An Investigation of the Long-Run Nexus between Government Agricultural Expenditure and Agricultural Output in Nigeria

This study is focuses on ascertaining the long run nexus that exists between government agricultural spending and agricultural output in Nigeria based on time series observation ranging from 1981 to 2016. The study employs augmented dickey fuller unit root testing with Johansen Maximum Likelihood test for co integration was utilised as data analysis method. The empirical evidence from the study shows that government agricultural capital expenditure exerts a significant positive effect on agricultural output while government recurrent agricultural expenditure reveals an inverse effect. This further implies that government capital spending in the agricultural sector posits more prospects for enhanced agricultural production and commercialisation of the output from agriculture to satisfy the food supply need for the teaming population. The study recommends that there should be priority shift in government spending and intensified effort towards government capital expenditure on agriculture in Nigeria. Hence, government spending for the sector should be channelled to provision of agricultural infrastructure, provision of modern farming equipment such as ultra-modern harvesters, tractors and ploughing machine. Moreover, it has become imperative that strict monitoring, supervision and evaluation be carried out on regular basis to ensure effective utilisation of the agricultural funds provided to assists the rural and peasant farmers who mostly rely on subsistence agricultural for their livelihood.