CHAPTER ONE
- BACKGROUND INFORMATION
In the pre-and post- independence era (1930 to 1965), the Nigerian economy was predicated on agriculture. Agriculture employed about 70 to 80% of the country‟s labour force (Falusi and Olayide, 1980) and contributed 60% of the nation‟s gross domestic product (GDP) and foreign exchange earnings (CBN, 1985). Nigeria was heavily dependent on agriculture. It was the major source of funds for implementing the first development plan, 1962-1968 (Umaru and Zubairu, 2012).
In the oil boom era (1966 to 1977) the oil sector came to a prominent position as an important source of the national revenue. The oil sector which used to contribute a meager 2.6% of the GDP in 1960 contributed 57.6% to the GDP in 1970 and up to 99.7% in 1972 (Keke, 1992). Agriculture, on the other hand, contributed only 12% to the GDP in 1970 which culminated in rising food import bill leading to the persistent huge deficit in the balance of payments over the years (Ugwu, 2007). Within a decade up to 1983 however, agricultural output in Nigeria declined to 1.9 percent and export fell to 7.9 percent. Agricultural imports as a share of the total imports rose from 3 percent in the late 1960s to 7 percent in the early 1980s. Nigeria‟s unfavorable agricultural development resulted from the loss of compositeness among farm exports as the real values of the Nigerian Naira appreciated substantially from 1970 to 1972 and from 1982 to 1983. According to the Central Bank of Nigeria report, “export-oriented agriculture declined from 42 per cent of the total export in 1970 to less than 3 per cent in 1985.” (Umaru and Zubairu, 2012).