Abstract

The focus of this paper is to examine the effects of global food crisis on developing countries which most times are considered most vulnerable due to a number of factors ranging from conflicts in the region, to poverty and inequality, and factors that affect policies on agriculture. Issues concerning the use of food as alternative energy sources are still in its infant stages in Africa, and may not be relevant. The paper investigates the impact of capital expenditure on agriculture and credit to agricultural sector on the output of agriculture in Nigeria. Annual data covering 1990 – 2004 were used. Unit roots of the series were examined using Augmented Dickey – Fuller techniques. The overall results indicate that output of agriculture is positively related to capital expenditure on the sector but negatively related to the credit to agriculture. The paper therefore recommends improvements in government capital expenditure on agriculture. Credit policies and institutions should target beneficiaries (rural farmers).

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