Project Materials

AGRICULTURAL PURCHASING IN NIGERIA: PROBLEMS AND PROSPECTS

Chapter one

INTRODUCTION

1.1 Background of the Study

Agriculture is and continues to be a significant sector in Nigeria. Agriculture has and continues to be an important component of the Nigerian economy, despite the overemphasis on crude oil. Historically, its practice has been limited to subsistence levels.

According to reports from food and agricultural organisations, this will happen by 2010. Nigeria will be able to meet only 37% of its estimated 150 million people’s food needs. Without a doubt, agriculture provides the most opportunities for employment, income, and food for the Nigerian people.

Its inherent position as a supplier of raw materials for vital industries and a major source of foreign exchange earnings has contributed to its dominance among all recognised occupations.

However, the performance of this sector in terms of agricultural production has varied substantially over the last two decades, and the enabling environment that existed at different times has had a significant impact on it.

Agricultural purchasing appears to begin when farmers plan their output or anticipate market pricing. To the layperson, agricultural purchasing might be viewed as a bridge or connecting link between specialised agricultural producers and the end consumer.

However, as limited as this viewpoint is, a broader view of agricultural purchasing is that it is the performance of all business activities involved in the flow of agricultural production to the point of consumption, as well as the dynamic of agricultural marketers on food and raw-material demands in their territory, which appears to assist farmers in their production planning.

Other products are efficiently and successfully delivered to customers or users. Consumers typically want to get the most food value for the least amount of money.

Farmers desire the largest possible returns from the sale of their produce, and middlemen want to make the highest possible profit. Pricing rules and practices are thus key indicators for both middlemen and society as a whole.

To explain further to the intermediaries, price changes influence gross margin and profitability; for society, price changes have a direct impact on aggregate price levels in the economy and thus consumer welfare.

Agricultural products are uniquely dependent on an adequate and flexible transportation system, which is why the Ministry of Agriculture focusses on geographic movement to acquire market value, as well as the extent to which climate or weather determines where, when, and in what quantity transportation services are required.

This study focusses on the issues and opportunities of agricultural purchases within a state, and within states, there is a need for exchange, which calls for the use of powerful or influential middlemen.

1.2 Statement of the Problem

Agricultural productivity in Imo state has been substantially curtailed, resulting in a lack of food in the home and for export. The situation is different than it was previously, when there was enough of food for both people and for sale.

The current agricultural scarcity has prompted both consumers and industrial users to seek explanations. There are numerous reasons for the shortfall, including municipal disturbances and the country’s increasing pace of population increase.

Other factors include drought, an unfavourable external environment, and insufficient finance for agriculture and development.