An analysis of contribution of government agricultural expenditure in promoting agricultural growth in Kenya

Abstract

The main objective of this study is to investigate how changes in disaggregated government agricultural expenditure has affected agricultural growth rate in Kenya from 1983-2013. An analysis was carried out to determine how of Agricultural expenditure on: Extension services, Research & Development, Credit Assistance to farmers, Subsidies to fertilizers and other variables: Agricultural labourforce, arable land and Average Annual Rainfall impact on agricultural growth in Kenya. A time series data of 1983-2013 is used in this research paper. The main findings are that Research & Development expenditure positively and significantly impacts on Agricultural growth in Kenya. Credit Assistance to farmers and arable land are also found to positively impact on agricultural output though they are not significant in the study. Extension Services Expenditure, Spending on fertilizer subsidies, agricultural labourforce and Average Annual Rainfall are all found to have a negative impact on agricultural output. Spending on fertilizer subsidies and Average Annual Rainfall are found to be significant for the study while Extension services expenditure and agricultural labourforce are found to be insignificant in the study. An important policy implication of this study is that the government should strengthen the agricultural Research & Development sector, strategically re-think the fertilizer subsidies programme and put timely measures of water harvesting into place since all these variables were found to be significant in the study