Analysis of Agricultural Policy and its Effectiveness in Economic Growth: An Empirical Investigation in the Ethiopian Case
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Date
2007-03
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A.A.U
Abstract
This study has tried to identify the sources and determinants of agricultural
product at aggregate level. Agricultural product is examined as a result of
labor, land, change in policy environment and weather condition (rainfall).
The common finding in the agricultural policy analysis is that agricultural
policies fail to achieve their main objectives of farm income support efficiently
at national and regional level.
The sect oral analysis of the study shows that agriculture had a highest
fluctuation throughout the sample period in comparison to other sectors.
Nevertheless the production (yield) of major crops has been grown and
government attention in terms allocating government expenditure on
agriculture has been also increased in recent government than the p revious.
The time series result of the study shows that labor and land in the short run
as well as in the long run are found to affect agricultural product positively
and statistically significant. In the short run government expenditure also
affects the sector significantly and positively. The contribution of growth of
agriculture to national well-being, on the other hand, is found to be less than
that of the non-agricultural sector in the long run.
The statistical analysis also shows that the agricultural sector which still
provides the livelihood for most of the population made increasing growth rate
but with a declining contribution to the overall economic growth as compare to
other sector. Rapid population growth and low productivity of land and labor
are the main challenges which need great policy attention to improve the work
ethic as well as technological expansion to transform and play the sector's
significant role on the overall economic growth.
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Keywords
Ethiopian Case, Empirical Investigation