Cultivating prosperity: assessing the efects of fertiliser consumption, employment in agriculture, foreign direct investment, and exchange rates on value‑added agriculture in SAARC nations

Abstract

Economic globalisation profoundly impacts most countries constituting a pivotal contributor to the national income of many nations worldwide. However, despite this, the optimisation of their modest earnings and value-added agriculture remains necessary. This study explores the influence of fertiliser consumption, employment in agriculture, foreign direct investment, and exchange rates—considered components of economic globalisation—on value-added agriculture in the South Asian Association for Regional Cooperation (SAARC) member countries. Multiple linear regression was employed to quantify the influence in eight countries from 2002 to 2021. The analysis reveals that employment in agriculture significantly impacts value-added agriculture in this sector, with the exception of the Maldives, also a SAARC member. Fertiliser consumption in Bangladesh and Sri Lanka has demonstrated a notable contribution to value-added agriculture. Foreign direct investment significantly affects the value-added agriculture of Bangladesh, Nepal, and Pakistan. Furthermore, exchange rate significantly impacts value-added agriculture, except in Bangladesh and the Maldives. This study suggests that fostering employment in the agricultural sector, promoting the utilisation of fertilisers, attracting foreign direct investment, and monitoring exchange rates can positively influence value-added agriculture in SAARC countries. Policymakers can utilise these insights to develop a conducive policy framework capable of effectively addressing the specific challenges of agriculture in their respective countries and optimising value addition in the agricultural sector. Through the implementation of these policies, SAARC countries can enhance the agricultural sector's contribution to economic growth, bolster competitiveness, and achieve sustainable development.