Credit Supply and Rice Output in Nigeria : Empirical Insight from Vector Error Correction Model Approach

This study investigated the effect of credit supply on rice output (RO) in Nigeria within the periods 1981–2016 by employing the vector error correction model approach. Findings from the research revealed that a rise in credit supply would lead to increase in RO. In addition, the study indicated that a shock in investment, and labour would cause decline in RO while a shock in money supply and inflation rate would cause RO to rise in the country. Based on the result of the study, it is recommended that government in partnership with deposit money banks should create a scheme that will provide an interest free loan to farmers that are involved in rice production. Also, government should encourage rice farmers by supplying them farm inputs (which includes the provision of high yielding varieties, fertilizers, land, irrigation) at a subsidizes rate