“IMPACT OF MAJOR AGRICULTURAL PRODUCTION ON ECONOMIC GROWTH OF NEPAL

Abstract

Background: Agricultural production and economic growth are closely interconnected, especially in developing countries where agriculture plays a significant role in the economy. The objective of this research is to study Impact of Major Agricultural Production on Economic Growth of Nepal. Materials and Method: An analytical cross-sectional study was conducted to study the impact of Agricultural production on economic growth of Nepal based on secondary data 1974/75 to 2020/21. Data are be analyzed using descriptive and inferential statistical tools. In the descriptive statistics the trend of data trend analysis is done while for continuous variable, mean and standard deviation calculated. In the inferential statistics, Multiple regression was used. P-value <0.05 is considered as statistically significant. In order to interpret the data, the acquired data were analyzed by using E-views Statistical Package version 10. Result: The trend line of major agriculture production is in increasing order except Barely. There is very high degree of positive correlation between GDP with major crops. As per the study, result of Johansen Co-integration Test supported the existence of co-integration in the model. The coefficient of VECM was negative and significant expresses that there was evidence of long run relationship. This study's findings revealed that production of Wheat, Paddy, Maize and Barley account for 29.48% of the GDP's fluctuation. Conclusion: The study's empirical results show that agricultural output directly affects agriculture income and employment, and they also demonstrate that agricultural production directly affects economic growth. Major crops and GDP have a very strong positive correlation, and their relationship has been found to be significant. The GDP was significantly impacted by major crops. Keywords: Unit root test, GDP, Multi-collinearity, VECM, Co-integration test