Output Growth Decomposition in Nigeria Agriculture: An Econometric Analysis 1960-2018

International Journal of Research and Scientific Innovation (IJRSI) | Volume VI, Issue X, October 2019 | ISSN 2321–2705

Output Growth Decomposition in Nigeria Agriculture: An Econometric Analysis 1960-2018

Olufunke O. Ilemobayo

Department of Agricultural Extension and Management, Rufus Giwa Polytechnic, Owo, Ondo State, Nigeria

Abstract: – Nigerian agriculture has relied on land area expansion and not optimal land use, due to population pressure. Thus agricultural production has moved into marginal lands, characterized by poor output. There is however a paucity of research on output growth as most studies emphasized only production. Hence output growth decomposition in Nigeria agriculture were investigated. Secondary data were sourced from FAOSTAT covering 1960 to 2018.Variables used include agricultural Gross Domestic Product (GDP), land, labour, fertilizer and tractors. Augmented Dickey Fuller (ADF) test was carried out on stationary dataset. Stochastic Frontier Model, Output Decomposition and Multiple Regression Models at 0.05 was used. ADF tests indicated that variables were not stationary at their level but became stationary at first difference, output at 5% and others at 1%, indicating no spurious regression results. Key parameters of the stochastic function were positively significant. Fertilizer had 0.2376, land 0.2234, labour 0.2032 and tractors 0.1681. Agricultural production showed decreasing return to scale having a coefficient of 0. 8283, and inefficiency level with Technical inefficiency (TEI) of 0.1754. Output growth rate was 3.52(100%), it was decomposed into input growth contributed (14.8%, TFP contributed 62.8%, and residual added 22.4%.

Keywords: Technical efficiency, Agricultural, Growth, Output, decomposition

I. INTRODUCTION

Nigerian agricultural sector in the 1960s was the most important in terms of contributions to domestic production, provision of employment, foreign exchange earnings, food supply and its linkage to other sectors of the economy (NBS 2014, Daramola, 2014). The main emphasis then was on agriculture to the extent that Nigeria was a major exporter of such agricultural products as palm produce, cocoa, groundnut, cotton and rubber. Besides, the agricultural system was able to produce enough of food crops like yam, cassava, maize, millet, sorghum and soya beans for the nation, to the extent that there was almost no need for food importation. Hitherto, agriculture accounted for over 60% of the Nation‘s Gross Domestic Product (GDP).

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