Empirical Analysis Of Agricultural Production And Inflation Rate In Nigeria (1970- 2006)
Agriculture was known to be one of the major contributors to national development, but suffering from neglect has resulted to heart-aching inflation in Nigeria. Inflation in Nigeria of the recent has been attributed to high food prices. Increasing population growth has also rendered the growth in agricultural sector insignificant resulting to a little rise in output level. This study therefore analyzed the Nigerian agricultural production and inflation rate and examines their linkage and dimension. Time series data from 1970 to 2006 were employed for this study. The analytical techniques employed are descriptive statistics and Granger Causality model. The result revealed that there were variations in the trend of both inflation rate and agricultural output. The change in agricultural output (inventory change) caused inflation during the 1970-2006 period and not vice-versa. The result showed that there is direct relationship between agricultural output change and inflation rate. In addition, increase in previous year's inventory change of agricultural production increases inflation rate. Consequently, policies that can absorb the excess in agricultural output inventory thus resulting into food prices and inflation stability are recommended.
Keywords: Agricultural production, Inflation, Empirical analysis, Granger Causality