International Journal of Food and Agricultural Economics (Oct 2018)
RICE OUTPUT RESPONSE TO COMMERCIAL LOAN TO AGRICULTURE IN NIGERIA FROM 1966 TO 2015
Abstract
This study examined rice output response to commercial loan to agriculture (CLA) in Nigeria from 1966 to 2015. Employing the Augmented-Dickey Fuller test to analyze the level of stationarity of each of the series and applied the Autoregressive Distributed Lags (ARDL), via bounds testing to determine long-run elasticities as well as short-run elasticities of rice output. Rice output was responsive to producer price of rice with elasticity of 0.34 in the short run at 5% and elasticity of 0.66 at 1% in the long run. Producer price of maize was negative and significant in the short run with elasticity of -0.48 at 5% level of significance and elasticity of (-1.38) in the long at 1% level of significance. Rice output showed an insignificant elasticity of 0.19 in the short run but was elastic (0.3%) and significant at 5% in the long run. Furthermore, hectarage was highly significant at 1% with elasticity of 1.14 in the short run and elasticity of 1.4 in the long run in relation to the output. It was therefore concluded that CLA made intense impact on rice output in the long run. On this premise therefore, it is recommended that government should review its Land Use Act of 1978 to enable producers more access to land for rice cultivation, secondly government should increase such funds to ease producers the ability to procure all the necessary inputs and make the fund readily and promptly available.
