Abstract
DYNAMIC GROUNDNUT SUPPLY RESPONSE IN NIGERIA: A PARTIAL ADJUSTMENT APPROACH
Highlights
Before the discovery of crude oil exploration in Nigeria, oilseed agricultural products, including palm oil, groundnut, and soybeans were among the leading agricultural produce and export products in Nigeria
Partial adjustment model is use to analyze the supply response of groundnut production for the study period 1975-2015. It indicates that supply response of groundnut is dependent on price of groundnut, rainfall and land area of which the price of groundnut is significant (Table 4)
A fluctuating change in the price of groundnut causes a reduction in the groundnut production in the short run and even greater harm in the long run when the two magnitudes are compared i.e. for the short run, price of groundnut is significant at 5 percent with a negative coefficient of -0.19 which implies that a unit decrease in the price of groundnut leads to 0.19 reduction in production of groundnut while in the long run, price of groundnut is significant with a negative sign of -0.47 which implies that a unit decrease in the price of groundnut leads to 0.47 reduction in groundnut production, there is a linear relationship between the price of groundnut and the groundnut production in Nigeria which is expected
Summary
Before the discovery of crude oil exploration in Nigeria, oilseed agricultural products, including palm oil, groundnut, and soybeans were among the leading agricultural produce and export products in Nigeria. These agricultural products have taken a back seat in the global export competitiveness. Groundnut production has not increased as expected in Nigeria and the era of peanut pyramids has disappeared or remain redundancy. It might be partly because peanut farmers in Nigeria faced with limited farm inputs, finance, solely rely on natural rainfall with either recurrent drought or excess rains. Most farmers engaged communal labour, employed traditional farm inputs and their little personal savings for production in the area
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