The uniqueness of this research work lies in the decomposition analysis of the concerned problem, though many researches have been conducted in this area but only few had satisfactorily discussed the role of agriculture in poverty alleviation and national development. The paper explicitly observes the role of agriculture in reducing poverty vis-à-vis accelerating economic development. This paper provides further empirical evidence on the effectiveness of agricultural development opportunities in the rural area and their relative sensitivity to agricultural output expansion in Nigeria for the period 1976-2004. The procedure adopted in this study was based on the Ordinary Least Square (OLS) regression method and co-integration test, which is an improvement to the former. The results show that, all the agricultural development opportunities identified captured with different variables are all equally significant in enhancing the level of agricultural output in Nigeria within the period of investigation. It is also evident from our empirical findings that agricultural output has more statistical sensitivity on agricultural export and fertilizer distribution for the observed data. Thus for a better stabilization of the economy through increased agricultural production, the government should give proper attention to its implementation along with establishing agricultural fund scheme to serve marginalized rural farmers, enhanced supply of agricultural inputs and fertilizers, provision of rural infrastructure through integrated rural development scheme, domestic agricultural product protection policies and appropriate product pricing policies to enable farmers operate profitably.

1.0 INTRODUCTION

Agriculture is the predominant activity in most of the zones in Nigeria, percentage of persons working in agriculture ranges between 24.4 and 85.1 percent across zones in Nigeria. With respect to states, the activity ranges between 2.4 and 91.7 per cent, majority of states having over 50 percent, (CBN,2000).Increases in agricultural output brought about by increase in land and labour productivity, make food cheaper; benefit both rural and urban poor people who spend much of their income on food. Under the right conditions, increase in agricultural productivity causes the incomes of both small and large farmers to increase and generate employment opportunities.

The UN human Poverty Index in 1999, credited Nigeria with 41.6%, captured the phenomenon more succinctly as the figure placed the nation as amongst the 25 poorest nations in the world. As at 2004, the HPI (Human Poverty Index) value for Nigeria, 40.6, ranks 76th among 102 developing countries for which the index has been calculated. The FOS study indicates that the poverty level in the country has risen from over 40% of the population in 1992 to 65% in 1996. Poverty is a plague affecting people all over the world; and a symptom of underdevelopment. According to the World Bank (1996), poverty is hunger, and lack of shelter. Poverty is a state where an individual is not able to cater adequately for his or her basic needs; like food, cloth and shelter.

Poverty alleviation is an attempt to restructure the battered economy and reduce the widespread of destitution through government policy intervention in order to give power to the poor and improve their general standard of living. Poverty alleviation is a major issue on the policy agenda of government of many countries, most especially developing countries where the incidence is very high. It is widely acknowledged that the fight against poverty is necessary condition for sustainable long run growth. Several poverty alleviation programmes have been implemented in Nigeria, but they have yielded no meaningful result due to their arbitrary targets, shoddy execution and institutional weaknesses and deficiencies.

The foundation of these potential was laid by agricultural sector that effectively and efficiently played its traditional role. But in an economy like Nigeria, the agricultural sector had suffered setbacks attributed to widespread poverty and food insecurity. In the Nigerian economy and many developing countries, poverty is more pronounced in the rural sector where agriculture is practiced at subsistence level. Almost all rural dwellers depend on income from agricultural output for survival. About 70% of the total labour force is employed by the agricultural sector, therefore, agricultural transformation means a lot in reducing poverty alleviation and aiding national growth. Invariably, every increase in income or per capita agricultural output enhances the incomes of the poor and reduces the number of people living on less than US$1 a day in this area, leading to increase in capital formation.

It is with this quest for recent empirical-econometric facts that motivated this study, poised with the aim of finding out how agricultural output can help to reduce, if not eliminate poverty and enhance developmental growth. It is equally aimed at providing policy information for the government. Time series data from 1976-2004 for the variables from the relevant data sources were gotten and the Ordinary Least Square (OLS) technique used to get the regression results.

The remaining part of the study is structured as follows: section II is the literature review, followed by the theoretical framework. The next is the methodology and analysis of data in Section IV. Conclusion is in the last section

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