Abstract:
The project examined and evaluated in comparative terms, the economics of rice production and
processing in Nigeria using annual time series databetween 1981-2017. Specifically, it analyzed
the trend in rice production and processing, discussed factors affecting rice productivity,
determine rice production profitability and examine the factors limiting the processing of rice in
Nigeria.
Secondary data were used for analyzing the data and data was collected from Central Bank of
Nigeria Statistics and Food and Agricultural Organization (FAO). Dickey-Fuller unit root test
and co-integration test were employed to analyze the data collected. The result shows that the
time series used for the study are stationary at first difference. Some econometric tools were
employed to explore the relationship between the variable specified in the model. The study
examines the characteristics of each time series correlation is absent, then we adopted the cointegration/ECM test methods to determine the long-run relationship between the dependent and
independent variables. .
The result of co-integration test in the short run Error Correction Model (ECM) estimation at 1
lag length shows that Local Rice Price (LRP), Population (POP), National Gross Domestic
Product (GDP) are all significant at 1% to rice production. The result of the long-run ECM
estimation shows that Population is significant at 5%, local rice price and GDP are significant at
10%. The coefficient of all the variables is positively related. Local rice price is positively
related which shows increase in price leads to increase in production. The result of the trend
shows that price of local rice is stationary at first difference and also positively related to rice
production at both short-run and long-run ECM estimation which indicates that price of local rice
time trend favours rice production and processing. This shows a positive sign that rice
production and processing is positive and profitable due to the country used to importation of
rice. Hence, government should support production and processing of rice in the country more
than importation resulting in a decrease in the exchange rate and having a say on the price of
exported products. It is therefore recommend that more agricultural product should be produce in
the country and government should provide loan for rice farmer and purchase of rice processing
equipment to improve production of rice |
