growth. There are three alternative strategies under this policy instrument, namely:
46 a) Import substitution industrialization
b) Export promotion industrialization, and c) Rural industrialization.
a). Import substitution industrialization is essentially intended to encourage the domestic manufacturing and servicing of agricultural inputs, spares, and supplies in order to promote stable supply and availability to farmers, increase affordability of the inputs, and the adoption of modern inputs. It also encourages the creation and strengthening of domestic capacity for the servicing, spares and adaptation of the relevant inputs. The policy instruments under this strategy might include:
i. the domestic manufacturing of fertilizers and other agro-chemicals, feeds, etc.
ii. the assembling and manufacturing of tractors, ploughs, equipment, and other agricultural implements, and
iii. the development of the relevant skills in the delivery, repairs, and servicing of inputs.
Such policies help to:
i. stabilize the domestic input market by shielding it from the effects of foreign exchange induced procurement problems.
ii. conserve foreign exchange, that otherwise would have been used to import these inputs.
iii. ensuring the timely availability of inputs, this policy instrument promotes the adoption of recommended innovations and inputs by farmers at a much faster rate than otherwise.
iv. encourage domestic production of previously imported agricultural products such as fruit juices, canned foods, baked foods and confectionary, etc, which help to conserve foreign exchange, as well as create profitable employment opportunities for domestic resources.
b). Export promotion industrialization: This is intended to encourage the export of agricultural products to improve farmers‘ revenue, as well as the international quality and competitiveness of farm products. Agricultural exports are mainly of two types, namely:
i. raw produce/materials, and
ii. semi-processed and processed products.
The export of processed products tends and helps to:
i. add greater value to domestic production and is particularly encouraged on account of this.
47 ii. link the farm sector to the agribusiness and manufacturing sectors, thereby creating
inter-industry and/or inter-sectoral linkages.
iii. build capacity in agro-industrial processing and domestic industrialization through a strategy of domestic utilization of agricultural raw materials.
iv. create self-reliance in food and industrial production, employment, and stabilization of domestic commodity markets.
c). Rural industrialization: This entails a conscious strategy of encouraging the establishment of cottage processing and manufacturing agro-based industries in the rural areas. This strategy is anchored on the belief that although agriculture is the major occupation of rural people, the processing of agricultural products before transporting them to the urban centres will considerably create value-added to agricultural production, create non-farm employment opportunities for rural residents, as well as facilitate the meaningful integration of the farm and non-farm sectors of the rural economy. Rural industrialization usually attracts such ancillary services to the rural area as rural health, educational, financial, infrastructural, and other social amenities. This strategy helps to:
i. discourage the rural-urban drift.
ii. stabilize agricultural production
iii. improve the terms of trade between agriculture and other activities
iv. promote the adoption of profitable agricultural technology and alleviate poverty 8. Agricultural sector budgets: Annual budget represent one of the most important instruments through which the government directs the performance of the economy in general, and the agricultural sector in particular. The budget is a government‘s expected revenue and expenditure plan in the current fiscal year. Thus, budget shows which sector(s) of the economy the government expects to obtain revenue for her operations, and also which sector and projects receive (greater) allocation of these resources. Budgetary allocation is therefore one way of determining the extent of priority attention accorded to the different sectors, and sub-sectors by the government. In essence, the budgetary allocation to agriculture relative to the other sectors indicates the extent of priority accorded to agriculture in the economy by the government in the fiscal year. Also, within the agricultural sector, the degrees of priority accorded to the different sub-sectors will be reflected in the size of their budgetary allocations, as well as the range of programmes and projects to be undertaken in each sub-sector. Some of the typical sub-sectors of agriculture include crops, livestock, fisheries, rural development, research, extension, etc. The budgetary allocations to each of these sub-sectors reveal government‘s priority preference for their respective programmes in the fiscal year. In reading the budget, it should be realized that agricultural production could be serviced or facilitated by the agencies in other departments of government.
The sub-sectoral distribution of programmes and projects in the annual budget serves to indicate the underlying strategy for the sector. For instance, governments may prefer
48 directly productive activities in the sector by encouraging programme interventions intended to achieve this objective. Such programme may include: farm settlement schemes, school-to-land projects, input delivery progammme, national livestock transformation programme, etc.
This type of policy strategy by the government will be reflected in the budget by the programmes. In Nigeria, these may include for instance land resources development (e.g. the defunct National Agricultural Land Development Authority (NALDA), River Basin Development, Fadama development, and the community and cooperative operative mobilization schemes.
The budget is also a major instrument for regulating inflation. For example, if inflationary pressures are too strong, a restrictive budget will be introduced. This implies that taxes will be raised and/or government expenditure reduced. This contractionary fiscal policy, as it is often called, helps to check inflationary pressures in the economy.
It should be realized that a government budget is a legislation. When approved, it becomes an act of parliament to be enforced by the relevant authority. Thus, a budget is one of the legal instrument for realizing the agricultural policy objectives of a country.
9. Legislation: Legislation is one of the instruments for realizing the objectives of agricultural policy. Legislation provides the institutional framework for the achievement of stated objectives. Special laws, rules, and regulation may be required to control behaviour, direct outcomes, mobilize resources, procure inputs, create incentives, regulate behaviour, or to direct the activities of economic agents to desirable ends. For instance, special laws may be promulgated to discourage smuggling or restrict imports so as to realize the import substitution policy of government. In particular, the ban by the Federal Government of Nigeria on the importation of rice and frozen chicken are intended to encourage the growth of the domestic rice and poultry sub-sectors of agriculture. Certain agricultural projects and progarmmes may require an enabling legislation for their implementation. The enabling legislation is intended to accord such projects a separate legal identity for the channeling of benefits and use of resources, as well as to insulate their operations from the general bureaucracy. Legislation and the associated quarantine services may be promulgated to control the spread of debilitating diseases and pests of crops and livestock.
Land reforms: This is an example also of legislation. Agricultural policy goals can also be achieved through bringing various acts, rules and regulations. Land Reform Act was enacted for making reform in the land tenure system and for equitable distribution of land. The act was intended to achieve economic, social and political objectives. For example, political objective was to change the rural power structure. The economic objectives were to reduce poverty and increase agricultural productivity. Policy makers should clearly weigh the benefits and costs of legislation along with alternative instruments, before proceeding to promulgate one.
10. Infrastructure services: Governments investments in irrigation, land improvement,