Agricultural Financing, Food Production and Poverty Reduction in Nigeria: Evidence from ARDL Model

Abstract

The need for adequate food production in Nigeria is increasingly becoming a must-achieved objective for policy makers and government agencies owing to continuous rise of food prices. Notwithstanding this, food production requires adequate financing and by extension, plays some important role in reducing poverty level. Hence, this study investigates the extent to which specific agricultural financing will impact food production and reduce poverty level. The study employs secondary data which spans 1981 to 2021 and adopts Autoregressive Distributed Lag (ARDL) for the methodology. The choice of ARDL is to capture the impact for short- and long-run period. The findings from the study highlight the following: specific agricultural financing is found to be highly instrumental in promoting food production in the country. Aside this, food production is equally found to have much impact in reducing poverty level. This impact is assured in both short- and long-run periods. However, while available arable land significantly influences agricultural finance, it is much found to be sustained and long lived in the long run. Thus, the policy implication arising from this study gives necessity to a policy that will enhance credit facilities to the farmers and other supports that will ensure food surplus.