Effect of Price Variation on Maize Production in Nigeria (1991 – 2022)

This study examines the effect of price variation on maize production in Nigeria from 1991 to 2022. The specific objectives include analyzing the trend of maize production during the study period, assessing the presence of long-run or short-run relationships between maize production and its determinants, and identifying the factors influencing maize production from 1991 to 2022. The study utilized descriptive statistics to analyze the normality of the variables and applied unit root tests to assess their stationarity. A co-integration test (ARDL) was used to evaluate long-run relationships between maize production and relevant variables, while an Error Correction Model (ECM) estimated short-run effects. Descriptive statistics and graphical analysis revealed significant variability among the variables, all of which were positively skewed. The trend analysis indicated that maize production increased steadily until around 2010, when it became more volatile with marked peaks and drops, suggesting disruptions due to factors such as price changes, climate variations, or policy adjustments. The analysis of the annual harvested land area for maize revealed an initial decline in production, hitting a low around 2000. Production remained stable until a recovery began around 2005, followed by steady growth from 2010 onwards, with slight fluctuations and a peak near 2020. The trend of inflation initially showed a sharp increase in maize production, peaking in the late 1990s, followed by a decline and subsequent stabilization at lower levels through the early 2000s to the 2010s. The exchange rate trend indicated stagnant maize production until the early 2000s, followed by gradual growth, with a significant rise from the mid-2010s, reflecting an upward trend. The ARDL, Unit Root Test, Long-run Model, and Error Correction Model estimates were used to determine the long-run and short-run relationships between maize production and its determinants. The Augmented Dickey-Fuller (ADF) unit root test showed that the variables were integrated at orders I(0) or I(1), confirming no variables were integrated at I(2). The ARDL bounds test indicated a long- run relationship between annual maize production, harvested land area, inflation rate, and exchange rate. The ECM validated short-run cointegration between the producer price of maize, harvested land area, and exchange rate. The bounds test yielded an F-statistic of 3.485, exceeding the 5% critical value upper bound of 2.56. This result led to the rejection of the null hypothesis of no cointegration, confirming a long-run relationship between maize production, producer price, harvested land area, exchange rate, and inflation rate. 9 The study concludes that maize production in Nigeria is significantly influenced by price variations, inflation rates, exchange rates, and available land area. The study therefore recommended that Policymakers should focus on stabilizing the economic environment, particularly through measures that reduce price volatility and ensure long-term consistency in maize production, in the study area.