In terms of employment, agriculture is by far the most important sector of Nigeria's economy, engaging about 70% of the labor force. Agricultural holdings are generally small and scattered; farming is often of the subsistence variety, characterized by simple tools and shifting cultivation. These small farms produce about 80% of the total food. About 30.7 million hectares (76 million acres), or 33% of Nigeria's land area, are under cultivation. Nigeria's diverse climate, from the tropical areas of the coast to the arid zone of the north, make it possible to produce virtually all agricultural products that can be grown in the tropical and semitropical areas of the world. The economic benefits of large-scale agriculture are recognized, and the government favors the formation of cooperative societies and settlements to encourage industrial agriculture. Large-scale agriculture, however, is not common. Despite an abundant water supply, a favorable climate, and wide areas of arable land, productivity is restricted owing to low soil fertility in many areas and inefficient methods of cultivation. Agriculture contributed 32% to GDP in 2001.
The agricultural products of Nigeria can be divided into two main groups: food crops, produced for home consumption, and export products. Prior to the civil war, the country was self-sufficient in food, but imports of food increased substantially after 1973. Bread, made primarily from US wheat, replaced domestic crops as the cheapest staple food for much of the urban population. The most important food crops are yams and manioc (cassava) in the south and sorghum (Guinea corn) and millet in the north. In 1999, production of yams was 25.1 million tons (67% of world production); manioc, 33.1 million tons (highest in the world and 20% of global production); cocoyams (taro), 3.3 million tons; and sweet potatoes, 1,560,000 tons. The 1999 production estimates for major crops were as follows (in thousands of tons): sorghum, 8,443; millet, 5,457; corn, 5,777; rice, 3,399; peanuts, 2,783; palm oil, 842; sugar cane, 675; palm kernel, 565; soybeans, 405; and cotton lint, 57. Many fruits and vegetables are also grown by Nigerian farmers.
Although cocoa is the leading non-oil foreign exchange earner, growth in the sector has been slow since the abolition of the Nigerian Cocoa Board. The dominance of smallholders in the cocoa sector and the lack of farm labor due to urbanization holds back production. Nigeria has the potential to produce over 300,000 tons of cocoa beans per year, but production only amounted to 145,000 tons in 1999. Rubber is the second-largest non-oil foreign exchange earner. Despite favorable prices, production has fallen from 155,000 tons in 1991 to 90,000 tons in 1999. Low yield, aging trees, and lack of proper equipment have inhibited production.
Agricultural exports (including manufactured food and agricultural products) decreased in quantity after 1970, partly because of the discouraging effect of low world prices. In 1979, the importing of many foods was banned, including fresh milk, vegetables, roots and tubers, fruits, and poultry. The exporting of milk, sugar, flour, and hides and skins was also banned. During 1985–87, imports of wheat, corn, rice, and vegetable oil were banned as declining income from oil encouraged greater attention to the agricultural sector. In 1986, government marketing boards were closed down, and a free market in all agricultural products was established. In 2001, agricultural exports totaled $323.5 million. Exports of cocoa beans that year totaled $210.4 million; cotton lint, $21 million.