AN EVALUATION OF THE EFFECTIVENESS OF GOVERNMENT SUBSIDIES ON SMALLHOLDER FARMERS: A CASE STUDY OF GOMBE STATE

AN EVALUATION OF THE EFFECTIVENESS OF GOVERNMENT SUBSIDIES ON SMALLHOLDER FARMERS: A CASE STUDY OF GOMBE STATE

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

Agriculture constitutes a vital component of Nigeria’s economic and social fabric, contributing significantly to employment generation, rural livelihoods, and food security. Among the key actors in this sector are smallholder farmers, who constitute over 80 percent of Nigeria’s farming population and are responsible for a substantial portion of domestic food production (Food and Agriculture Organization [FAO], 2020). These farmers, however, often grapple with limited access to essential resources such as quality inputs, credit facilities, irrigation infrastructure, and extension services, which collectively hinder their productivity and income levels.

In response to these persistent challenges, successive Nigerian governments have introduced subsidy programs aimed at reducing input costs, improving farm productivity, and enhancing the overall welfare of smallholder farmers. Government subsidies, particularly in the form of fertilizers, seeds, pesticides, and mechanized services, are intended to serve as strategic interventions to address systemic constraints in the agricultural value chain. Notable among these efforts is the Growth Enhancement Support Scheme (GESS), launched in 2011 under the Agricultural Transformation Agenda, which aimed to deliver subsidized inputs directly to farmers through an electronic wallet system (Federal Ministry of Agriculture and Rural Development [FMARD], 2014).

In states like Gombe, located in Nigeria’s northeastern region, the relevance of such subsidies is even more pronounced due to high levels of rural poverty, limited private sector participation in agriculture, and increasing vulnerability to climatic and socio-political disturbances. The region’s agricultural activities are largely rain-fed and seasonal, which further necessitates external support to enhance productivity. Government subsidies are thus positioned as a critical tool for empowering smallholder farmers and reducing rural food insecurity.

Despite the intentions behind these programs, their effectiveness has been widely debated. Several studies and policy reviews have pointed to issues such as poor targeting of beneficiaries, corruption, late delivery of inputs, and lack of transparency in subsidy administration (Akinola & Adesina, 2021; Okon & Ohen, 2022). There is also the question of whether subsidies have translated into measurable improvements in farm output, income, and sustainability for smallholder farmers, especially in marginalized states like Gombe.

Understanding the real impact of government subsidies on smallholder farmers is essential for informing agricultural policy and ensuring that limited public resources are deployed effectively. This study therefore seeks to evaluate the effectiveness of government subsidy programs in Gombe State, focusing on how well these initiatives have addressed the needs of smallholder farmers and contributed to their agricultural outcomes.

1.2 Statement of the Problem

The Nigerian government has, over the years, implemented various agricultural subsidy programs with the objective of boosting food production and improving the livelihoods of smallholder farmers. In Gombe State, these interventions have been particularly crucial given the region's socio-economic vulnerabilities and dependence on agriculture for livelihood. However, the continued underperformance of smallholder agriculture raises critical questions about the actual effectiveness of such subsidies.

Reports from independent evaluations and farmers’ feedback suggest that many subsidy programs have fallen short of their objectives. Common complaints include non-delivery or late delivery of subsidized inputs, the politicization of beneficiary selection, and inadequate coverage of genuinely needy farmers (Ogunleye, 2020). Moreover, structural inefficiencies such as poor distribution networks, lack of monitoring mechanisms, and inadequate farmer education on the use of improved inputs have further undermined the efficacy of these programs.

While some studies have analyzed the design and implementation of national subsidy programs, few have undertaken a focused evaluation within the context of Gombe State. This gap in localized empirical research makes it difficult to assess whether the intended beneficiaries—namely, smallholder farmers—are truly reaping the benefits of these subsidies in terms of productivity, income, and sustainability. In the absence of robust evidence, policymakers and stakeholders are left with limited insight into how these interventions can be improved or redesigned to meet regional realities.

