CHAPTER ONE

INTRODUCTION

1.1       Background to the study

At independence in 1960, agriculture stood out as the most important sector of Nigeria‟s economy in several aspects. It employed over eighty (80%) of the nation‟s work force, served as the most important foreign exchange earner and constituted a major source of government revenue (CBN, 2000). The role of agriculture remains significant in the Nigerian economy despite the strategic importance of the oil sector. It accounts for more than one- third of the total domestic product (GDP) and labour force (FAO, 2003; World Bank, 2003). In an annual report, (CBN, 2004) reported that the real sector of the economy recorded a relatively impressive performance in year 2004 as the Gross Domestic Product (GDP) grew by 6.1 percent compared with 5.2 percent in the year 2003 and that agriculture is one of the major sources of the growth. Agriculture witnessed an increase of 6.2 percent growth in year 2004 compared to the 5.6 percent recorded in the year 2003 and the average of 4.6 percent for the period of 2001 to 2004 as the output of staples increased from 99,902 metric tonnes in year 2001 to 121,936.2 metric tonnes in year 2004. Although (Eme, 2004) described Nigeria as a food insecure country, the food problem which started in the mid-1960 has continued to deepen several decades after independence (Ime, 2002). The nation‟s agricultural production is still largely in the hands of the small-scale farmers with small holdings ranging from 0.05 to 3.0 hectares of land area, low capitalization and low yield per hectare (Ogundari and Ojo, 2007).

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