THE EFFECT OF GOVERNMENT SPENDING ON AGRICULTURAL SECTOR PERFORMANCE

This study investigated the effects of government spending on agricultural sector performance in Nigeria, focusing on budget allocation to agriculture, subsidies for crop yield per hectare, and investment in rural infrastructure as key determinants of agricultural GDP, employment, and productivity in agriculture. A mixed-methods research design was utilized, combining both quantitative and qualitative approaches to provide comprehensive insights into the relationship between government expenditure and agricultural outcomes. Primary data were collected through structured questionnaires administered to 128 respondents from eight selected agricultural firms in Abeokuta, Ogun State, while secondary data were obtained from relevant government agencies and international organizations. The study employed multiple regression analysis to test three research hypotheses at a 5% level of significance using SPSS version 25.0. The findings revealed that all three independent variables have significant positive effects on agricultural sector performance. For agricultural GDP, the regression model explained 61.1% of the variance (R² = 0.611, F = 65.142, p < 0.05), with investment allocation (β = 0.328) and subsidies (β = 0.611, F = 0.394) showing the strongest effect. Similarly, for crop yield per hectare, the model accounted for 57.1% of the variance (R² = 0.571, F = 55.241, p < 0.05), with rural infrastructure investment again demonstrating the highest impact (β = 0.487, F = 39.321, p < 0.05). For employment in agriculture, the model explained 48.7% of the variance (R² = 0.487, F = 0.321). The study concludes that strategic government spending significantly enhances agricultural sector performance in Nigeria, with investment in rural infrastructure emerging as the most critical factor across all performance indicators. The research recommends that policymakers prioritize infrastructure development while implementing integrated spending strategies that combine adequate budget allocation, targeted subsidies, and strategic infrastructure investment. The findings contribute to the existing body of knowledge on agricultural economics and provide empirical evidence for evidence-based policy formulation in Nigeria’s agricultural sector. Keywords: Government spending, Agricultural performance, Rural infrastructure, Agricultural subsidies.