Rice trade policy and productivity: empirical evidence from Nigeria’s Rice sub-sector

Abstract

Low productivity, modest production and large-scale importation characterize Nigeria’s rice subsector despite government intervention through trade policy measures since independence. Studies on Nigeria’s trade policy and rice productivity are scanty in the literature. Therefore, this study investigated the effect of the country’s rice trade policy on rice productivity from 1961-2017, employing the Vector Error Correction Modeling approach. The results show that protectionist trade policy reduced rice productivity in the short run but was not significant in the long run. Producer price and domestic consumption improved rice productivity in the short run although, the latter reduced productivity in the long run. Similarly, fertilizer consumption and exchange rate reduced productivity in the short run but exchange rate increased productivity in the long run. Thus, government should focus on exchange rate, liberalized trade policy and appropriate fertilizer policy to improve Nigeria’s rice productivity.