AJIBADE, TOYIN BENEDICT1*; AYINDE, OPEYEMI EYITAYO1; ABDOULAYE, TAHIROU2; AYINDE, KAYODE3
1 Department of Agricultural Economics and Farm Management, University of Ilorin, Ilorin, Kwara State, Nigeria
2 International Institute for Tropical Agriculture, PMB 5320, Oyo Road, Ibadan, Oyo State, Nigeria
3 Department of Statistics, Ladoke Akintola University of Technology, Ogbomoso, Oyo State, Nigeria.
Maize is one of the top-ranking cereals in Nigeria based on its use as staple food for the populace and also as raw material for several industries most especially in livestock feed production. Over the years, there has been volatility in maize prices evident in the fluctuation observed which is mostly of an upward trend. Rising food commodity prices, maize especially, coupled with the low income earnings of most individuals has far reaching implication on food security in Nigeria and of course welfare of many, considering maize is a major staple in the country. This study was therefore carried out to identify the determinants of maize price in Nigeria using an error correction approach. Time series data spanning 46 years (1970-2015) was used in the study. Data were secondarily sourced from FAOSTAT, CBN and NBS. Data collected were analysed using econometric tools including Unit root test, Cointegration test and Error correction mechanism. The study revealed that maize price in Nigeria responds negatively to the Gross Domestic Product and positively to Annual money supply, Official exchange rate and insurgency in the long run. Whereas in the short run, maize price is positively influenced by own export quantity, insurgency and trade liberalization while production has a negative influence on the price of maize. Some of the recommendations include the need to: take cognizance of the relevant macroeconomic variables in agricultural planning; encourage farmers to increase maize production; implement policies targeted at regulating maize export such as to ensure this is not detrimental to domestic availability; and intensify effort at tackling insurgency in order to provide producers and traders an enabling trade environment.
Keywords: Co-integration, Error Correction Model, Maize, Price determinants