Empirical Analysis of Government Agricultural Spending and Agricultural Output in Nigeria

Abstract

This study examined the relationship between government agricultural spending and agricultural output in Nigeria using annual time series data from 1981 to 2019. This study used descriptive and analytical techniques such as descriptive statistics, Augmented Dickey-Fuller test, VEC Granger Causality/Block Exogeneity Wald test, Johansen co-integration test, vector error correction test, impulse response, and variance decomposition. The study found that all variables were not stationary at level but became stationary at first difference. The study also revealed that there is a positive effect of government agricultural spending on agricultural output in Nigeria, though, significant in the long-run only. The study also showed that there is a bidirectional relationship between government agricultural spending and agricultural output in Nigeria at 10% level of significance and that agricultural output would respond positively to shocks in government agricultural spending in Nigeria during the forecast period. Therefore, the study recommends that government expenditure on agriculture should be improved upon the funds allocated to the sector and should be made available to real farmers through the provision of fertilizers, improved seedlings and grant aiding to farmers through farmers cooperatives while farmers in Nigeria should form farmers’ cooperatives to be able to easily access credit facilities from banks as well as enhancing their easy access to farm inputs provided by the government. More so, the Nigerian government should also increase the budgetary allocation to the agricultural sector to boost food production, alleviate poverty as well as meet up with the international standard.

The Influence of Agricultural Production Mechanization on Grain Production Capacity and Efficiency

“…The research results show that there is a two-way relationship between Nigeria's agricultural expenditure and agricultural output during the forecast period. The establishment of a good agricultural credit system can promote the improvement in agricultural production efficiency and reduce farmers' poverty [21]. Ogundele and Ogundele (2020) studied the relationship between Nigeria's agricultural output and economic growth to determine the contribution of agricultural output to Nigeria's economic growth.…”

Impact of agricultural financing on agricultural output: the role of commercial banks

“…Another perspective is the examined relationship between government agricultural spending and agricultural output in Nigeria using annual time series data from 1981-2019 revealed that there is a positive bidirectional relationship between government agricultural spending on agricultural output in Nigeria, though, significant in the long-run only (Mile , Ijirshar, Asom, Sokpo, & Fefa, 2021). Also, the long-term causation between banking sector development and agricultural productivity in the six Central African Economic and Monetary Community (CEMAC) states from 1990-2018, reveal that bidirectional causality exists between banking sector and agricultural productivity in the CEMAC region (Ngong, Thaddeus, Uchechukwu, & Omwumere, 2020).…”