Agricultural Expenditure Research Articles

Returns to Agricultural Public Spending in Africa South of the Sahara

Using data on 34 countries in Africa south of the Sahara (SSA) from 1980 to 2012, this paper assesses the returns to public spending in the agricultural sector, considering expenditures on agriculture as a whole versus expenditures on agricultural research. First, an aggregate production function is estimated using a fixed-effects, instrumental variables estimator to address potential endogeneity of agricultural expenditure and to obtain elasticities of land productivity with respect to total agricultural expenditure and agricultural research expenditure. Different model specifications are used to test the sensitivity of the results to different assumptions. The estimated elasticities are then used to estimate the rate of return to expenditure in different countries and groups of countries. The elasticity of land productivity with respect to total agricultural expenditure per hectare is estimated at 0.04, and elasticity with respect to agricultural research expenditure per hectare is estimated to be higher at 0.09. The aggregate returns to total agricultural expenditure and agricultural research expenditure in SSA are estimated at 11 percent and 93 percent, respectively. Comparative analysis of the estimates with those of previous studies, as well as across different countries and different groups of countries, is undertaken. Then implications are discussed for maintaining the high returns to agricultural research expenditure and for further studies on the low return to total agricultural expenditure, including more disaggregated analysis of expenditure on other functions besides research to better inform prioritization of agricultural expenditure.

The Impact of Public Agricultural Expenditure on Agricultural Output in Nigeria (1981-2014)

The Impact of Public Agricultural Expenditure on Agricultural Output in Nigeria (1981-2014)

Spillovers from Off-Farm Self-Employment Opportunities in Rural Niger

Agricultural households in Niger face constraints that may hinder agricultural production and threaten food security. A rural exodus is also resulting from a lack of formal and decent wage employment. The way to enhance agricultural production and improve food security while at the same time increase employment is still an important policy question in rural Niger. This study assesses the effects of off-farm self-employment opportunities on expenditures for agricultural inputs and on food security using the potential outcome framework for treatment effects. The study finds that farm and non-farm related factors determine off-farm self-employment opportunities in rural Niger. Also, participation in self-employment increases agricultural expenditures on purchased inputs and hired labour but decreases the propensity to hire labour. Self-employment opportunities favour food accessibility without having any additional effect on food availability and food utilisation. The results confirm that the policy of promoting the non- farm sector can be harmonious with the development of the agricultural sector. There is a scope to increase or create favourable conditions for the development of the non-farm sector in rural Niger.

The Effect of Public Expenditure on Economic Growth in the East African Community

ABSTRACT This study intends to analyze the impact of public expenditure on economic growth in Kenya, Uganda, Rwanda, Burundi and Tanzania. The specific objectives of the study was to investigate the impact of government expenditure on components of consumption, health, defence and agriculture. Using panel data covering the period 1995-2010, the study applied the Hausman test and verified results through the Fixed effects method. The findings were that agriculture and defence expenditure had a negative impact on economic growth while health and consumption expenditure had a positive impact on economic growth. Based on the summary of these findings, recommendations were prescribed to aid in wise policy choices. Key words : Public expenditure, economic growth, agriculture, health, consumption and defence.

The Impact of Government Expenditure on the Agricultural Sector in Jamaica: 1962-2011

Agriculture is an important component in the socio-economic landscape of Jamaica, but its performance since independence, measured in terms of its contribution to the gross domestic product, has registered a downward slide, moving from 13.5 per cent in 1962 to 6.4 per cent in 2011. Attempts have been made by the government to stem the downward slide, yet the sector continues to produce at sub-optimal levels in relation to the available natural resources. The objective of this paper is to estimate the link between the contribution of agriculture to GDP and the ratio of government expenditure to total budgetary expenditure, using a VAR model. The empirical evidence shows that government expenditure policy and the rate of inflation have a positive impact on the performance of the agriculture sector in terms of its contribution to GDP. The size of the coefficient for agriculture expenditure is 0.042, while it is 0.0017 for inflation.

The Political Economy of Public Expenditures in Agriculture: Applications of Concepts to Mozambique

AbstractThis paper undertakes an investigation of agricultural public investments in Mozambique, drawing on insights from qualitative field interviews conducted in Mozambique, secondary data analysis and examination of the existing empirical literature, and by situating these insights within a political economy conceptual framework. We explore the driving factors behind the amount and allocation of public funds to agriculture, and behind the differential attention that various types of public investments receive in the process of making decisions on resource allocation. Agricultural public investments are more likely to be made that have two key features: higher attributability to politicians and donors of the output of public spending, and a shorter lag time between expenditures incurred and outputs produced. Evidence on geographical targeting of agricultural public funds corresponds more closely with theories suggesting that resources are used to sway communities opposed to the ruling party, rather than to reward political supporters. Examination of the effect of actors' and organisations' incentives and constraints on resource allocation in agriculture points to the importance of not treating “government,” “the ruling party” and other institutions as monolithic bodies; the paper instead highlights how differentiated interests within seemingly coherent institutions drive what gets public expenditure attention in the agricultural sector.

