Impact of Agricultural Public Finance Instruments on the Agricultural Sector’s Contribution to GDP: Empirical Evidence from Iraq

This study investigates the experimental impact of agricultural public finance tools (government agricultural investment spending and government agricultural loans) on the contribution of the agricultural sector to the Gross Domestic Product (GDP) in Iraq, using quarterly data for the period 2008–2024, through the use of the Autoregressive Distributed Lag (ARDL) model. The results of the study showed a statistically significant positive effect of government agricultural investment spending on agricultural GDP. The results also indicated a statistically significant positive effect of government agricultural loans on agricultural GDP. The study included important control variables such as rainfall rate, agricultural labor force size, and inflation rate, which showed statistically significant effects on agricultural GDP, highlighting the importance of climatic conditions, labor availability, and overall stability in supporting the agricultural sector's performance to increase its contribution to the Iraqi GDP. The study's findings also revealed a moderate speed of adjustment towards long-term equilibrium (with an error correction coefficient of −0.4315), reflecting a partial response of the agricultural sector to government financial policies. The study recommends improving public investment planning, reforming agricultural loan distribution systems, and enhancing institutional frameworks to ensure the effective use of government financial interventions and support sustainable growth in the Iraqi agricultural sector.