Authors : C.S. Mesike, R.N. Okoh and O.E. Inoni
Abstract: The supply response of rubber farmers to prices and other factors in Nigeria was analyze using co-integration and vector error correction technique. The analysis was carried out on time series data collected from 1970-2008. The data where however tested for their time series characteristics using ADF tests. Preliminary analysis suggested that estimations based on their levels might be spurious as the results indicated that all the variables in the model were not stationary at their levels. Further results indicate that producers prices and the structural break significantly affected the supply of rubber. Response of rubber farmers to price were low with an estimated elasticity of 0.373 in the short-run and 0.204 in the long-run due to price sustainability and the emergence of other supply determinants indicating significant production adjustments based on expected prices. Policy efforts in promoting sustainable marketing outlets and promoting high value and high quality products for export were suggested in understanding farmer’s responses to incentive changes.
C.S. Mesike, R.N. Okoh and O.E. Inoni, 2010. Supply Response of Rubber Farmers in Nigeria: An Application of Vector Error Correction Model. Agricultural Journal, 5: 146-150.