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.