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Agricultural Journal
Year: 2008 | Volume: 3 | Issue: 3 | Page No.: 229-234
Rice Supply Response in Nigeria: An Application of the Nerlovian Adjustment Model
M.A.Y. Rahji , O.O. Ilemobayo and S.B. Fakayode
Abstract: Rice is an important food crop in Nigeria. However, the inadequate level of the crop’s production in Nigeria is evidenced by problems, usually in terms of the ever widening supply and demand for the crop in the country. This in turn has resulted in the use of scarce foreign reserve on importation of the commodity that can be efficiently produced locally. This study therefore examined the response of rice supply to its demand in Nigeria for the period 1967-2004. The study applied the Nerlovian adjustment model to the Nigerian rice data set for the period 1967-2004. The estimated trend equations showed that time had significant influence on output, area and yield of rice over the period and sub-periods at 1% level mostly. The results tend to imply that almost all growth in output has been due to increases in area cultivated to rice. This is inferred from the growth rates for the entire period 1967-2004, the sub-periods 1967-1985 and 1986-2004 which were 9.31, 7.04 and 9.42, respectively. For these periods, the yield growth rates were -0.6, 2.74 and -4.5. The results also showed that for the entire period, area contributed 113% to output as against -7.4% by yield. The sub-period 1967-1985, typified as the era of non-intervention by the government, showed that area contributed 77%, while yield was responsible for 30% of the output. During the sub-period 1986-2004, the policy intervention era, area was responsible for 225% of the output as yield contributed -107% to output. The time trend variable used to represent the policy intervention point had no significant effects on the variables of interest in this study. Hence, rice supply does not seem to have responded to rice production policies before and after 1986. The S/R and L/R price response elasticities are inelastic as they are all less than one. The estimated coefficients of adjustment ranged between 0.23 and 0.33; hence, the speed of adjustment by the variables is said to be sluggish. Under this situation, achieving significant increases in output will be hard to attain. Measures that will lead to productivity increases in rice production are therefore, nessary. It is therefore, recommended rice farmers should be encouraged to adopt and use improved technologies like the New Rice for Africa (NERICA) variety. The extension service delivery system must also be improved in order to achieve the desired results.
How to cite this article:
M.A.Y. Rahji , O.O. Ilemobayo and S.B. Fakayode , 2008. Rice Supply Response in Nigeria: An Application of the Nerlovian Adjustment Model. Agricultural Journal, 3: 229-234.