This study is an The Effect of agricultural development on the Nigerian economy, a case study of a poultry sub-sector in Rivers State. In particular, the socioeconomic characteristics of poultry producers, profitability, technical efficiency (TE) and the size of poultry production in the study area are examined. Primary data were obtained from the 32 poultry producers in the LGA study. The data collected were subjected to descriptive statistics, an agricultural budget technique and a stochastic marginal production function. The results showed that the majority of respondents (66%) were men between the ages of 4049 years and with an average of 8 years of work experience. In addition, it was observed that the poultry business in the region was dominated by small poultry farms, which represented approximately 53% of the total farms. It was discovered that more than 90% of production costs were based on variable inputs. The result also showed that a large farm had the lowest production cost per bird (N3,453.21) and overall production costs increased as the size of the farm decreased. Net farm income per bird was N1,360 for small farms N1,474 for medium farms and N1,463 for large farms. These values ??imply that poultry production was a profitable business in the region and large farms were the most profitable. The maximum likelihood estimate of the coefficients of the stochastic limit model for poultry production in the study area shows that the estimated parameters were all positive.Only the parameters estimates of farm size, veterinary services, feed intake and labour were of statistically significant, indicating that they contributed incrementally to the total value of poultry-egg output in the study area. Productivity analysis showed a return to scale (RTS) of 0.89 indicating that the sampled poultry-egg farms operated in the rational stage II of the production surface. The large poultry-egg farms were most technically efficient with T.E. indices ranged from 56% to 95%. The study identified limited finance and high cost of inputs as the most serious constraints to the poultry-egg business in the area. It is recommended in the study that a modern feed mill should be established in the state by all stakeholders in the poultry sub-sector; extension agents should be encouraged; credit and inputs should be made available and affordable to poultry farm owners.

TABLE OF CONTENT

Abstract

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

1.2 Statement of the Problem

1.3 Objective of the Study

1.4 Research Questions

1.5 Justification of the Study

1.6 Scope/limitation of the study

CHAPTER TWO

LITERATURE REVIEW

2.1 Literature review

2.2 Economic Importance of Poultry Production

2.3 Economies of Size in Poultry Production.

2.4 Empirical Studies on Profitability of Poultry-Egg Production

2.5 Conceptual Framework

2.5.1 Concept of technical efficiency

2.5.2 Factors influencing technical efficiency

2.6 Description Of The Nigerian Economy And It's Agricultural Sector

2.7 Stochastic Frontier Production Function

2.8 Problems Associated with Poultry Production

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design

3.3 Method of Data Collection

3.4 Sources of Data

3.5 Instrumentation

3.6 Reliability

3.7 Validity

3.8 Analytical Techniques

3.8.1 Descriptive statistics

3.4.2 Farm budgeting techniques

CHAPTER FOUR

RESULTS AND DISCUSSION

CHAPTER FIVE

SUMMARY, CONLUSION AND RECOMMENDATIONS

5.1 Summary

5.2 Conclusion

5.3 Recommendations

REFERENCES

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Agriculture is the bedrock for economic growth, development and poverty eradication in the developing countries. Agriculture has also regarded as the engine and panacea to economic prosperity. In the words of Gunner Myrdal, “The battle for long-term economic growth will be won or lost in the agricultural sector”. However, how this path leads to economic prosperity is still subject to debate among development specialists and economists.

Nigerian economy in past decades strives on the agricultural sector. The agricultural sector is reputed as the mainstay of the economy in the early 1960?s. The agricultural sector is seen as the key driver for growth and development. In fact to further buttress the pivotal role the agricultural sector plays in the Nigerian economy, the agricultural sector is part of the Millennium Development Goals (MDG?s) program of poverty reduction in Nigeria. In most developing countries (low and middleincome countries), the agricultural sector remains, the largest contributor providing inputs, food, employment opportunities, raw materials for other industries, provision of foreign earnings from exportation of the surpluses, and more importantly the enormous advantage of the value added in the various production process (Okoro, 2011).

Studies reveal that most developing countries of the world are predominantly agrarian and rural in nature. A substantial proportion of the Nigerian population dwells in the remote areas, and this brought the countryside to the attention of policy and decision makers. (Dim, 2013).

After the discovery of the black gold, oil (post-oil boom), a decline in the agricultural sector?s share was recorded, in term of its contribution to Real Gross Domestic Product (RGDP). Empirical research shows that the proportion of the agricultural sector in Gross Domestic Product had been 29.2 percent and 33.3 percent between 1970 and 1980. According to Aigbokhan (2011) prior to the oil boom in the 1950s and 1960s the agricultural sector accounted for over 63 percent and 54 percent of RGDP respectively.

Emeka (2007) asserts that the agricultural sector creates jobs for a large number of the teeming unemployed population in Nigeria, which accounts for over 65 percent of the entire population. This high percentage comprises of subsistence farmers using crude and rudimentary implements like hoes, cutlass and shovel among others to cultivate fragmented farmlands as a source of livelihood. In affirmation of Emeka, Mackie (1964), Abayomi (1997), Abdullahi (2002); World Bank, (2007), all agree that, the agricultural sector contributes to the economy in four perspective areas namely; provision of products, contribution of inputs, market participation i.e. marketing and accrual from foreign exchange.

1.2 Statement of the Problem

According to Manyong et al. (2005) Nigeria is endowed with a large deposit of agricultural resources and huge arable land for the cultivation of crops and rearing of animals. In the 1960s and 1970s the agricultural sector was constituting over 65 percent of total export. The Nigerian agricultural sector was renowned for the export of cash crops (agricultural crops and produce with export value) namely cocoa, rubber, hides and skin, groundnut palm among a host of many others. The agricultural sector holds an enormous potential for the growth and economic development of the country.

