IMPACT OF FERTILIZER POLICY ON CROP PRODUCTION IN NIGERIA

Abstract

This study examined the impact of fertilizer policy on crop production.  The various trends in fertilizer policy reform were explored.  Specifically, the fertilizer policy was studied under two policy regimes: the pre-liberalization and the liberalization periods. The first period is between 1986 and 1996, which otherwise constituted the pre- liberalization era while the years between 1997 and 2006 make up the second period, otherwise called the liberalization era.  Secondary data on the distribution of fertilizer, usage-rate, fertilizer cost, yield of selected cereals, as well as the time series features of the variables, test for cointegration and the error correction mechanism were used in this research.   The descriptive analysis, students’ t-test and the regression model were used to analyze the data.   It was discovered that there was an increase in the distribution of fertilizer in the second period.  There was also an increase in the yield of the selected cereals.   Among the selected crops, rice had the highest yield in the first era.   The quantity of fertilizer distributed, the usage-rate of fertilizer, the price and the policy periods of the variables were found to have significant effect on agricultural production.  The quantity of fertilizer distributed and the price of fertilizer were found to have positive effect on agricultural production.   In order to increase agricultural   production   in   Nigeria   through   an   effective   fertilizer   policy:   the distribution of fertilizer to farmers has to be timely.  Farmers should be educated on the dangers of excessive use of fertilizer in order to prevent environmental pollution. Complementary use of inorganic and organic fertilizer should be encouraged so as toensure                    eco-balance                    and                    food                    security.

CHAPTER ONE INTRODUCTION

1.1      Background of the Study

Fertilizer is one of the major farm inputs for achieving the green revolution objective  in  the  world.  According  to  Dada  (2006),  during  the  Africa  Fertilizer Summit, it is generally believed that not less than 50% of incremental crop output in the past five decades is attributable to fertilizer use.

Owing  to  fertilizer  use,  along  with  other  inputs  such  as  seeds  and  agro chemicals, many countries of the world with high population densities have been able to achieve, relatively, food self-sufficiency in the past decades (World Bank, 2004). Unfortunately,  the benefits of green revolution did not accrue significantly to sub- Saharan Africa to any perceptible extent due, among other reasons, to inadequate use of fertilizer (FGN, 2005).

The Food and Agriculture Organization (FAO) estimates of fertilizer need in Africa concomitant to yield and area expansions for meeting the Millennium Development Goals (MDGs) amount to an increase in total nutrients of 47% or 26% average annual growth rate (UN, 2000).

This is why members of New Partnership for African Development (NEPAD) of the African Union (AU) had formulated  the Comprehensive  Africa Agriculture Development Plan (CAADP) predicated on increased and efficient use of fertilizer. The components of CAADP are consistent with the global objectives set in the MDGs as well  as the national  objectives  of Nigeria  contained  in the National  Economic Empowerment and Development Strategy (NEEDS) document (NEEDS, 2004). The critical aspect of the MDGs in relation to the fertilizer sector is the goal to reduce poverty by half by 2015, taking cognizance of the role of agriculture in the economy wherein about 70% of the people are employed or engaged (Dada, 2006).

The role of fertilizer  is well established  all over the world; crop output  of countries correlate strongly and positively with fertilizer consumption: World average

= 91kg/ha; North America = 93kg/ha; Western Europe = 186kg/ha; South Asia =

96kg/ha; East Asia = 201kg/ha; All Asia = 141kg/ha; Africa = 19kg/ha; Nigeria =

8kg/ha  (IFDC,  2003;  Idachaba,  2006).  But  the  FAO  recommended  200kg/ha; therefore,  the  need  for  Nigeria  to  redouble  fertilizer  use,  improve  agricultural production and productivity and raise rural income in the face of a rapidly growing population and worsening poverty incidence has become obvious (Idachaba, 2006).

Okolo (2004) described the fertilizer supply in Nigeria as still inadequate. This accounts to some extent for its low usage. One major impetus to fertilizer usage is an improvement  of the  fertilizer  market.  Olomola  (2005) stated that there is need to improve the agribusiness market structure and performance.

Since the establishment  of a ministry for agriculture  at the Federal level in 1967   followed   by   the   creation   of   the   first   professional   department   (Federal Department of Agriculture (FDA), in the ministry in 1970, the promotion of fertilizer and other green revolution technologies has become a deliberate government policy (Bello,   2006).   The   institutional   policy   on   fertilizer   involved   the   subsequent establishment  of  the  erstwhile  Fertilizer  Procurement  and  Distribution  Division (FPDD), which was established in the FDA in an effort to co-ordinate the activities of the states in the importation of fertilizer (Dada, 2006).

