Author(s) :

ADEKANLE, Olukoya, Oluwakemi Lawanson, Helen Ifeoma Ugwu.

Volume/Issue :

Abstract :

Abstract Purpose: An empirical analysis into the nexus between food production proxied by agriculture output, and government macroeconomic policies which encompasses the following explanatory variables; inflation rate (INFR), interest rate (INTR), exchange Rate (EXCR), credit to agriculture sector (CREAGR), government spending on agriculture sector in Nigeria (GOVEXPAGR) and foreign private investment in agriculture sector in Nigeria. Method: The study adopted the Ordinary Least Square estimation technique to examine the relationship between agriculture food production (i.e agric output), exchange rate, inflation rate, credit to agriculture sector, foreign investment in agriculture sector and government expenditure on agriculture. The hypotheses were verified with the use of T-test and Fisher F-test of significance. Pre-estimation tests such as Unit Root test, Auto-correlation test (Durbin Watson test), Cointegration test, Causality test, Correlation test were carried to ascertain suitability of formulated models for robustness. Similarly, post-estimation tests such as Cumulative Sum of Squares of the residual (CUSUM Squares) Tests were carried out to ascertain the stability of the models for forecasting purposes. Results: The findings showed that inflation rate in Nigeria is mild and increase agricultural productivity, although not statistically significant in the short run and not relevant in the long run. Also exchange rate and interest rate have direct relationship with food production which signifies that is the higher the exchange rate the higher would be the domestic agricultural output. In the same vein, government spending on agricultural sector and foreign private investment in agriculture sector have positive impact on the agricultural output and by implication, on food production in Nigeria. However, in the long run both foreign private investment in agriculture sector and government spending on the sector have inverse relationship which implies diversification of government fund and repatriation of profit and/or capital by foreign investors in the agriculture sector in Nigeria. Implications: Current macroeconomic policies does not attract foreign direct investment in the Agriculture sector of Nigeria thus the sector experience deficit in project growth rate despite favourable government spending and macroeconomic policies. Recommendation: Government should therefore engage agricultural stakeholders and put in place sound policies that would encourage foreign experts in the agriculture sector so that they can partner with Nigeria and Nigerians in order to enjoy the technological know - how in the sector. Exchange rate policy should be put in place to encourage exportation of agriculture output as well as to conserve foreign currency. Keywords: food production, Government expenditure, Exchange rate, Interest rate, inflation rate, macroeconomic variables

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