Impact of Government Agricultural Expenditure on the Growth of the Nigerian Economy

This study examined the impact of government agricultural expenditure on the growth of the Nigerian economy fr om 1960 to 2012 . The study e mployed secondary data and sourced from National Bureau of Statistics, and Financial Review of Central Bank of Nigeria. The study employed E - view 7.2 statistical output as a window in exploring the possible links between government agricultural expenditure and economic growth. The results revealed that government agricultural Original Research Article

Can budget support to the cotton sector be used more efficiently? An assessment of the policy support measures in Mali and Burkina Faso

In Burkina Faso and in Mali, cotton is the main cash crop, export of cotton lint accounting for 60 percent and 15 percent of the value of national exports, respectively, in 2014. To maintain the level of cotton production, the Governments of Burkina Faso and Mali support the sector by ensuring stable and remunerative prices for producers. Indeed, analyses based on the Monitoring and Analysing Food and Agricultural Policies (MAFAP) methodology show that the policy environment supported producer prices by 21 and 12 percent in Burkina Faso and Mali, respectively, between 2005 and 2012. To do this, a price stabilization fund is implemented to support the sector in case prices on the international market fall. The MAFAP analysis shows that this type of price intervention, with other cotton-related budgetary transfers, represented 9 percent of food and agricultural expenditure in Burkina Faso between 2006 and 2012 and 31 percent in Mali. The present analysis assesses the level of policy support to the cotton sector in both countries. This is done, first, by calculating and discussing the level of price distortion within both countries for the 2005-2012 period, using the observed Nominal Rates of Protection at producer level. Two adjusted NRP are also computed, one using an adjusted benchmark price for cotton 2014 Annual Meeting of the International Agricultural Trade Research Consortium (IATRC)that is netted out of policy interventions at the international level (Anderson, 2006) and one using an alternate, non-misaligned CFA Franc to US dollar exchange rate (BCEAO, 2013). The comparison between the three nominal rates of protection provides insights on the level of domestic price distortion that compensates endogenous inefficiencies (high production and transport costs) against price distortions that result from exogenous causes (international price distortions and Euro to Dollar exchange rate misalignment). The cost of the price distorting policies, but also of other budgetary transfers such as input subsidies and the building and maintenance of infrastructure, is then examined for Burkina Faso and Mali. A budgetary allocation analysis is proposed, along with the computation of Nominal Rates of Assistance that reveal the full extent of policy support to the cotton value chain. The value chain inefficiencies are then discussed, using the Market Development Gap indicator, which was computed for the cotton value chain in both countries. The analysis reveals that a higher producer price that could be obtained by Mali and Burkina Faso producers, should inefficiencies be corrected through sound investment policies.

Agricultural development and government expenditures in the new EU countries

The main ambition of this paper is to analyse agricultural developments in selected new EU member states with particular emphasis on government expenditures in agriculture. The main objective is to identify the relationship between government expenditures development on one side, and agrarian sector performance (the value of production) in selected member states on the other. The conclusions drawn from this analysis are that the agricultural sector has changed its structure and position within the national economy of selected new EU member states significantly in the 20 years since the early 1990s. Member states included in the analysis reduced both the size of their agricultural sector (number of people working in agriculture, total arable areas, number of animals, etc.), and the value of agricultural output. Despite the significant reduction of the agricultural output, member states became more efficient – and in particular their productivity per farmer increased significantly. Selected country’s agricultural sector, its structure and production value development are closely related to government expenditures. Significant correlation is apparent between agricultural government expenditures and the change in the number of economically active persons in agriculture, development of agricultural production, agricultural area, agricultural GDP and agricultural capital stock. Regarding the elasticity of new EU member states’ agricultural sector in relation to changes in government expenditures, significant elasticity is apparent in the case of the number of economically active persons in agriculture, agricultural production (especially livestock production), area of arable land, agricultural GDP and capital stock.

