Informatics Publishing Limited

Abstract

The study focuses on the determinants of agricultural export earnings in Nigeria for the period 1980-2011. The explanatory variables were identified to include world income, exchange rate, degree of openness and rainfall (a proxy for weather). The study tested for stationarity, co-integration and employed VAR model and found that current agricultural export earnings in Nigeria are positively and significantly responsive to its lag 1, World income (lag 1 and 2), openness (lag 2) and exchange rate (lag 1). On the other hand, the impact of agricultural export earnings (lag 2), openness (lag 1), exchange rate (lag 2) and annual rainfall (lag 1 and 2) is negative. The results of variance decomposition and impulse response function reveal that world income and exchange rate is key variables that explain changes in agricultural export earnings. The paper recommended that there is need for value addition to agricultural products being exported and that conservation and rehabilitation programmes for agricultural products should be organized in areas where degradative processes are about to set in and farmers encouraged through appropriate pricing mechanisms. 

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