Date of this Version
Journal for the Advancement of Developing Economies 2018 Volume 7 Issue 1, pp 78-94
Stagnation in agricultural productivity, especially in an economy with fast and persistently growing population, would compromise food security. This study examined the factors influencing agricultural productivity in an agriculture-based economy. The study used a 35-year period (1980 – 2014) panel data focusing on Agricultural Productivity (AP), Real Gross Domestic Product (GDP), Government Agricultural Expenditure (EXP), Agricultural Trade Barrier (ATB), Consumer Price Index (CPI), Farm Machinery (MACH), Fertilizer Consumption (FERT), Human Capital (HCAP) and Irrigation (IRRG). Data were analyzed using Impulse Response Function (IRF) and Panel Least Squares (PLS) regression technique. The IRF revealed that there was a positive and stable response of GDP to shocks in AP in agriculture-based economy. Panel Least Squares revealed that consumer price index (p<0.01), irrigation (p<0.01) and machinery (p<0.01) increased AP in agriculture-based economy. However, FERT decreased (p<0.01) AP in agriculture-based economy. The study concluded that AP will grow in agriculture-based economy with an expansion in irrigation application, farm machinery and appropriate use of fertilizer. Therefore, improved irrigation infrastructure and farm machinery that will enhance smallholder farmer’s capacity for all-season cropping and appropriate application of fertilizer should be encouraged for increased agricultural productivity in agriculture-based economy.