ABSTRACT
Over the years, Agriculture has proved to be the strongest means of livelihood all over the world. The produce from agriculture has been immense and the growth has been steadily upward in the developed countries. Developed countries has given adept attention to agriculture as the population of its citizens ride on geometric progression. In Nigeria, we have witnessed an upward and downward syndrome in the movement of Agricultural production. One major way to boost this movement and increase significant production is through the government expenditure. Government expenditure in this case are the resources (financial and material) that is injected into the Agricultural sector. This study was therefore undertaken to examine the probably the relationship that exists between government expenditure and agricultural production in Nigeria. Is the level of Agricultural production in the country dependent on the pace of government expenditure? To find out this, the study adopted the Ordinary Least Square method to run this regression with data from 2010-2017. The study found out there is a positive relationship between both variables, as the level of Agricultural production is to a great extent dependent on the amount of resources injected into the sector.
TABLE OF CONTENT
CHAPTER ONE: INTRODUCTION
1.1 Background of the study
1.2 Problem statement
1.3 Purpose of the study
1.4 Significance of the study
1.5 Study hypotheses
1.6 Scope and Limitations of the Study
1.7 Organization of Study
CHAPTER TWO:
REVIEW OF RELATED AND RELEVANT LITERATURE
2.1 Introduction
2.2 Conceptual Review
2.3 Theoretical Framework
2.4 Empirical Studies
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Research Design
3.2 Sources of Data
3.3 Population and Sample Size
3.4 Model specification
3.5 Unit Root test
3.6 Cointegration Test
3.7 Apriori expectation
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Introduction
4.2 Data Presentation
4.3 F – test
4.3 Unit Root Test
4.4 Co-Integration Test
CHAPTER FIVE: CONCLUSION, SUMMARY, RECOMMENDATION
5.1 Introduction
5.2 Conclusion and Findings
5.3 Summary of the Study
5.4 Recommendation
Bibliography
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Agriculture as a sector is an instrumental factor for the development of the economy, as it sustains the livelihood of about 75 percent of the population, and according to World Bank estimates, increased at an annual rate of 2.9 percent in 1990-98 (Opportunities in Nigeria’s Agricultural Sector, 2005). The importance of the agricultural sector in any developing economy is generally well known. This is because it is expected to satisfy the bulk, if not the entire food requirement of the country, supply most of the agricultural raw materials needed by the manufacturing sector, provide adequate employment and income to farmers as well as earn substantial foreign exchange, for the execution of capital projects for developmental purposes. Over the years, inadequacy of agricultural infrastructure has hindered progress in agricultural development. While the use of such devices such as modern diggers, ploughs (instead of hand hoes), and non-harmful chemicals for containment of weed, fertilizers, etc. are unaffordable by most of the smallscale farmers. The importance of the agricultural sector in any developing economy is generally well known. This is because it is expected to satisfy the bulk, if not the entire food requirement of the country, supply most of the agricultural raw materials needed by the manufacturing sector, provide adequate employment and income to farmers as well as earn substantial foreign exchange, for the execution of capital projects for developmental purposes.
As such, government expenditure, which is a public sector investment, in agriculture is crucial for the transformation of the sector and realization of development policy objectives. Therefore public expenditure can be described to mean the cost or expenses the government incurs for its own maintenance and for the society, with expanding state activities. Therefore, government expenditure on agriculture especially in the area of development of infrastructure, such as irrigation, input distribution, construction of feeder roads, research and extension, are important. These investments have been left to the government, not just because of limited number of private investor willing to take part in the investment in the sector but due to the strong believer of the government that the availability of such infrastructure and improved technology will contribute immensely to the realization of the expected gains in productivity and output growth in the sector. Despite these, the performance of the sector has generally been considered unsatisfactory especially following the 1971-73 droughts and 1975 Rosette virus epidemic (Ukpong, 1993). The expected significant contribution was made towards the attainment of several national economic and social goals. The resultant effect is the huge importation of food, made possible by the enhanced crude oil export earnings, but which served as a disincentive to serious domestic farming. In line with the anticipated contribution agriculture makes to the overall development of the Nigerian economy, several measures were designed in the years preceding the Structural Adjustment Programme (SAP) to stimulate the growth and development of the sector.
Such measures included subsidized/low interest rate policies of the 1970s and early 1980’s, establishment of specialized institutions to lend solely to the sector, funding agricultural production directly through budgetary allocation and by 3 establishing agricultural oriented institutions and progammes such as Nigerian Agricultural Credit Bank (NACB), Agricultural Credit Guarantee Scheme Fund (ACGSF), Agricultural Development Programmes (ADPS), River Basin Development Scheme (RBDS) and Operation Feed the Nation(OFN). Following the adoption of SAP in 1986, Commodity Boards were abolished in order to provide productive incentives to the farmers through increased producer prices. Also, in the period 1970-82 annual production of major export crops such as cocoa, rubber, cotton and groundnuts fell by 43, 29, 65, and 64 percent respectively (Olomola, 1998). While, the average growth rate is the value of agricultural exports increased astronomically in 1986 to 1990 sub-period by 70.5 percent due to initial impact of SAP. It remained a little lower but still high in the 1991/95 sub-periods by 68.5 percent, again due to the effect of SAP but became relatively low in the 1996/2000 at 18.2 percent as the effect of SAP wore off (Manyong, 2003). Despite decade of public sector contribution to agriculture, there were evidences of unstable or fluctuating trends. In this research, efforts has been made to find out what is responsible for the downward trend in the contribution of agriculture to food supply, Gross Domestic Product (GDP), foreign exchange earnings and raw materials. Also, why there has been mixed result from the financing policies and programmes of government for agriculture in Nigeria.
GOVERNMENT EXPENDITURE AND AGRICULTURAL PRODUCTION IN NIGERIA 2010-2017
GOVERNMENT EXPENDITURE AND AGRICULTURAL PRODUCTION IN NIGERIA 2010-2017
