AKSU Journal of Agricultural Economics, Extension and Rural Development

ANALYSIS OF THE EFFECTS OF INFLATION ON FARMERS INCOME IN NIGERIA:(1970 to 2017)

Author:  Aniekan J. Akpaeti, Damian I. Agom and Namso N. Frank

Abstract
The study assessed the effects of inflation on farmers’ income and agricultural investments in Nigeria in order to bring about a sustainable growth and financial transformation in the agricultural sector. Data from secondary sources were derived from the Central Bank of Nigeria (CBN) statistical Bulletin and International Monetary Fund using co-integration and Error Correction Model (ECM).The results of the trend analysis showed that the inflation coefficient (4.74) percent was positive and highly significant at one percent. Findings also showed that there was a positive but low (0.22%) correlation that exists between inflation and farmers’ income while there was a strong positive relationship that existed between inflation and agricultural investments. The study therefore recommends that the Federal Government and the Central Bank of Nigeria alongside other stake holders in the economy should formulate viable and practical monetary policies that would curtail inflation and bring them under effective control. Inflation rate must be monitored and curtailed to a single digit rate so that growth can be sustained. In addition, there should be prudent economic policies that avoid excessive money printing in order to curb inflation thereby achieving via price stabilization so as to promote investment climate in Nigeria. This is necessary to ensure that the agricultural sector continues to play a major role in the Nigerian economy especially towards driving the economy to achieve the national growth.