EFFECT OF AGRICULTURAL TRADE OPENNESS ON THEPRODUCER PRICES OF RICE IN NIGERIA: IMPLICATIONS FOR AGRICULTURAL TRADE POLICIES

Abstract

Recently, economies of the world have become increasingly linked through expanded international trade with discernible effects on the developing nations, especially Africa, and in particular, Nigeria. This article therefore determined the effect of agricultural trade openness on the producer prices of rice in Nigeria.The study was based on secondary data, spanning 1993-2015.The study showed that agricultural trade openness reached all-time low in 1996 while noticeable peaks were observed in 2001, 2007 and then in 2011. In terms of the growth, the highest trade openness growth rate of 164.8 per cent was observed in 1997, followed by 140.3 per cent in 2011. The review of producer prices revealed that producer prices had been on the rise, with noticeable peaks between 2005 and 2007, 2009 and then in 2013. Evidence from this article further establishedlong run inverse relationship between agricultural trade openness and producer prices of rice.The study recommended a follow-up on the Agricultural Transformation Agenda’s initiatives of integrated rice value chain development, substitution of local for imported rice and implementation of favourable tariff, operationalisation of favourable exchange rate regime and privatesector led marketing boards, with the view to stabilizing the price of rice, ensuring quality, competitiveness and enhancing producers’ returns.