For  many  years,  the  FPDD  served  as  the  central  agency  for  fertilizer importation and its delivery to designated points in the country till the liberalization of the  sub-sector  began  in  1995  following  which  the  division  was  re-designated  as Federal  Fertilizer  Department  in  2001.  During  this  period  (1976-1995),  the  main statute in force was the National Fertilizer Board Act of 1977 which provided for the establishment  of  “a  body  corporate  to  be  charged  with  the  responsibility   for purchasing and distributing fertilizer to state government at such subsidized prices as may be determined by the Federal Government” (FFD, 2006b).

Generally “Fertilizer” means any substance containing one or more recognized plant nutrient(s) that is used for its plant nutrient content and is designed for use or claimed to have value in promoting plant growth (FFD, 2006a)

Specifically,  “mineral fertilizer” means fertilizer produced by mineral processes or mined and derived from an organic substance or synthetic organic substance; while “organic fertilizer” means fertilizer derived from non-synthetic organic material, including sewage sludge, animal manures and plant residues produced through the process of drying, cooking, composting, chopping, grinding, fermenting or other methods and makes a declaration of nutrient value on the label (FFD, 2006a).

Cereals are those members of the grass family, Poeceace grown for their characteristic  fruit,  the caryopsis,  which have been the most important  sources  of world’s food for the last 10,000 years ( Onwueme and Sinha, 1991). Wheat and barley are the oldest cultivated  cereals. Their cultivation  started in the fertile crescent  of Mesopotamia some 10,000 years ago, this region now include parts of Turkey, Syria, Irag and Iran ( Onwueme and Sinha, 1991).

The major cereal crops in Nigeria  are rice, maize,  sorghum,  millet,  wheat, pearl, sugar cane and fonio millet with rice ranking as the sixth major crop in terms of the  land  area  while  sorghum  account  for  50%  of  the  total  cereal  production  and occupies about 45% of the total land area devoted to cereal production in Nigeria ( NEARLS, 1996 ).

The role of cereals to modern society is related to its importance as food crop throughout the world. In most parts of Asia and Africa, cereals products comprises 80% or more of the average diet, in the United State, between 20-25% ( Onwueme and  Sinha,  1991).  Cereals  are  the  major  dietary  energy  suppliers  and  provide significant  amount  of  protein,  minerals  (potassium  and  calcium)  and  vitamins  ( vitamin A and C) ( Idem and Showemimo, 2004). Cereals are consumed in a variety of forms, including pastes, noodles, cakes, breads, drinks etc. depending on the ethnic or  religious  affiliation.   The  bran,  husk,  plant  parts  and  other  residues(  after processing) are useful as animal feeds and in the culture of micro-organism.  Wax syrup and gum are extracted  from cereals for industrial  purposes ( Ismaila, Gana, Tswanya and Dogara, 2010).

Agriculture is the economic heart of most countries and most likely source of significant economic growth (DFID, 2003). It has been observed as the major and certain path to economic growth and sustainability. In spite of the dominant role of the petroleum sector as the major foreign exchange earner in Nigeria, agriculture remains the mainstay of the economy (NEEDS, 2004). Apart from contributing  the largest share of gross domestic product (GDP), it is the largest non-oil export earner, the largest employer of labour and a key contributor to wealth and poverty alleviation, as a large percentage of the population derive their income from agriculture and related activities (Ayinde, Adewumi and Omotosho, 2009).

Moreover,  in  order  to  increase  productivity,  Nigeria’s  agriculture  needs  to embrace science-based technology and the use of fertilizer, improved seed and crop protection   products.   Since   land   expansion   is   limited,   without   science   based agricultural inputs, agricultural production will decline and fall (Ayinde et al, 2009). Despite  the  laudable  efforts  of  the  nation  to  improve  crop  production,  Nigeria’s agricultural sector is still characterized by low yields attributable to the use of crude implements, a low level of input and limited area under cultivation among others. Hence, Nigeria has to adopt policies that will encourage an agricultural sector that has a  high  investment  rate.  A  key  element  of  this  strategy  is  an  efficient  and  well functioning  policy  on  agricultural  inputs  market,  making  use  of  the  following complements, among which are: Fertilizer, improved seed variety and crop protection product. Thompson, Vander-Meer, Alex and Kane (2004) saw the need to invest in policy  and  regulatory  reforms  in  the  fertilizer  sector  as  well  as  establishment  of government and regulatory capacity.