Analysis of Agricultural Public Capital Expenditure and Agricultural Economic Growth in Nigeria 1961–2010

Aims: This study investigated the impact of agricultural public capital expenditure on agricultural economic growth in Nigeria over the period 1961 to 2010. Methodology: Annual data was used for this study and was obtained from Central Bank of Nigeria 2010 statistical bulletin and annual report. The data was analyzed using Augmented Dickey-Fuller test, Johansen maximum likelihood test and Granger Causality test. Results: The result of the Johansen cointegration test showed that there exist a long run relationship between all the explanatory variables and explained variable. The result of parsimonious error correction model showed that agricultural capital expenditure had a positive impact on agricultural economic growth. Also, granger causality test showed a unidirectional relationship between agricultural capital expenditure and agricultural economic growth. This means that agricultural economic growth does not cause expansion of agricultural public capital expenditure rather; it indicates that agricultural public capital expenditure raises the nation's agricultural economic growth. The Error Correction Mechanism (ECM) indicated that if the economy is out of equilibrium, 5.2% of disequilibrium will be corrected for annually. Conclusion: The study therefore recommends that the proportion of government capital expenditure that goes into agricultural expenditure financing should be increased. Original Research Article American Journal of Experimental Agriculture, 4(4): 443-456, 2014 444

Identifying Agricultural Expenditures within the Public Financial Accounts and Coding System in Ghana: Is the Ten Percent Government Agriculture Expenditure Overestimated?

This paper is part of four country case studies that take a detailed look at public expenditures in agriculture, and at how the data on expenditures are captured in government financial and budget accounts. The objective of these studies is to unpack the black box of public expenditure statistics reported in various cross-country datasets, and ultimately to enable the use of existing government accounts to identify levels and compositions of government agriculture expenditures, with better understanding of what these data are in fact accounting for.Since the endorsement of the Maputo Declaration in 2003, many African countries have reported larger government agriculture expenditure (GAE) shares. Do those reports reflect changes in actual allocations to the sector or changes in the accounting system? The 10 percent allocation of total government expenditure (TGE) to the agriculture sector that the government of Ghana claims has come under increasing scrutiny, particularly following recent budget statements that show less than 2 percent allocation to agriculture. This discrepancy reflects the confusion in defining the agriculture sector and in distinguishing expenditures of the government from expenditures of public corporations, which together makes up expenditures of the public sector. This is exacerbated by the lack of clarity in the public financial accounts and coding system for identifying and aggregating budgets and expenditures of the Ministry of Agriculture and other public departments, agencies, and corporations that carry out agricultural functions.

Agricultural expenditure in the European Union budget: a graphical analysis

The review of the European Union (EU) budget and the Common Agricultural Policy reform are tightly connected issues influencing each other. We assume that the outcomes will be influenced by their impact on the net balances of Member States (MSs), and use isobudget and isobalance functions to analyse different hypotheses about the EU budget expenditure. These functions are key in understanding substitutability or complementarity between agricultural and other expenditures and shed some light on the positions of the MSs in favour or against possible reform proposals.

The Research on the Adaptation of Grain Production in China to Climate Changes Based on Structural Equation Model

This paper uses the year data from 1998 to 2009, according to the MIMIC model in structure equation model to construct the adaptability system model of China's climate change to grain production, and makes an empirical research, found that sows area, the consumption of chemical fertilizers, agricultural water conservancy construction expenditure and the rainfall affects the maximum on grain production yield fluctuation of our country ; then according to the estimation results calculated the latent variable intensity fluctuation of grain yield, found that the grain production fluctuation of output intensity in future is further toward the positive trend.

Does Agriculture Matter for Economic Development? Empirical Evidence from Nigeria

In this study we aimed at answering the question, ‘Does agriculture matter for economic development in Nigeria?’ Life expectancy is modeled against agricultural output and agricultural expenditure, amongst other variables. Agricultural output is also modeled against a host of socio-economic, natural and human factors, which influence agricultural productivity. Applying Augmented Dickey-Fuller unit root test, Ordinary Least Squares, and the Newey-West method on secondary data and dummy variable used in the study, it was found that agricultural output has negative and significant impact on life expectancy in Nigeria. The impact of agricultural expenditure was found to be positive but nonsignificant. Real gross domestic product and industrial output were also found to influence life expectancy. Careful examination of the hypothesized socio-economic factors (political instability and industrial output), natural factor (rainfall), and human factor (carbon emission) showed that only industrial output and rainfall matter for agricultural output in the country: both variables have positive impacts on agricultural output. The study submits that as much as agriculture may matter for economic development, reliance on the sector alone without corresponding and simultaneous development of other crucial sectors such as education, health, and industry will not yield positive fruits for economic development in Nigeria.

Provinces and agricultural development: challenge or opportunity?

