ABSTRACT  

This study was carried out to determine the effect of evaluate the budgetary a1ocation to agriculture using capital expenditure and to analyze its impacts on agricultural output as well the intra-sectoral distribution of funds and examine its implication for agricultural development. Data were collected for fourteen (14) year period (1994-2007) from Abia State Annual. Approved estimates 1994-2007 fiscal years; Annual Reports of Accountant General of Abia State with Statement of Account ('arious issues), Statistical publications of the Central Bank of Nigeria (CBN), National Root Crop Research Institute (NRCRI) and Abia State Agricultural Development Programme (A BAD P). Frequencies, simple percentages were used to obtain the spread pattern of budgeary allocation vhile Regression and Correlation Techniques were employed to determine the impact of government funding on agricultural production. The result of the study show that 011 the average, the Abia State Government Allocated 12% to the agricultural sector, this average allocation to the sector clearly fell short of the FAO/NCA recommended 20-25% allocation for State Government. 'As the agricultural intra-sectoral allocation, crop sub-sector allocation got on the average an overwhelming a1ocation of 79.71% while livestock, fisheries and forestry were allocated 15.11%, 4.14% and 1.04% respectively. The linear production function was tested to estimate the functional relationship between annual crop output and some of the major factors which influence agricultural production, this helped to determine the impact of Government financing on agricultural yield. From the 'egression analysis, the contribution of government funding has no impact and was not significant but total land area and total rainfall were positive and total population was negative. The relative low percentage allocation to agriculture negates government claim of making agriculture a priority sector for development. It was recommended that increase in government expenditure on agriculture will bring further increase in agricultural output.