Globalization, International
Trade and the Challenge of
Agriculture and Food
Security: A Nigeria Case
Study
BY
DR A.A. ADUBI
HEAD OF TRAINING (Sectoral)
NCEMA
Ibadan
1
INTRODUCTION
• Importance of Agriculture: Income,
employment
(>65%),
food,
raw
materials, linkages appropriate for
exchange
• Trade
is
therefore
critical
to
development of the sector WTO –
intends to create a world where trade
flows will be less restricted
• Uruguay Article 20 AoA.
Intends to reform trade and make
policies more market-oriented
2
• New Rules of WTO apply to
Market
Access,
Domestic
Support and Export Subsidies
• Trade liberalization offers risks
and
opportunities
for
Agriculture.
But no country
can
operate
in
autarky.
Products must be exported and
technology imported
• Globalization refers to increased
economic
integration
between
countries
through
the
flow
of
information,
goods,
services,
technologies and people
• Will Africa be able to cope? Competitive
Domestic Agriculture?
Integrated
international
supply
chains
Institutional deficiencies
Production response rate
Technology
Concept of Globalization
• Globalization is multidimensional and not
only “Global free market” It has cultural,
environmental, economic, political, legal and
technological dimensions
• Globalization is the integration of economies
and societies through the flow among
countries, of information, ideas, activities,
technologies, goods and services, capital and
people.
• UNCTAD - 3 layers – Expansion of
International trade, Financial Integration, then
Globalization which places IT and technology
at the forefront of competition.
Factors that assisted spread of Globalization
• Growth of the global financial
markets
• Collapse of the former Soviet
Union and the end of cold war.
War has shifted from “geo-politics”
to “geo-economics”
• Growth of Corporate activities or
multinational Corporation (MNC)
Factors that assisted spread of Globalization
• The
revolution
of
information,
Communication and transportation
technology, which makes business and
financial transactions easy to conduct
at a distance.
• The
international
environmental
problems of global warming and acid
rain cut across countries, requiring
global solutions and cooperation.
Consequences
• Internal opening of the economy –
political and economic decentralization.
Privatization is encouraged with market
forces given prominence
• External opening of the economy –
there is general liberalization and
deregulation.
- call for reduction in tariffs and
import taxes
- formation of regional unions and
multinational.
• Effects on the economy – opinions are
divided.
Table 1: Gross Domestic Product At 1984 Factor Coast
(Naira Billion)
Activity Sector
1998
1999
2000
2001
2002
1. Agriculture
(a) Crop Production
(b) Live stock
(c) Forestry
(d) Fishing
45.25
36.10
5.89
1.38
1.88
47.60
37.99
6.06
1.40
2.15
48.99
39.13
6.20
1.42
2.24
50.85
40.61
6.38
1.45
2.41
53.53
42.73
6.64
1.48
2.68
2.
20.53
13.48
0.36
6.69
19.77
12.47
0.37
6.93
21.44
13.87
0.39
7.18
22.49
14.59
0.42
7.48
20.89
12.60
0.48
7.81
3. Building & Construction
4. Wholesale & Retail Trade
5. Services
2.36
13.29
31.52
2.46
13.62
32.69
2.55
13.84
33.82
2.86
14.18
35.34
3.35
14.68
37.38
TOTAL (GDP)
NON-OIL (GDP)
GDP Growth Rate (%)
Agriculture as % of Total Non-Oil GDP
112.95
99.47
2.30
42
116.14
103.67
2.82
45.91
120.64
106.77
3.87
45.88
125.72
111.13
4.21
45.76
129.83
117.23
3.27
45.67
Industry
(a) Crude Petroleum
(b) Mining & Quarrying
(c) Manufacturing
Source: CBN Annual Report and Statement of Account, 2002
Table 2:
Visible Trade (Naira Million)
Item
1998
1999
2000
2001
2002
Import
837,418.90
862,515.65
962,963.92
1,347,466.24
1,249,380.73
Oil sector
Non-Oil sector
175,854.20
661,564.70
211,661.75
650,853.90
198,735.92
764,228.00
215,474.64
1,131,991.60
239.071.13
1,010,309.60
1,188,969.84
1,945,723.31
2,001,230.79
1,874,874.21
1,169,476.87
19,492.97
1,920,900.38
24,822.93
1,973,222.22
28,008.57
1,780,221.56
94,652.65
2,051,485.49
2,908,687.23
3,348,697.03
3,124,254.94
1,381,138.62
670,346.87
2,119,636.30
789,050.93
2,188,696.86
1,160,000.17
2,019,292.69
1,104,962.25
Export
751,856.70
Oil sector
Non-Oil sector
Total Trade
Oil sector
Non-Oil sector
717,786.50
34,070.20
1,589,275.60
893,640.70
695,634.90
Source: CBN Annual Report and Statement of Account, 2002
Table 3: Imports By Major Groups
(Naira Million)
Import Group
1998
1999
2000
2001
2002
Consumer Goods
326,323.4
344,965.9
373,632.3
522,816.9
489,757.3
Durable
Non Durable
25,690.0
300,633.4
31,046.9
313,919.0
30,815.0
342,817.3
43,118.9
479,698.0
36,232.0
453,525.2
Capital Goods And Raw
Materials
508,313.3
