<abstract xmlns="http://www.w3.org/1999/xhtml"><p> This study was carried out to examine the causal relationship between interest rate policy and agricultural production in a deregulated economic setting in Nigeria using time series data covering 1987 to 2011. The data utilized include data on interest rate and agricultural production which were obtained from various publications of central bank of Nigeria. Augmented Dickey Fuller (ADF) test, Vector autoregression (VAR) lag order selection test and granger causality test were employed in the data analysis and the result indicated that market driven interest rate was not significant in influencing agricultural production over the period of deregulation and this was attributed to the substantial volatility and high market driven interest rate leading to limited accessibility to credit facilities by small scale farmers. It is recommended that the central bank of Nigeria should strongly exercise some measure of interest rate control that favours investment friendly interest rate policy that is supportive of credit mobilization for sustainable agricultural production and also the realization of the goal of Agricultural Transformation Action Plan (ATAP) in Nigeria</p></abstract>

This study was carried out to examine the causal relationship between interest rate policy and agricultural production in a deregulated economic setting in Nigeria using time series data covering 1987 to 2011. The data utilized include data on interest rate and agricultural production which were obtained from various publications of central bank of Nigeria. Augmented Dickey Fuller (ADF) test, Vector autoregression (VAR) lag order selection test and granger causality test were employed in the data analysis and the result indicated that market driven interest rate was not significant in influencing agricultural production over the period of deregulation and this was attributed to the substantial volatility and high market driven interest rate leading to limited accessibility to credit facilities by small scale farmers. It is recommended that the central bank of Nigeria should strongly exercise some measure of interest rate control that favours investment friendly interest rate policy that is supportive of credit mobilization for sustainable agricultural production and also the realization of the goal of Agricultural Transformation Action Plan (ATAP) in Nigeria

Causality of Interest Rate Policy and Agricultural Production in an Atmosphere of Economic Deregulation in Nigeria

Department of Agricultural Economics and Rural Sociology, Ahmadu Bello University, Zaria, Nigeria

Agricultura Tropica et Subtropica

This article is distributed under the terms of the Creative Commons Attribution Non-Commercial License, which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.

This study was carried out to examine the causal relationship between interest rate policy and agricultural production in a deregulated economic setting in...

Causality of Interest Rate Policy and Agricultural Production in an Atmosphere of Economic Deregulation in Nigeria

Published Online: Jun 26, 2014

Page range: 68 - 71

Received: May 13, 2013

Accepted: Jun 09, 2014

DOI: https://doi.org/10.2478/ats-2014-0009

Keywords
interest rate, control, agricultural production, development, ADF, VAR

© Agricultura Tropica et Subtropica

This article is distributed under the terms of the Creative Commons Attribution Non-Commercial License, which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.

Causality of Interest Rate Policy and Agricultural Production in an Atmosphere of Economic Deregulation in Nigeria

Published Online: Jun 26, 2014

Page range: 68 - 71

Received: May 13, 2013

Accepted: Jun 09, 2014

DOI: https://doi.org/10.2478/ats-2014-0009

Keywordsinterest rate, control, agricultural production, development, ADF, VAR

© Agricultura Tropica et Subtropica

This article is distributed under the terms of the Creative Commons Attribution Non-Commercial License, which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.

Keywords
interest rate, control, agricultural production, development, ADF, VAR