Yield Response of Rice in Nigeria: A Co-Integration Analysis

Abstract

To help bridge information gap in supply response studies for Nigeria and inform policy decision on how the demand-supply gap for rice in Nigeria could be bridged, the current study through the use of Johansen’s Full Information Maximum Likelihood test estimated a yield response model for Nigeria using national level data for the period 1966-2008. The results suggest that, increasing yield levels for paddy rice in Nigeria and ensuring stability requires interplay of biophysical, socio-economic and structural forces. By estimates for the current study, bridging of the demand-supply gap can be realized through initiation of measures to address inefficiencies in the supply chain to ensure appropriate transmission of price increment, promotion of local rice consumption to ensure ready market for farmers in times of increasing output, addressing soil fertility challenges through efficient use of fertilizer and regular management of fertility of rice fields, and increasing farmers access to credit to help them meet cost of relevant inputs of production. The latter suggestion could to a greater extent incite appropriate response of farmers to both price and non-price incentives in the country. Diagnostic tests conducted indicate that the residual series is normally distributed, non-serially correlated and homoscedastic.