Agriculture is a powerful driver of economic growth and poverty reduction. It provides millions of employment opportunities, and has the potential to create many more across the value chain. A robust agricultural system provides adequate nutrition that improves health, enhances productivity, and supports long-term economic development. Beyond its economic role, agriculture contributes significantly to environmental sustainability.
Nigeria’s agricultural development has evolved through various policy phases. In the early post-independence era, agriculture played a central role in the economy with minimal government support. Yet, it managed to feed a growing population, supply raw materials for industry, generate revenue, and offer employment opportunities. During this period, government support focused primarily on export crops such as cocoa, groundnut, palm produce, rubber, and cotton. Regional specialisation flourished, with cocoa in the west, oil palm in the east, and groundnut in the north.
However, from the 1960s onwards, the sector faced growing difficulties, exacerbated by the oil boom. In response, government subsidies and agricultural policies were introduced under national development plans (1970–1974, 1975–1980, 1981–1985). These initiatives aimed to restore productivity and reduce dependence on food imports. Despite mixed results from these government subsidies, these experiences highlighted the need for well-structured policies to drive sustainable agricultural growth.
Some of these key government subsidies include:
The Agricultural Development Programme (ADP) was initiated by the World Bank support in1975–1976. ADP aimed to boost food production and rural incomes through input distribution, extension services (using the Training and Visit system), on-farm research, feeder roads, and water infrastructure.
Today, ADPs remain active in every state, integrated into state ministries and involved in youth training, biofortification, and rural infrastructure initiatives.
Despite being weakened by poor funding, limited personnel, and bureaucratic challenges, programmes like Edo State’s 2024 youth empowerment and resilience training show continued relevance at the local level.
Fertiliser subsidies began in the 1970s but have been marred by inconsistent implementation and inefficiencies. These government subsidies often benefited intermediaries instead of farmers.
Between 1990 and 1996, fertiliser subsidies consumed more resources than capital expenditure on agriculture. Volatile market prices further limited farmer access to inputs, necessitating programme reforms.
In 2013, the government offered up to an 85% discount on fertilisers, contributing to a rise in Agricultural GDP from ₦16.8 trillion in 2013 to ₦18 trillion in 2014. However, these outcomes were not sustained due to weak implementation frameworks and limited farmer engagement beyond subsidy access.
Fertiliser support has shifted from inefficient subsidies to market-driven, subsidy-smart models. The PFI continues to operate effectively, prioritising local blending, cost reduction, and farmer access, though macroeconomic and implementation challenges still need resolution.
The Growth Enhancement Support Scheme (GESS) introduced “smart subsidies” for smallholder farmers, using an electronic platform to deliver fertilisers, improved seeds, and agrochemicals. With a registry of 10.5 million farmers, the program reached over 14 million farmers between 2012 and 2014, producing 1.8 million tons of fertiliser and 174,000 metric tons of improved seeds, which contributed to the production of an estimated 20.1 million metric tons of food.
Despite these achievements, GESS struggled with sustainability. Recession and public debt limited funding capacity, and as of July 2021, a planned ₦12.3 billion subsidy for 2.2 million farmers had not been disbursed. Additionally, the government remains indebted to past input suppliers, jeopardising future government subsidies.
Nigeria moved from ad-hoc subsidies (1970s–GESS era) to the structured PFI. Initiated in 2016, PFI aimed to boost domestic fertiliser blending and ensure an affordable fertiliser supply by resuscitating local blending plants in partnership with the Morocco-based OCP.
Over 30 blending plants were revived, and fertiliser prices fell from ₦11,000 per 50kg bag to about ₦5,500 in 2017. Unfortunately, distribution bottlenecks and middlemen’s interference have led to unequal access, especially for smallholder farmers.
The PFI is ongoing and supplemented by the 2025 Renewed Hope initiative focused on accessibility through subsidised support.
Established in 1978, the Agricultural Credit Guarantee Scheme Fund (ACGSF) aimed to increase access to agricultural credit. The fund is jointly financed by the Federal Government (60%) and the Central Bank of Nigeria (40%) and has a share capital of ₦50 billion.
It guarantees 75% of loans in default, reducing the risk of agricultural lending. However, commercial banks remain reluctant to lend to farmers due to high transaction costs and the small size of loans.
Although ACGSF was designed to stimulate bank lending, limited disbursement to livestock farmers has led to supply shortfalls and high prices in that sub-sector. ACGSF-supported projects include plantation development, crop cultivation, animal husbandry, processing, and machinery services.
From 1981 to 2014, the ACGSF was one of the government subsidy schemes that contributed to improved credit access, but its impact on livestock production remains modest. The ACGSF is still operational today and guarantees up to 75% of agricultural loans to boost farmer access to credit. The CBN currently manages this programme.
