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IMPACT OF GOVERNMENT AGRICULTURAL BUDGET INCREASES ON STAPLE CROP PRODUCTION AND FOOD SECURITY IN NIGERIA

Abstract

This research investigates how increases in Nigeria’s agricultural budget influence staple crop production and food security outcomes. Nigeria’s agricultural sector possesses significant potential yet faces systemic constraints including insufficient financial support, climatic unpredictability, and infrastructure deficiencies. These factors have collectively impaired productivity across key staple crops such as maize, rice, and cassava, worsening food insecurity nationwide. Utilizing econometric methods applied to secondary data from the Central Bank of Nigeria and World Bank indicators spanning 1981-2023, the analysis demonstrates that heightened government spending on agriculture encompassing capital expenditures, recurrent costs, subsidies, and credit programs yields measurable improvements in crop output and food security metrics. However, current funding levels persistently fall short of international standards exemplified by the Maputo Declaration’s recommended 10% allocation threshold. The study underscores the imperative for consistent agricultural investment to boost productivity, minimize reliance on food imports, and establish durable food security. Strategic priorities for future funding should emphasize irrigation infrastructure, farm mechanization, and climate-resilient agricultural techniques to strengthen Nigeria’s agricultural foundation.

Keywords: Agricultural budget, staple crops, food security, government expenditure, Nigeria

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Nigeria, as Africa’s most populous nation with over 200 million inhabitants, depends significantly on agriculture as a foundational pillar of its economy. The sector contributes approximately 25% of the nation’s Gross Domestic Product (GDP) and employs roughly 70% of the working population (Azebi, 2025). Agriculture plays a decisive role in ensuring food security, particularly through the cultivation of staple crops, including maize, rice, cassava, yam, and sorghum, which constitute the primary dietary components for most Nigerians. However, despite its economic and nutritional importance, agricultural productivity remains hindered by persistent challenges such as limited access to modern farming technologies, inadequate infrastructure, and inconsistent policy implementation.

Recent fiscal interventions have sought to address these systemic inefficiencies through budgetary allocations. Historical trends indicate fluctuating agricultural budget commitments, though recent years have experienced marginal increases. The 2025 federal budget, for example, earmarked 1.75% of total expenditure for agriculture, representing a rise from ₦1.01 trillion in 2024 to ₦2.27 trillion (Trade.gov, 2025). Despite this upward trajectory, allocations remain substantially below the 10% target established under the Maputo Declaration. These financial injections are intended to bolster agricultural output by financing irrigation initiatives, subsidizing essential inputs such as fertilizers and seeds, and expanding credit access for smallholder farmers.

Empirical research underscores the positive correlation between government expenditure and agricultural productivity. During the implementation of the Agricultural Transformation Agenda (ATA) from 2011 to 2015, heightened public investment facilitated increased procurement of improved seeds and agrochemicals, with enduring effects observed in subsequent years. Household-level data reveals a 21-percentage-point surge in seed adoption among farming communities following the ATA (Hatzenbuehler & Mavrotas, 2024). Additional studies corroborate that both capital and recurrent agricultural expenditures exert a measurable influence on output growth, thereby enhancing food availability and market stability (Adokwe et al., 2025).

Nevertheless, food insecurity persists as a pressing concern, with an estimated 25 million Nigerians experiencing acute hunger in 2023 due to compounding factors such as violent conflict, climatic volatility, and macroeconomic instability (AFAP, 2024). Staple crops, constituting 87.6% of total agricultural production, remain critical for alleviating malnutrition; however, yields continue to lag behind global benchmarks. This study investigates the potential for expanded budgetary allocations to mitigate these disparities, leveraging contemporary academic discourse to elucidate the interplay between fiscal strategy and sustainable agricultural development.

1.2 Statement of the Problem

Despite incremental budgetary increases allocated to Nigeria’s agricultural sector, staple crop production continues to lag behind population growth, exacerbating food insecurity. Historical data reveals an average allocation of under 2% of the national budget between 2020 and 2024 (International Budget Partnership, n.d.), leading to persistent deficiencies in rural infrastructure and limited access to critical farming inputs. The shortfall is particularly evident in rice production, which remains import-dependent despite policy interventions, costing the nation billions annually.

