sector (Philip et al., 2009; Ogunlela and Ogungbile, 2006 **)** . Agriculture research has been identified as a vital component of productivity-boosting strategy, and could play a crucial role in devising ways to improve farming practices (and thereby increase farm income), generate employment, reduce food prices and secure food availability (Ogunlela and Ogungbile, 2006).

There have been a variety of initiatives in Nigeria to combat poverty through improved agricultural productivity. However, the results have been mixed. A substantial portion of government investment in agriculture in the past decade focused on reducing rural poverty through efforts to increase productivity, ensure food security, and develop rural communities. There were some successes reported with these programs, but while many were not sustainable, some did not benefit the intended population. There have also been various fertilizer subsidy programs targeted at increasing productivity, but these programs were not very successful either. In many cases they were seen as distorting the input market, while failing to reach the smallholder farmers who were the intended beneficiaries (Phillip et al., 2009; Eboh et al., 2006; Takeshima et al., 2012). The subsidy programs were also very expensive to implement and proved not sustainable for the government (Phillip et al., 2009).

In spite of the many problems encountered by agriculture programs, there have been some successes. One such program is the National Fadama Development program (ADF, 2003; Ayanwale and Alimi, 2004; Ike, 2012). The objective of the program was to increase farmers’ income and contribute to food security and poverty alleviation by developing small-scale irrigation through the extraction of shallow groundwater with low-cost petrol-driven pumps (Adubi, 2012). The programs were designed to reduce the dependence of farmers on unpredictable rainfall patterns, and thus allow farming to be done more consistently throughout the year. Ike (2012) found on average an increase in the real income of beneficiaries from the third phase of Fadama could be attributed to participation in the program.

Increased government expenditure that is well targeted to increase productivity and reduce poverty for households employed in the agricultural sector, could address the persistent weaknesses (Nwafor et al., 2011). As important as it may be to increase agriculture-related expenditure, it is probably more important to properly target funding. Nwafor et al. (2011) examined the cost effectiveness of various public expenditure programs on agriculture in Nigeria as a means of reducing poverty for agricultural households through increased productivity. The authors concluded that, given budget constraints and the numerous demands on government funds, agricultural spending aimed at increasing at the products which provide the highest returns in terms of productivity and poverty reduction. As a result, the Nigerian government has initiated a renewed effort to increase productivity in the agricultural sector through the Agriculture Transformation Agenda (ATA), which is designed to boost the competitiveness of selected highvalue crops including rice, cassava, sorghum and cocoa (FMARD, 2012). The results of this study will prove helpful in identifying the most effective means to improving agricultural productivity in Nigeria. In addition, the results of this study provide a baseline from which to assess effectiveness of the ATA and other subsequent agricultural initiatives.

The analysis in this paper uses data from the first wave of the General Household Survey-Panel (GHS-Panel) conducted in 2010/11 by the Nigeria National Bureau of Statistics (NBS) in collaboration with the World Bank Living Standard Measurement Study - Integrated Surveys on Agriculture (LSMS-ISA). The GHS-Panel survey is modeled after the Living Standard 4