1.2      Problem Statement

The fragility and high susceptibility of the soils in Nigeria to degradation and loss of nutrients make augmentation through the use of fertilizers necessary to obtain reasonable yield (Alimi, Ajewole, Awosola and Idowu, 2006). Nigeria’s agricultural policy   framework   has   gone   through   a   number   of   evolutionary   process   and fundamental changes that reflected, in a historical perspective, the changing character of agricultural development problems and the roles which different segments of the society were expected to play in tackling these problems. But in the main, the form and direction of agricultural policy vis-à-vis fertilizer policy at a point in time were dictated  by  the  philosophical  stance  of government  on the  content  of agricultural development and the role of government in the development process (Olukoya, 2007).

There have been inconsistencies in fertilizer policy in Nigeria over the years. Making retrospectical review of the Nigerian fertilizer policy reveals an inconsistency of government fertilizer policy over the years. Many policies have been formulated

right from the pre-structural adjustment period (1970-1985), the Structural Adjustment Period (SAP) in 1986 and the post structural adjustment period (Bello, 2006). Up till

1996, the federal government had free monopoly on the distribution of fertilizer in Nigeria.  But with effect  from 1997,  trade in fertilizer  was liberalized  and private importers were now free to import and sell fertilizer in the open market, subsequently, this forms the liberalization period.

Despite the various policy reforms and campaign by the federal government to encourage the use of fertilizer, farmers are yet to attain the optimum fertilizer use rate. Fertilizer use in Nigeria averages 8-10kg/ha (FFD, 2006A). If all our production stays in Nigeria, we can raise fertilizer use rate to 100kg/ha (Okoloko, 2006). If this is required when Nigeria does not want to export food or cash crop at all, then a higher rate should be expected if we are to consider exporting products, in order to meet up with the NEEDS agricultural crop production target. With the current application rate, Nigeria is still far from achieving this (NEEDS, 2004).

In other words, critical questions which this research attempts to answer include:

      Does the distribution of fertilizer in 1997-2006 any better off to the distribution in 1986-1995/6?

      Do farmers’ use- rate of fertilizer in the second policy (1997-2006) better than in the first policy era (1986-1995/6)?

      Has the use of fertilizer in the second policy era (1997-2006) any improvement on crop  yield  over  the  first  policy  era  (1986-1995/6)  upon  which  the  new fertilizer  policy  was  formulated,  especially  cereal  crops  that  depend  on fertilizer so much?

 What has been the effect of the past fertilizer policy on crop production?

These  questions  require  deep  scientific  analysis  so  that  current  efforts  to revamp  the  fertilizer  sector  will  be  well  guided  and  based  on  sound  judgement. Previous  studies  by  Olukoya  (2007)  limits  itself  to  the  important  role  of  the agricultural  sector in engendering  sustainable  development;  and also Ayinde et al (2009) focused on crop production in Nigeria. Nagy and Edun (2002) focused mainly on Nigeria’s fertilizer policy and suggested alternative market-friendly policies.

While these studies are important, they do not alone provide the critical information required by policy makers towards the reforms in the fertilizer sector. This, therefore, informed the need for this study so as to bridge the knowledge gap in the impact of past fertilizer policy on crop production in Nigeria.

1.3      Objective of the Study

The broad objective of this study was to examine the impact of fertilizer policy on crop production in Nigeria. Specifically, the study sought to:

(i)       identify, and compare the distribution of fertilizer for the two policy periods

(1986-1995/6) and (1997-2006);

(ii)      compare the use rate of fertilizer for the two policy periods;

(iii)     compare the yield of some fertilizer dependent crops over those policy periods, especially cereal crops (such as maize, rice, millet and sorghum);

(iv)     determine the impact of fertilizer policy on crop production, and

(v)      derive lessons from the study and proffer appropriate measures.

1.4      Hypotheses of the Study

The null hypotheses that guided the study are that:

(i)       there is no significant difference in the amount of fertilizer distributed during the two policy periods,

(ii)      there is no significant difference on   cereal crop yield (maize, rice   sorghum and millet) in the two periods; and

(iii)      fertilizer policy variables did not influence  cereal crop production.

1.5      Justification

Liberalization   policies   have   been   advocated   and   implemented   both   at international and national levels. Despite the application of fertilizer, crop yield at the average has not met up with food demand. Can Nigeria’s crop production output keep pace with the future demand? (AIAE, 2005).

Nigeria’s  food import  bill  for 2000 was N164 billion  (2001  constant  in naira) or

13.3% of total value of imports and N173 billion in 2005 (CBN, 2006). This implies

that there should be a campaign for a better fertilizer use via policy(s) that must meet up with the food demand (Nwagbo, 2005).

From the foregoing, an efficient fertilizer policy is urgently needed. But how can a better and an efficient fertilizer policy be formulated if a critical look is not done Therefore, there is a need to examine the impact of the past Nigerian fertilizer policy. There should be juxtaposition,  critique and a better policy framed out to meet the present need of improved agricultural production in Nigeria.

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