Further compounding the issue are systemic inefficiencies in budget execution, alongside exogenous shocks such as conflict-driven displacement and erratic climatic conditions. Empirical analysis indicates that while agricultural spending correlates positively with food security outcomes, its marginal impact remains negligible, a unit increase in expenditure results in a mere 0.0001-unit improvement in food security indices due to implementation gaps (Adokwe et al., 2025). If unaddressed, these structural constraints threaten to intensify poverty and malnutrition rates as domestic agricultural productivity increasingly fails to meet the demands of a growing population.

1.3 Objectives of the Study

The main objective is to evaluate the impact of government agricultural budget increases on staple crop production and food security in Nigeria. Specific objectives include:

1. To assess the trends in government agricultural budget allocations from 2020 to 2025.
2. To examine the effects of these increases on the production of staple crops such as maize, rice, and cassava.
3. To analyze the relationship between budget enhancements and indicators of food security.
4. To recommend policy measures for optimizing agricultural expenditures.

1.4 Research Questions

1. What are the trends in Nigeria’s government agricultural budget allocations between 2020 and 2025?
2. How do budget increases influence the production levels of staple crops in Nigeria?
3. What is the nexus between government agricultural expenditures and food security outcomes?
4. What policy interventions can enhance the effectiveness of agricultural budget increases?

1.5 Research Hypotheses

H0: There is no significant positive impact of government agricultural budget increases on staple crop production in Nigeria.

H1: There is a significant positive impact of government agricultural budget increases on staple crop production in Nigeria.

H0: Government agricultural expenditures do not significantly enhance food security in Nigeria.

H1: Government agricultural expenditures significantly enhance food security in Nigeria.

1.6 Significance of the Study

This research holds substantial importance for policymakers by offering empirically grounded insights into agricultural budget optimization strategies aimed at enhancing staple crop productivity and food security outcomes. The study provides critical value to farmers through its examination of subsidy and credit accessibility mechanisms, while simultaneously advancing academic discourse through contemporary data integration. Its findings directly align with Nigeria’s pursuit of Sustainable Development Goal 2 targets concerning hunger eradication.

1.7 Scope of the Study

The investigation concentrates on analyzing federal agricultural expenditure growth patterns between 2020–2025, evaluating their consequential effects on major staple crops (maize, rice, cassava) and measurable food security parameters within Nigeria. Methodologically, it engages with verified secondary datasets sourced from domestic and international repositories.

1.8 Limitations of the Study

Potential constraints emerge from possible inconsistencies within government archival data systems. While econometric controls are implemented to mitigate confounding factors such as fluctuating global commodity prices, the exclusively quantitative framework inherently excludes qualitative dimensions including direct farmer experiential accounts.

1.9 Definition of Terms

• Staple Crops: Primary food crops like maize, rice, and cassava that form the basis of the Nigerian diet.
• Food Security: Availability, accessibility, utilization, and stability of sufficient nutritious food (FAO definition).
• Government Agricultural Budget: Public funds allocated to agriculture, including capital and recurrent expenditures.

References

Adokwe, E. I., Ezeanyeji, C. I., Obi, C. O., & Akabua, C. A. (2025). The nexus between government agricultural expenditure and food security: A case of Nigeria. International Journal of Innovative Finance and Economics Research, 13(1), 1-15. https://www.seahipublications.org/wp-content/uploads/2025/01/IJIFER-M-13-2025.pdf

Azebi, O. I. (2025). Government expenditure and agricultural output in Nigeria. International Journal of Policy Review and Development Strategies, 25, 1-12. https://internationalpolicybrief.org/wp-content/uploads/2025/08/ARTICLE-25.pdf

Hatzenbuehler, P. L., & Mavrotas, G. (2024). Assessment of the persisting effects of increased public funding for agriculture in Nigeria. Journal of Social and Economic Development. https://doi.org/10.1007/s40847-024-00370-4

International Budget Partnership. (n.d.). Improving budget credibility for access to agricultural inputs and services in Nigeria. https://internationalbudget.org/wp-content/uploads/Improving-Budget-Credibility-for-Access-to-Agricultural-Inputs-and-Services-in-Nigeria.pdf

U.S. International Trade Administration. (2025). Nigeria – Agriculture sector. https://www.trade.gov/country-commercial-guides/nigeria-agriculture-sector

African Fertilizer and Agribusiness Partnership (AFAP). (2024). Assessment of the agricultural sector towards food security. https://afap-partnership.org/content/uploads/2024/10/1-of-3-Nigeria-Agricultural-Landscape-Analysis-Report.pdf