Effects of Agricultural Commodity Prices on Agricultural Output in Nigeria
Keywords:Agricultural output, Commodity prices, Oil price, Agricultural commodities, FMOLS
In Nigeria, there is over-reliance on oil proceeds at the expense of revenue accrued to agriculture, which adversely affects the standard of living. The study examines the effect of commodity prices on agricultural output in Nigeria. In the empirical model, agricultural output depends on maize, wheat, soya beans, and oil prices. Data covering 1991 and 2017 from the Central Bank of Nigeria Statistical Bulletin and Food and Agricultural Organisation was analysed using a fully modified OLS (FMOLS) technique. The result shows that maize and soya bean prices positively affect agricultural output, while wheat prices and oil prices negatively affect agricultural output in Nigeria. This implies that agricultural output increases with increased agricultural commodity prices and falls with an increase in oil prices. The paper recommends the need to expand the production of agricultural commodities through a direct government partnership with farmers in the area of supply of expert knowledge, technology and credit. Also, to redirect the populace's focus from oil in favour of agriculture, there is a need to introduce a subsidy for agricultural output to make its pricing attractive and provide leverage for farmers' occasional shocks in their yield.
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Copyright (c) 2022 Anu K. Toriola
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