Al-Hikmah University Journal

Agriculture is seen as an important source of food for man and raw materials for agro-based industries. So as to provide bases for policies aimed at promoting agriculture, various empirical studies have been conducted with a view to identifying the determinants of agricultural production and output of the agricultural sector in Nigeria. But such studies still leave some gaps to be filled, including failure to test the the influence of government expenditure spent on agriculture (GEA) on the effect of agricultural capital stock on agricultural output. Data from the World Development Indicators, Food and Agriculture Organization and International Labour Organization were used for the estimation. The study aims to fill these gaps by adopting Cobb-Douglas production function, and we estimated two categories of equations. The study employed fully modified least squares (FMOLS) in estimating the agricultural output equations. The study found that government expenditure on agriculture (GEA), fertilizer consumption, financial development and trade openness has positive effect on agricultural output in Nigeria. Based on these findings, therefore, policy makers should target policies on inducing GEA, financial development and trade openness in order to achieve increase in agricultural output.