Reconsidering agricultural credits and agricultural production nexus from a global perspective

This study investigates the impact of agricultural credits on agricultural production, considering factors like foreign direct investments, inflation rate, and government expenditures. The findings reveal a positive long-term relationship, indicating that a 1% increase in agricultural credits leads to a 0.19% increase in value-added agriculture, highlighting the significant role of credit in boosting agricultural productivity. However, foreign direct investment and government size were found to have adverse effects on agricultural value-added, with bidirectional causal links among several variables, demonstrating complex interactions within the agricultural sector. AbstractAccess to credit has been a key component in protecting a country's agriculture sector against uncertainties and climate-related shocks. Agricultural credits may also increase both agribusiness sectors' and farming-related commercial activities' exposure to world markets. This study aims to investigate agricultural credits' short-run and long-run effects on agricultural production using control variables such as foreign direct investments, inflation rate, and government expenditures. We found that credits to agriculture affect value-added agriculture positively in the long-run; specifically, when agricultural credits increase by 1%, value-added agriculture will increase by 0.19%; that is, an increase in credits to the agricultural sector leads to a significant increase in value-added agriculture, while FDI ...
Source: Food and Energy Security - Category: Food Science Authors: Tags: ORIGINAL ARTICLE Source Type: research