of the agribusiness system. Within the agriculture industry, “agribusiness” is used simply as a portmanteau of agriculture and business, referring to the range of activities and disciplines encompassed by modern food production. There are academic degrees in and departments of agribusiness, agribusiness trade associations, agribusiness publications, and so forth, worldwide.

1. b) Enterprise

a unit of economic organization or activity; especially a business organization a systematic purposeful activity agriculture is the main economic enterprise among these people.

1. c) Poverty

Poverty is general scarcity or the state of one who lacks a certain amount of material possessions or money. It is a multifaceted concept, which includes social, economic, and political elements. Absolute poverty or destitution refers to the lack of means necessary to meet basic needs such as food, clothing and shelter. Absolute poverty is meant to be about the same independent of location. Relative poverty occurs when people do not enjoy a certain minimum level of living standards as compared to the rest of society and so would vary from country to country, sometimes within the same country.

1. d) Alleviation

To make (pain, for example) less intense or more bearable. To lessen or reduce.

• ORGANIZATION OF STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study its based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study.

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