Abstract
This study estimates the short run and long run cash crop output volatility equations in Nigeria. Time series data derived from FAO data base for Nigeria and publications of Central Bank of Nigeria (CBN) covering the period 1961 to 2010 were used in the study. Unit root tests conducted on the specified time series showed that all series were integrated of order one at 1% probability level. The GARCH (1, 1) model was used to generate the cash crop output volatility for Groundnut, Cotton seed, Cocoa Rubber and Palm oil. The short-run and long-run elasticities of cash crop output volatility with respect to the specify explanatory variables were determined using the techniques of co-integration and error correction model estimation based on Ordinary Least Squares. The empirical results revealed that the nominal inflation rate, nominal exchange rate, loan guaranteed by ACGSF to cash crop sector, harvested hectare of cash crop and import substitution policy era influenced output volatility of cotton, groundnut, cocoa, rubber and palm oil in both short and long run periods in Nigeria. The study advocated for appropriate short and long term policy packages that should focused on the moderation of the identified significant macroeconomic shifters of cash crop output volatility in the country. Also attention should be directed towards improving the quality of land allocated to cash crop sub sector. Furthermore, the long run agricultural policies embedded in the import substitution policy should be use as basis for regulating cash crop output volatility in Nigeria.
Highlights
This study estimates the short run and long run cash crop output volatility equations in Nigeria
The empirical results revealed that the nominal inflation rate, nominal exchange rate, loan guaranteed by ACGSF to cash crop sector, harvested hectare of cash crop and import substitution policy era influenced output volatility of cotton, groundnut, cocoa, rubber and palm oil in both short and long run periods in Nigeria
The findings show that the inflation rate, nominal exchange rate of naira for dollar, harvested hectare of cash crops and loan guaranteed by ACGSF to cash crop sector as well as the agricultural policy content of import substitution period interact in each period to re-establish the long-run equilibrium in cash crop output volatility following a short-run random disturbance in the individual cash crop output volatility equation in the Nigeria’s economy
Summary
This study estimates the short run and long run cash crop output volatility equations in Nigeria. The measures include tax holidays, tariff protection, import duty relief, bans on certain food imports and the provision of credit facilities Despite these incentives, it is observed that several agricultural policies periods as well as programmes implemented by the federal government of Nigeria accompanied cash crop output variability (CBN, 2010). Akpan (2012) provided a comprehensive study on food crop output volatility behavior in different agricultural policy programme periods in Nigeria covering the period 1961 to 2009. He used GARCH (1,1) model to generate respective food crop output volatility. Jordaan et al, (2007) in South Africa, used standard error of the ARIMA process as the measure of volatility of prices of wheat and soybeans and found that volatility in the two crops was constant over time
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
