Effects of Agro-Allied Funding and Agricultural Productivity in Nigeria.
ABSTRACT
This study examined the Effect of Agro-allied Funding and Agricultural Productivity in Nigeria. Three research hypotheses were formulated to guide and direct the study which is: (1)There is a significant relationship between Agro Funding and Agricultural productivity in Nigeria.
(2)There is no long-run relationship between agro-allied funding and agricultural productivity in Nigeria.(3)There is no significant relationship between agricultural credit guarantee scheme fund and agricultural productivity in Nigeria.
Data for the study was collected from the Central Bank of Nigeria Statistical bulletin. In a bid to answer the research questions, the study employed the ordinary least squares technique.
The study found that commercial banks’ credit and government expenditure on the agricultural sector had a positive and insignificant effect on Agricultural Productivity in Nigeria.
However, the study found a positive and significant relationship between agricultural credit guarantee scheme fund and agricultural output. The study recommended that the agricultural credit guarantee scheme fund should be properly funded by the Government in order to induce Agricultural Productivity.
INTRODUCTION
1.1 Background of the study
Agricultural productivity is a measure of the amount of agricultural output produced for a given amount of inputs, such as an index of multiple outputs divided by an index of multiple inputs (e.g. the value of all farm outputs divided by the value of all farm inputs).
Also, Agro-allied funding can also be known as agricultural financing. According to Ugwuanyi (1999), Agricultural financing is the sourcing of funds and making it available for agricultural production and uses.
Agricultural financing Simply means the acquisition and utilization of funds for agricultural purposes.
The role of agriculture in any economy is indeed significant and requires no debate. It is the most dominant sector and indeed a major source of livelihood for its citizens (Ijaiya & Abdulaheem, 2000).
This is because apart from providing food for the teeming population of the economy, it is also a source of raw material that other sectors look out for before their production could take place.
Also, the rearing of animals provides agro-allied products for industrial growth and development, provision of employment opportunities, especially to the rural population;.
Provision of the market for the industrial sector; and provision of the needed linkage between the traditional sector and the modern sector; ensuring food security and thus serving as a catalyst for the growth of the entire economy.
In line with these, Abayomi stated that increasing production in agriculture is regarded as the most vital attendant for achieving industrialization.
Agriculture accounts for about 70 percent of the sectors that generate employment for the working population (Abubi, 2000) In Nigeria, the mainstay of the economy before the 1970s was the agricultural sector.
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