Food Consumption–Production Adjustments to Economic Crises under Credit Constraints in Nigeria

Abstract

Poverty and food security risks are increasing in resource-reliant African countries such as Nigeria. Resultantly, policymakers have attempted to use agricultural policy reforms to boost productivity and increase income. However, macroeconomic instabilities complicate agricultural transformation. Consequently, farm households try to diversify food production to mitigate shock-induced nutrition losses. However, credit constraints disrupt the planting of different crops required for adequate diets. This study investigates food security performance during Nigeria’s Agricultural Transformation Agenda. It examines whether credit-constrained households adjust food consumption and production differently from credit-unconstrained families. The aim is to uncover the nutritional implications of the adjustments and evaluate the changes such a linkage has undergone during the commercialization initiative. While credit-unconstrained households diversified food production to mitigate food security risks, credit-constrained households were unable to do so. A policy that improves credit access for farm-input purchases appeared to increase food security. However, macroeconomic shocks disrupt the smooth implementation of the policy. Resultantly, policy decisions on the designation of a financial-support scheme that approves credit to households for operating off-farm enterprises must be considered. The business profits could complement farm income to improve family nutrition. Part of the profits could again be plowed back into farm-input needs to enhance agricultural commercialization.