Determinants of federal government expenditure policy on agriculture in Nigeria

Abstract

The study assessed the determinants of federal government agricultural expenditure policies and the implications of these policies from 1960–2007. The study covered the Nigerian Nation and used federal level time series data to achieve the set down objectives. The analytical method consisted of descriptive analysis, stationarity test, granger model, co-integration and error correction model (ecm) to verify the characteristics of the data, ascertain the existence of causality/determinants of agricultural expenditure, in addition to long run relationships. The causality tests indicated that the real government agricultural expenditure in Nigeria had been largely determined by the level of public financial resources in the country, while the ecm revealed that there was no long run neutrality of change between agricultural expenditures and the tested determinants. The study recommended the need for the Federal Government to channel resources into investments which require few public resources and has demonstrated potentials for transforming the rural economy through increased incomes for small farmers and rapid diffusion of new technologies