Tractor acquisition and agricultural performance among Nigerian farmers: Evidence from Co-integration Modeling technique

Abstract

Given the envisioned significance of the agricultural sector in Nigeria, which scholars have argued has the potential to promote pro-poor growth and poverty alleviation. However, questions have been raised about using and accessing modern agricultural machinery for farm cultivation. In this regard, this study uses a co-integration modelling technique to investigate the impact of tractor acquisition on agricultural performance. Two equations were established through the normalisation processes to proxy agricultural performance: the agricultural output and employment equations. Firstly, the analysis procedure requires a preliminary test to determine the statistical properties of the series used in this study; evidence from the outcome indicates that the series are not stationarity at level form and are integrated of order one. Secondly, based on the outcome of the preliminary result, the error correction model approach to co-integration was adopted, which helps to capture the short-term dynamics and long-term equilibrium of the effect of tractor acquisition on agricultural output and employment. The findings from the agricultural output equation show that credit to the agricultural sector, land cultivated for agricultural purposes, and tractor acquisition are statistically significant contributors to agricultural output. The agricultural employment equation shows that credit to agricultural purposes, land cultivated for agriculture and rainfall have a positive long-term relationship with employment. At the same time, tractor acquisition has a negative impact on agricultural employment in the long run. In the short run, exchange rate, rainfall, and tractor acquisition positively correlate with agricultural employment. In contrast, credit for agricultural purposes and land cultivated for agriculture negatively affects employment. Based on the findings, there is a need to strengthen policies that support access to credit, promote sustainable land use practices, and enhance water management. Also, policymakers should consider implementing measures that encourage the adoption of tractor technology while simultaneously addressing potential challenges related to job displacement.