Furthermore, the misalignment between policy design and ground-level implementation has led to a trust deficit between farmers and the government. This can reduce program uptake and limit the overall impact of future interventions. Thus, the central problem addressed by this study is the lack of empirical evidence on the actual outcomes of government subsidy programs for smallholder farmers in Gombe State, particularly in terms of input access, productivity enhancement, and income generation.

1.3 Objectives of the Study

To evaluate the effectiveness of government subsidy programs on the productivity of smallholder farmers in Gombe State.

To assess the challenges faced by smallholder farmers in accessing and utilizing government-subsidized agricultural inputs.

To determine the perceived impact of subsidies on the income and livelihood of smallholder farmers in the study area.

 

1.4 Research Questions

How effective are government subsidy programs in enhancing the productivity of smallholder farmers in Gombe State?

What challenges do smallholder farmers face in accessing and utilizing government-subsidized agricultural inputs?

How do smallholder farmers perceive the impact of subsidies on their income and livelihood?

1.5 Research Hypotheses

H0₁: Government subsidies have no significant effect on the productivity of smallholder farmers in Gombe State.

H0₂: There is no significant relationship between access to government subsidies and the income levels of smallholder farmers in Gombe State.

1.6 Significance of the Study

This study is significant for several reasons. Firstly, it offers a localized evaluation of agricultural subsidy programs, providing empirical insights that can inform the design and implementation of more effective policies in Gombe State and similar contexts. Secondly, the findings will benefit government agencies, donor organizations, and development partners seeking to support agricultural growth through targeted interventions. Thirdly, smallholder farmers stand to gain from improved understanding of how subsidy programs can be better aligned with their needs and realities. Finally, the study contributes to the academic literature on agricultural development, rural policy, and public sector performance evaluation in Nigeria.

1.7 Scope and Limitation of the Study

This study is limited to the evaluation of government subsidy programs targeting smallholder farmers in Gombe State. It will focus on key indicators such as input access, productivity levels, and perceived changes in income. The study will not cover large-scale commercial farming or subsidy programs implemented outside the agricultural sector. Limitations may include incomplete records, farmer recall bias during interviews, and variations in program implementation across different local government areas.

1.8 Operational Definition of Terms

Smallholder Farmers: Farmers operating on a small scale, often with less than five hectares of land, primarily relying on family labor.

Government Subsidies: Financial or material support provided by the government to reduce the cost of agricultural inputs such as seeds, fertilizers, and equipment.

Effectiveness: The extent to which the objectives of a policy or program are achieved, in this case, improvements in productivity, input access, and income.

Productivity: The amount of agricultural output (e.g., yield per hectare) achieved relative to inputs used.

1.9 Structure of the Study

This dissertation is organized into five chapters. Chapter One introduces the study by presenting the background, problem statement, objectives, research questions, hypotheses, significance, scope, and definitions. Chapter Two provides a detailed literature review on agricultural subsidies and smallholder farming. Chapter Three outlines the research design and methodology. Chapter Four presents and discusses the results. Chapter Five concludes the study and offers recommendations for policy and future research.

References

Akinola, A. O., & Adesina, K. O. (2021). Public policy and agricultural subsidies in Nigeria: Implications for smallholder farmers. African Journal of Public Administration and Development, 13(1), 45–59.

Federal Ministry of Agriculture and Rural Development (FMARD). (2014). GESS Implementation Report. Abuja: FMARD.

Food and Agriculture Organization (FAO). (2020). Nigeria Agriculture Sector Review. Retrieved from https://www.fao.org

Okon, U. E., & Ohen, S. B. (2022). Challenges and prospects of agricultural subsidy programs in Nigeria. Nigerian Journal of Agricultural Economics, 8(2), 88–102.

Ogunleye, A. O. (2020). Evaluating the impact of fertilizer subsidies on agricultural productivity in Nigeria. Journal of Development Policy and Practice, 5(3), 203–220.