Analysis of Agricultural Policies on Rice production In Nigeria (1991-2024): An Autoregressive Distributed Lag (ARDL) Model

This study examines the effects of agricultural policies on rice production in Nigeria from 1991 to 2024, a period characterized by significant shifts in food security strategies and import regulations. Utilizing the Autoregressive Distributed Lag (ARDL) modeling approach, the research investigates the short- and long-run relationships between rice output and major policy-driven variables, including credit to agriculture, annual budgetary allocations, agrochemical utilization, and a policy dummy representing periods of rice import bans. Data were sourced from the Food and Agriculture Organization (FAO), the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS). The empirical results reveal a policy paradox within the sector. In the short run, rice production is highly responsive to government interventions, with the Error Correction Model (ECM) indicating a rapid adjustment rate of 65% toward equilibrium following economic shocks. Specifically, government expenditure and import restrictions provided significant immediate boosts to domestic output. However, the long-run estimates present a different narrative: agricultural credit and annual budgetary allocations were found to have a negative correlation with production over time. This suggests that while financial injections spark initial growth, their long-term impact is undermined by systemic inefficiencies, such as credit misallocation, leakages in budget implementation, and structural bottlenecks. Conversely, the consistent use of agrochemicals and inputs emerged as a stable driver of long-term yield growth. The study concludes that Nigeria’s reliance on protectionist measures like import bans has effectively incentivized local farming but has not yet addressed the underlying productivity gaps. Policy recommendations focus on shifting from cash-based lending to input-based credit systems, enhancing budgetary transparency through digital tracking and transitioning from total market protection toward input subsidies that lower production costs.