In a similar study carried out by (Bekun, 2011) titled Economics of Yam Marketing in Minna, Nigeria. The study reveals that over 31.5 million metric tons of yams was produced in the study areas overwhelmingly huge, enough to engage more than half of the population in the study area. Regardless of vast potentials the agricultural sector possesses, the industry endowment has not been fully harnessed. There has been a downturn in the late 1970s and figures have dropped significantly to 20 percent at the end of the 1990s. The decline in the agricultural sectors? contribution is explained by the oil boom in the late 1970s. The 1970s outlined the period when oil was discovered in commercial quantity. This discovery has led to the neglect of the agricultural sector and more focus on the petroleum sector (energy sector). The sole dependence on oil (energy sector) turned Nigeria into a monoculture economy.

With the agricultural sector being so productive with arguably massive potential, why then has it been neglected? The answer to this question prompts the motivation for this study. Recent literature is attempting to estimate the relationship between the agricultural sector and economic growth, do so using cross-sectional data. We argue that this methodology is flawed in the sense that the relationship between the agricultural sector and economic growth is best captured over time. Given the so few studies done using time-series data, there is a gap in explaining the real effect of the agricultural sector on economic growth in Nigeria. This gap is what this study aims

to fill.

The dearth in the quantity and quality of protein supply in Nigeria is a challenge that is beyond dependence on plant protein alone. According to Fasasi (2006), Nigeria has a total land area of 98.3 million hectares out of which 71.3 million hectares are cultivable, while 34.2 million hectares representing 48% of the cultivable area are actually being cultivated and less than 10% of the arable land is irrigated. It suffices therefore, to explore quality protein of animal origin of which poultry egg is of prime importance.

Globally, egg production is growing rapidly (39% over 10 years) with Asian countries in particular having the high rates of increase; China and India with increase of 42% and

67% respectively (Scanes, 2007). Nigeria hosts more than 45% of the poultry in the West African sub region (WHO, 2006) and its poultry population is estimated at 140 – 160 million comprising of 72.4 million chicken, 11.8 million ducks, 4.7million guinea fowl, 15.2 million pigeon and 0.2 million turkeys (FAO, 2006). This figure accounts for 71.38% of the total livestock kept in the country and supplies 17% of animal protein need of the population (Oji and Chukwuma, 2007).

The Ministry of Agriculture and National Resource (1998) and Eduvie (2002) stated that Nigerian poultry industry is dominated by small-holder farmers who on the aggregate raise bulk of the birds for egg production and meat, but individually rear less than 1000 birds using different production strategies in consonance with little resources available to them. Farming in general, has to use available inputs as efficiently as possible to achieve optimum production (Udoh and Akintola, 2001) and (Etim et al., 2005).

This study seeks to estimate the effect of the agricultural sector on economic growth using the growth and economic of poultry sub-sector of the economy. We also try to identify the existence of a long-run relationship between the agricultural sector and economic growth using the Johansen co-integration test. In this study, we also, by extension, determine the possible reasons for the neglect of this sector beyond the oil boom in 1970s and the impediments to the growth of the sector in Nigeria.

1.3 Objective of the Study

The primary purpose of this study is to investigate the impact of agricultural sector on the Nigerian economy’s growth with special attention on the poultry subsector in river state. The specific objectives were to:

i. describe the socio-economic characteristics of poultry-egg farms owners in the study area

ii. determine the scale of operations of poultry-egg production in the study area

iii. determine cost, returns and profitability of poultry-egg production in the study area

iv. determine the technical efficiency of poultry-egg production in the study area

v. To the long-run relationship among agricultural sector and the Nigerian economy

1.4 Research Questions

i. What are the socio-economic characteristics of poultry-egg farms owners in the study area?

ii. What is the scale of operation of poultry-egg enterprise in the study area?

iii. Is poultry-egg enterprise profitable in the study area?

iv. What is the technical efficiency of poultry-egg production in the study area?

v. Is there any long-run relationship among agricultural sector and the Nigerian economy

1.5 Justification of the Study

Poverty, inefficiency and unemployment have been suggested by many empirical evidences as the areas of great concerns to policy planners as well as policy makers in developing countries. Nigeria has a great potential for better economic growth both in the short and long run than current experiences. The need to efficiently allocate productive resources as well as analyze profitability for development purposes cannot be over emphasized. Therefore, any attempt at studying efficient allocation of resources and measuring profitability on the farm represents an important source of achieving growth in the economy.

Another major motivation of this study stems from the belief that understanding the levels of inefficiency or efficiency can help address productivity gains in poultry egg production. The findings of the study will therefore help in identifying the most efficient means of combining increasingly scarce resources so as to maximize output from poultry-egg production, which will assist in bridging the gap between poultry products (protein) demand and supply in the study area in particular and the country in general.

The ability to quantify efficiency and profitability will help decision-makers to monitor the performance of the units under study. The study will serve as a means of providing information on the cost and returns structure for prospective investors in poultry egg production in the area. The knowledge of the scale of farming that is more technically efficient and profitable will help the farmers in decision making. To policy makers, the work will serve as a guide towards appropriate policy formulation. When the sources of inefficiency are identified, policy formulations to improve farmers’ performance can be effectively done. Finally, the results of the study will serve as a reference material to students and researchers for future studies.

1.6 Scope/limitation of the study

This study on the effect of agricultural development on the Nigerian economy, a case study of a poultry sub-sector in Rivers State.In particular, the socioeconomic characteristics of poultry producers, profitability, technical efficiency (TE) and the size of poultry production in the study area are examined. Primary data were obtained from the 32 poultry producers in the LGA study.