The Commercial Agricultural Credit Scheme (CACS) was introduced in 2009. It aimed to accelerate commercial agriculture by offering loans at single-digit interest rates.
The scheme, a sub-component of the Commercial Agriculture Development Programme (CADP), sought to increase food production, improve food security, generate employment, diversify the economy, and supply raw materials to industries.
By addressing the persistent credit gap in Nigeria’s agricultural value chain, CACS supported production, processing, storage, and marketing. With agriculture employing over 70% of Nigeria’s population, implementing CACS effectively is vital for poverty reduction, inflation control, and overall economic diversification.
The CBN extended the scheme’s deadline to September 30, 2025, allowing existing loans to remain valid through their maturities.
As government subsidies continued to increase with little positive impact, another was introduced. NAFPP was aimed at increasing credit access and improving seed availability.
However, it was hampered by poor extension services, limited machinery production, and credit repayment issues. The lack of technology adoption also restricted its success.
As of today, NAFPP is defunct. Its legacy continues through Operation Feed the Nation (OFN) (1976–1980) and the Agricultural Development Programme (ADP) (from 1975 onwards).
OFN, in 1976, aimed to achieve food self-sufficiency by encouraging domestic farming and reducing imports. Though it raised awareness and marginally increased food output, its impact was limited by implementation flaws and lack of continuity.
Government subsidies have played a pivotal role in shaping Nigeria’s agricultural landscape. While some programmes like GESS and CACS achieved notable successes, mismanagement, elite capture, funding instability, and poor monitoring have limited their impact.
OFN operated until the early 1980s, after which it was discontinued and effectively replaced by newer initiatives like the Agricultural Development Programme (ADP), which began in 1975 and absorbed many of OFN’s functions.
RBDAs were set up for water resource management, irrigation, and rural development. While they contributed to improved agricultural yields and food security, they faced challenges such as inadequate funding, corruption, poor infrastructure, and lack of coordinated planning.
Their impact on large-scale transformation has been marginal due to these constraints. RBDAs still function nationwide, delivering core services via interim leadership. Institutional formalities and board appointments are being finalised, with improvements expected after appointees receive official sanction.
Launched in 2015 by the Central Bank of Nigeria, ABP provided loans and inputs to smallholder farmers through a linkage with processing companies (anchors). The goal was to increase the production of staple crops like rice, maize, and wheat.
By 2021, ABP had disbursed over ₦631 billion to over 3.1 million smallholder farmers across 21 crops. It contributed to a temporary increase in rice production and reduced rice imports.
Despite initial gains, the programme faced loan repayment defaults, politicised beneficiary selection, and limited private sector participation. Food prices continued to rise due to inflation, insecurity, and logistics constraints.
ABP is currently suspended in Nigeria because of the non-repayment of the loan. As of March 2024, ₦450 billion remained unpaid . Currently, the focus is on recouping defaulted funds, not expanding farmer support.
The Buhari government closed land borders to curb food smuggling and protect local farmers for over a year. Rice smuggling was temporarily reduced, and domestic rice milling increased. Yet, food prices surged due to supply gaps. This policy also hurts neighbouring countries and businesses dependent on cross-border trade.
By April 2022, the Nigeria Customs Service had reopened additional major crossings; however, the 56 other land border points remain under strategic control, not fully open.
The Buhari-led government left much to be desired for the next government. Amidst a fragile food system marked by rising inflation, insecurity, and declining public trust in subsidy programmes, the new government led by Bola Ahmed Tinubu has taken some steps.
Still, many policies remain in the early stages. Some of them include:
In July 2023, Tinubu declared a state of emergency on food security, aiming to integrate food and water availability into national security planning.
Key features of this included
The administration hopes to reduce food inflation, create jobs, and expand access to affordable food. However, as of mid-2025, the programme is still unfolding, and detailed data on implementation and outcomes remains limited.
The Emergency Agriculture and Food Security Plan is still operational. Major components like the dry-season farming push, duty-free imports, and state-driven interventions remain in execution; however, persistent inflation, security risks, and implementation delays limit their effectiveness.
Although not specific to agriculture, the removal of fuel subsidies on May 29 2023, significantly affected farming. It raised food, fertiliser, and machinery transportation costs, indirectly worsening food prices. The government pledged palliatives, including conditional cash transfers and food supply interventions, but these have had mixed success in cushioning inflationary impacts.
Future policies for agricultural subsidies in Nigeria must focus on transparency, accountability, and long-term sustainability to meaningfully contribute to food security, job creation, and economic growth.
Strengthening credit schemes, improving infrastructure, and investing in technology will be essential to unlocking Nigerian agriculture’s full potential.
