ASSESSMENT OF THE PRICE FLUCTUATION ON PRODUCTION OF SELECTED FOOD GRAINS IN NIGERIA (1981-2020)

Abstract

The study assessed price fluctuation on production of selected food grains in Nigeria (1981-2020). A longitudinal-trend design was adopted for the study. Time series data were collected from secondary sources. The data were analyzed using regression analysis [Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model]. Findings of the study showed that price fluctuation of the selected food grains are challenges toward achievement of small-scale farmers’ development which resulted to loss of capital and farmers shifting to other production activities. The results further revealed that, maize had a higher mean of N1,714.375 per ton; the maximum price fluctuation was found in  rice (N26,516 per ton) than maize (N19,247 per ton) and wheat (N15,999 per ton); maize (1.342703) and rice (0.874336) were skewed positively to the right tail implying the presence of more values that are higher than the sample mean and wheat (-3.08378) skewed negatively to the left tail implying the presence of more values that are lower than the sample mean;  rice and maize price fluctuations may be described as leptokurtic (positive excess kurtosis) with a kurtosis greater than 3 relative to the normal while wheat has a kurtosis less than 3 (negative excess kurtosis) and may be described as platykurtic implying that the distribution has a flattened curve relative to the normal. The Jarque-Bera probability test of normality showed that the price fluctuations of rice, maize and wheat were not statistically significant at P≤0.05 level of significance, thereby rejecting the null hypotheses. This implies that, price fluctuation has effects of on outputs and prices of selected food grains such as rice, maize and wheat grains in Nigeria for the period under study. The result of the price fluctuation test in prices of maize and wheat also showed that the ARCH [RESID(-1)^2] and GARCH [GARCH(-1)] terms are significant at P≤0.05 level, but rice revealed ARCH [RESID(-1)^2] and GARCH [GARCH(-1)] terms was significant at P≤0.05 level. These implies that the price of maize, wheat and rice will continue to fluctuate in line with their apriori expectations. The study concluded that pattern of real prices of food (rice, maize and wheat) gains movements in Nigeria fluctuate from 1981 to 2020. The study recommended that fiscal and monetary policies that can help increase food (rice, maize and wheat) grains’ production and keep its price within the reach of common men should be pursued by government and other stakeholders in the agricultural sector of Nigeria.