Agriculture was known to be one of the major contributors to national development, but suffering from neglect that has led the country to heart aching unemployment and poverty. The economic burden of hardship on the society necessitates this study. Therefore, this study look into the relationship between agricultural output and poverty reduction in Nigeria. These were with the view to examining the trend of agricultural growth overtime, relative effectiveness of crop production, livestock farming, forestry and fishery on poverty reduction in Nigeria.
Secondary data was used for the study, the set of data used was time series data over the period of 1980 to 2018, sourced from National Bureau of statistics (NBS), Annual abstract of statistics of Nigeria office of statistics (FOS), Central Bank of Nigeria,(CBN) statistical bulletin, World Development Indicators (2013), Federal Agricultural organization statistics of Nigeria( FAOSTAT). Time series econometrics (Principal Component Analysis and Vector Error Correction Model) was applied to generate poverty index, and the interaction among the variables respectively.
The result of the trend of Agricultural growth showed that during the period 1980 to 2018, the percentage growth of the agriculture sector increased by 5.50 percent. Also, the result of variance decomposition established that a shock on Crop production, Livestock rearing, Forestry and Fishery respectively have significant and lasting impact on poverty reduction long into the future and hence, relationship exist between agricultural output and poverty at the long run.
In conclusion, the results of the project showed that there were variations in the trend pattern of agricultural growth, which implies that agricultural growth can affect poverty reduction positively and also, that there is long relationship existing between different sub-sector of Agriculture. Therefore, this project work recommends that capital expenditure on Agriculture should be improved so that farmers can have access to implements
Keywords: Poverty Reduction, Agriculture, Principal Component Analysis, Unit root and Co-integration tests.