Impact Of Government Agricultural Policy On Agricultural Output In Nigeria: The Role Of Institutional Quality

Abstract

This study investigates the impact of government agricultural policy on agricultural output in Nigeria from 1980 to 2023, utilizing the ARDL model. The focus was on agricultural credit guarantee schemes, agricultural lending rates, government agricultural expenditure, and institutional factors such as corruption control, political stability, and rule of law. The result shows, In the short run, agricultural credit guarantee schemes, agricultural lending rates, and government agricultural expenditure showed no significant effects on agricultural output. However, institutional factors such as corruption control, political stability, and rule of law displayed marginally significant positive effects, suggesting that better governance enhances the effectiveness of agricultural credit schemes and improves agricultural output. In the long run, agricultural credit guarantee schemes showed a marginally significant positive impact on agricultural output, with a coefficient of 0.224, while agricultural lending rates had a marginally significant positive effect of 0.182, although both effects were relatively weak. Government agricultural expenditure, despite being positive, had no significant long-term impact. The result also indicates that, the interaction of Corruption control, political stability, and rule of law with agricultural credit guarantee schemes had significant long-run effects on agricultural output, with coefficients of 0.654, 0.752, and 0.663, respectively. The study therefore, recommends that, efforts to reduce corruption, improve political stability, and strengthen the rule of law should be prioritized to create a conducive environment for agricultural growth.