CRITICAL ANALYSIS OF THE IMPLICATION OF FUEL HIKE ON FOOD PRODUCTION AND SUPPLY IN NIGERIA
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CRITICAL ANALYSIS OF THE IMPLICATION OF FUEL HIKE ON FOOD PRODUCTION AND SUPPLY IN NIGERIA
Chapter one
Background of the study
A historical look at the Nigerian economy and its history reveals farming as an important economic corridor and source of foreign cash. Agriculture contributed for more than 80% of export earnings and wages in the 1960s, but it has since declined to account for approximately 65% of economic growth.
In 1970, agriculture accounted for 34% of GDP (Daramola, 2004), but in 2003 it accounted for almost 50%. Agriculture currently accounts for 41% of the overall economy, while crude oil accounts for 13%.
Agriculture accounted for nearly 50% of the GDP in 1970 and 34% in 2003. (Daremola, 2004). Currently, 41% of the actual industries are agricultural, with crude oil accounting for 13%.
Despite the fact that agriculture is no longer the largest contributor to Nigeria’s GNP and major source of foreign exchange income, the oil sector as a whole has experienced phenomenal growth.
Agriculture also dominates in terms of employment and ties to the rest of the economy, as stated by Abayomi (1992). Agriculture employs two-thirds of Nigerians and accounts for one-third of GDP. (Agro-Ind. 2002). In the early 1970s, the expansion of the Nigerian oil sector led to substantial fundamental shifts in the economy.
In response to the oil boom, public spending has increased, promoting a variety of economic activities such as infrastructure construction, the establishment of new institutions, the expansion of existing institutions, and the importation of consumer products.
These developments have favoured the appreciation of the naira’s value (Dutch disease), but there has been no similar growth in commercial agricultural items (Kwanashie et al., 1998; J. Olusi and M. A. Olagunju, 2005; A.T. Edun, 2012).
Humans and animals account for the majority of the energy needs for agricultural output. Petroleum products have been used in agricultural production, as evidenced by records.
The usage of motorised water and diesel-powered tractors for agricultural mechanised operations demonstrates this modest but significant difference from human and animal power (Sambo, 2005).
In the meantime, a strong and productive agriculture sector allows a country to feed its growing population, create jobs, trade, and offer raw materials to businesses. Agriculture, due to its multifunctional nature, has a multiplier effect on any country’s socioeconomic and industrial fabric.
STATEMENT OF PROBLEM
Nigeria is one of the countries where the price of domestic oil has risen since the 1970s. In addition to three major refineries, Nigeria continues to import petroleum products to meet domestic demand. The downstream issue in Nigeria’s petroleum industry posed a significant challenge for the majority of population.
This is because the country’s constant rise in fuel prices was caused not just by bunker vandalism, oil spills, and some dealers’ conduct, but also by refinery inefficiencies. This has an impact on the country’s economy due to ongoing fuel supply difficulties, which contribute to environmental and economic issues.
The finding of crude oil has had both a beneficial and negative impact on Nigeria’s farm productivity. This has a negative impact on the populace in the areas near petroleum wells.
Any of those populations is subjected to environmental damage, resulting in a lack of agricultural produce, primarily for subsistence purposes. It has an impact on various elements of society and the economy.Thus, this study tries to critically examine the consequence of fuel hikes on food production and supply.
GOALS OF THE STUDY
The following are the key objectives.
1. To explore the causes of fuel price increases in Nigeria.
2. Investigate whether the causes of the rise in gasoline prices affect agriculture and food production in Nigeria.
3. To investigate how much it has affected the national economy.
RESEARCH QUESTIONS:
1. What are the causes of Nigeria’s rising fuel prices?
2. How do these sources of rising fuel prices influence agricultural and food production in Nigeria?
3. What effect has it had on the national economy?
Significance of the Study
This report will be extremely useful to the government as it considers how to mitigate the threat of rising fuel prices.This study will also act as a reference material for students and scholars who may like to conduct future research on this study.
SCOPE OF THE STUDY:
This study will look at the impact of fuel price increases on food production and supply in Nigeria, as well as the potential long-term consequences.The sample responder for this study will be a Lagos state resident.
Limitations of the Study
The researcher’s key limitations when conducting this research were financial constraints, a lack of materials, and the need to balance research and academic work.
Definition of Terms
FUEL HIKE: A rapid or significant increase in the price, rates, and amount of fuel.
FOOD PRODUCTION is the process of preparing food by transforming raw materials into final goods in the household or food processing companies.
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