ABSTRACT The purpose of this paper is to explore the state and agriculture at the subnational sphere; an area currently receiving little attention in the South African agricultural economics fraternity. It is argued that South Africa's Constitution bestows certain decision-making and legislative powers on its nine provinces and that public goods and redistributive policy options are available to the agricultural sector. As about two-thirds of South African agricultural expenditure (83% if conditional grants are included) takes place at provincial level, it was shown that provincial dynamics are relevant. While the characteristics of tribal populations in provinces are found to be important, a poor alignment between provincial agricultural expenditure and certain elements of consequence (employment, value addition, etc.) can be shown. The paper also deconstructs the commonly used terms “state” and “agriculture” at a provincial level and dwell on the concept of the rational civil servant. In the case of the state, the challenge of moving beyond institutionalised silos is discussed. It is shown that agriculture consists out a multitude of actors, that representation often overlap and that similarities with a “tragedy of the commons” can be observed in the way some of the actors maximise personal gains. To understand the system non-traditional schools of thought such as “social economic systems” and “bounded rationality” may provide answers.

THE IMPACT OF GOVERNMENT AGRICULTURAL EXPENDITURE ON POVERTY IN ZIMBABWE

Global experience with pro-poor growth and empirical work spanning India, Benin and Malawi demonstrates the importance of agricultural expenditure for poverty reduction in poor rural areas, while also pointing to the need for complementary non farm sector growth. This paper proposes a simple methodology to estimate the agricultural spending that will be required to achieve the Millennium Development Goal of halving poverty by 2015 (MDGs) in Zimbabwe. This method uses growth poverty and growth expenditure elasticities to estimate the financial resources required to meet the MDGs. The paper attempts to address a key knowledge gap by improving estimation of first MDG agricultural expenditure at country level.

Access to Certified, Improved Rice Seed and Farmers' Income in Nigeria

Seed certification enhances seed quality and has the potential to increase rice (Oryza sativa L) yield and improve farmers' income. There is a dearth of information on factors that determine farmers' access to certified, improved rice seed and affect farmers' income in Nigeria. Hence, this study was conducted to fill this gap. The data were collected using a multistage random sampling technique. Osun, Niger, and Kano states were selected to represent upland, lowland, and irrigated rice growing systems, respectively. Five major rice-producing local government areas (LGAs) were selected from each state, followed by the selection of three villages from each LGA. In all, 600 rice farmers were selected on the basis of probability proportionate to the population of rice farmers in the villages. Data were collected using a structured questionnaire. Data were analyzed using descriptive statistics, the logistic regression model, and ordinary least square (OLS) regression. Contact with extension agents, access to media, age of household head, and years of formal education significantly increased the probability of access to certified, improved rice seed. Furthermore, agricultural expenditure (P 0.05), access to seed (P 0.01), household size (P 0.01), years of formal education (P 0.05), and income from other crops (P 0.01) had a significant positive effect on income from rice production. Increased access to the certified, improved rice seed, particularly through the formal seed-supply system, should lead to a significant improvement in the farmers' income and ultimately reduce the prevailing poverty among the farming households in Nigeria.

Insurgency, crime, and agricultural labor expenditure: Evidence from Punjab, 1978-1990

Using micro-level farmer expenditure surveys, this article studies the insurgency in the Punjab region of India, thought to have cost over 20,000 lives. It finds that the violence is statistically associated with an 11.4 percent decline in spending on permanent agricultural labor but did not have a statistically significant effect on the use of temporary labor. Moreover, insurgency-related violence likely signaled an increase in future kidnappings of farm labor and may have incentivized labor away from longer duration contracts. Richer farmsteads appear to be more sensitive to insurgent violence than poorer ones in reducing their labor spending.

The Impact of Federal Government Agricultural Expenditure on Agricultural Output in Nigeria

Every industrialized country today passed through the agrarian era. In fact, the industrial sector takes its roots from the agricultural sector. In a developing nation, government fiscal responsibi...

Growth, Employment, Exports and Wagner’s Law: Evidence from Pakistan’s Agriculture Sector (1960–2009)

The objective of this study is to empirically examine the relationship between growth, employment, exports and their impact on gross national expenditure (as a percentage of agriculture GDP), specifically in the context of Pakistan’s agriculture sector by using the Bound Testing approach. Data sets from 1960–2009 are taken for time series analysis. The analysis demonstrates that, in the long-run, Wagner’s Law does not hold in Pakistan’s agriculture sector, as agriculture growth is negatively correlated with the share of agriculture expenditure; while, in the short-run, Wagner’s law does hold, as it supports the hypothesis. Agricultural employment tends to be a significant negative correlation with the agricultural expenditure in the long-run. However, these results disappear in the short-run. Agricultural raw material exports have a significant and positive impact on agriculture expenditures both in the short- and long-run.