515,724.0
586,448.9
820,606.9
754,626.0
Capital Goods
Raw Materials
Miscellaneous
166,646.4
341,666.9
2,512.2
198,355.4
317,368.6
1,825.8
203,186.7
383,262.2
2,882.7
284,315.4
536,291.6
4,042.4
262,370.0
492,256.0
4,997.5
TOTAL
837,148.9
862,515.7
962,963.9
1,347,466.2
CBN Annual Report and Statement of Account, 2002
1,249,380.7
Table 4: Structure of Nigeria’s import and exports, 1980-96
Exports
Share (percent)
Food
Agricultural
raw
material
Mining
Manufactures
Value ($ billion)
Total
Food
Imports
1980
1985
1990
1995
1996
1980
1985
1990
1995
1996
2.2
0.2
1.7
0.3
1.7
1.1
2.7
2.4
2.5
1.8
15.1
0.4
15.1
1.2
8.3
0.8
11.0
0.9
12.7
0.4
95.6
1.8
96.0
1.9
92.9
4.2
86.8
8.0
92.0
3.7
1.7
82.6
1.7
80.2
1.5
88.5
1.0
85.5
0.7
85.2
26.1
0.57
15.6
0.27
13.5
0.23
12.7
0.34
15.5
0.39
14.3
2.16
6.19
0.93
5.18
0.43
4.82
0.53
5.20
0.66
Source: Computed from WTO (1998).
Globalization Concerns
• Competitiveness of the domestic
agricultural production
• Integrated international supply chains
• Decommodification through G.M.
• Weak Institutions
• Safe food culture
• Displacement of the small farmers
Other Concerns
• Heavy use of pesticides may kill the
pollinators – the bees and butterflies and
therefore less fruits will be produced.
• Native seeds will be displaced by new
hybrids which cannot be saved and need to
be purchased every year at high cost. The
new hybrids are also vulnerable to pest
attacks.
•The introduction of genetically engineered
seed is costly and will increase ecological
risks.
•It is women and small farmers working
with biodiversity who are the primary food
producers.
•The call for removal
imports will adversely
production in Nigeria
domestic
products
effectively.
of restriction on
affect agricultural
negatively as the
cannot
compete
• Capital-intensive, corporately controlled
agriculture will soon spread into regions
where peasants are poor but until now have
been self sufficient in food production. In
those regions where industrial agriculture
has been introduced through globalization,
higher costs
will make it virtually
impossible for small farmers to survive.
• The globalization of the food system is likely
to destroy the diversity of local food
cultures and local food economies. A global
monoculture may even be forced on people
(consumers) by defining everything that is
fresh, local and handmade as a health
hazard.
• World Trade Organization (WTO)
established in 1994 has expanded authority
to cover Trade related Intellectual Property
Rights (TRIPs). This has been interpreted
to include the genetic code of living
organisms.
Conclusion
Conclusion
• Globalization must be viewed as a positive
force for development especially with the
wave of information and communication
technology. There is need to promote
learning from other country’s experience
especially those having similar production
features as Nigeria.
This will allow
immediate and faster adoption of positive
developmental outcomes.
19
• Government policies should concentrate
on
exploring
ways of reducing
transaction cost in rural areas especially
through encouraging community based
organizations that will offer collective
action and access to information, finance,
insurance,
research
and
other
opportunities for the farmers
•There is no government in the world that
does not offer subsidies to its agriculture
in one form or the other. The peculiarity
of Nigerian agriculture demands that
subsidy support directed towards market
failure affecting small holder agriculture
will be effective in uplifting the status of
small farmers production.
•The involvement of public sector in
research should be continuous but such
research efforts should be community
(farmers) driven.
•The trade related intellectual property rights
(TRIPs) agreement of WTO as it relates to
plant varieties must be modified with plant
breeders right which accommodates farmers
and researchers rights as well as protect
traditional knowledge about seeds, plants and
animals.
•The country should be careful in accepting
food aid when it is offered. Often food aid is
increased when prices of agricultural food
products are low and reduced when prices are
high. This may be a policy of dumping
surpluses.
Conclusion
 Sustainability demands that we move out of
the economic trap that is leaving no space
for other species and other
people.Economic globalization has become
a war against nature and the poor.But the
rules of globalization are not God given.They can be changed.They must be
changed to reflect consideration of people’s
livelihood,sustainable use of resources and
the right of people to have security.