MONETARY POLICY AND AGRICULTURAL OUTPUT IN NIGERIA

Abstract

A nation's ability to fulfil its macroeconomic goals and build its economy depends heavily on its monetary policy. Depending on the nation's economic development stage, the goal and emphasis of monetary policy may change throughout time. Sufficient funding and monetary policy have become essential elements in all economic sectors, including agriculture.  The research mirrors aggregated views of monetary decisions as it affects Nigeria agricultural sector from 1981Q1. To Q4 of 2016. The four agricultural sub-sectors that were examined were crop production, forestry, fishery, and livestock. Other variables that were employed in this research were the over lending rate, benchmark interest rate, money stock, and forex rate. In addition, general level of prices and other economic activity in the economy as a whole were taken into account. The results show that the agricultural sector as a whole and its several subsectors have no effect on unexpected tightening of benchmark interest rate over the period; nonetheless, the agricultural sector is directly affected by shocks to monetary policy through the channels of interest rates and liquidity preference. The term reveal that long-term effects of the forex rate and broad money supply are significant. Throughout money supply channel's ability to disperse imbalance in the agricultural owing bench mark interest rate remained limited. The study revealed that strengthening policy rate, access to loan and lending rate will support Nigeria's agriculture sector's growth.