Thinking about our focus on Agriculture
We are supposed to have been focusing on agriculture recently but the growth in that sector has been slowing. The Q2 GDP numbers which were released last week show the agriculture sector slowing to the lowest it has been since 2010 bar one quarter in 2018.
If you look at the annual growth data then the numbers are even worse.
Altogether surprising since the sector has received the most policy focus from government recently. The easy thing is to say “Oh well the policy environment is bad and bla bla bla”. To be clear some of that is bad and things like the security crisis cannot be overlooked. But I don’t know.
I took a look at FAO data and it seems like a significant part of the growth since the 1980s has been built on just using more land.
Barring a few blips we have used more and more land for agriculture but the value of produce per hectare has not really changed much.
I know it looks like the value per hectare grew a bit but remember that prices are changing. Once you adjust for food prices (using FAO’s food price index) then with a few exceptions, there has been little growth in the value of agriculture produce per hectare.
There was a bump shortly after the return to democracy which lasted for a few years but that has collapsed and we seem to have returned to the levels of the 1980s. Essentially, it seems like a lot of the growth has been driven by just using more land.
But, land is limited, both for geographical and security reasons. Nigeria’s total land size is about 92 million hectares out of which an estimated 73 million can be used as agricultural land and which 37 million is actually considered arable land. For context in 2018 we used 56 million hectares for agriculture.
Which leads to the obvious next question. Have we reached peak agriculture land use growth? Is growth slowing because farmers are moving into less suitable land? Do we have to shift policy focus to improving yields which will have implications for land sizes and employment in agriculture? So many questions.