GOVERNMENT EXPENDITURE ON AGRICULTURAL OUTPUT: A PANACEA FOR ECONOMIC RECESSION.
Resumo
The contribution of agricultural sector to the economy cannot be overemphasized when considering its building roles for sustainable development, in terms of employment potentials, export and financial impacts on the economy. The main objective of this paper empirically investigates government expenditure on agricultural output. The study used the error correction mechanism in its methodology. Government expenditure on agriculture has a direct impact on the total agricultural output. These relationships appear to be insignificant as shown from their pro-value. Hence, this indicates the fact that government expenditure has not significantly influenced agricultural output in Nigeria. However, our result shows that government expenditure has a positive impact on agriculture, but the fraction of government expenditure directed to agriculture is less than what the agricultural sector requires, the influence of the expenditure on the sector is therefore insignificant. Credit from financial institutions to the agricultural sector has an inverse relationship with the total agricultural output. The pro- value of the coefficient of credit was statistically significant. The implication is that credit from financial institutions to the agricultural sector is channeled for other purpose or to other sectors. Price of agricultural product had a negative impact on total agricultural output. This means that increase in the price of agricultural output will reduce total agricultural output. This is against the a priori expectation of the study and it is not statistically significant. The study recommends government spending to the agricultural sector
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