The four main resource regions of Nigeria, namely, the East, Middle-belt, West and North, differ in their endowments in the production and processing of oilseeds. The Federal Government has allocated resources to the oilseeds sub-sector across the regions without apparent rational basis. Consequently, huge imports of oilseed products, high and unaffordable oilseed product prices, and the establishment of new oil mills in the face of frequent shutdowns and chronic under-utilisation of existing mills, still characterise the sector. In this paper, a spatial equilibrium model of the Nigerian oilseeds economy is used to determine the optimal location and number of mills across the regions, and to establish regional competitiveness in aid of the planning and development of the oilseeds sub-sector. In the model, production (farming and milling) activities are tied to arable land and milling capacity constraints. The shadow prices of the arable land and milling capacities are used as a measure of competitiveness. Results indicate that, because of its central location, the Middle-belt is the most competitive in oilseeds production at a shadow value of Nl8,400 per hectare of cultivated land, followed by the North, West and East regions. However, the East is the most competitive in oilseeds milling, followed by the West, due to their close proximity to ports of export. These results suggest that transport cost is the main determinant of the viability of oilseeds production and milling in Nigeria. 0 2001 Elsevier Science B.V. All rights reserved.East produces and mills the greatest quantities of palm kernel; the Middle-belt, soybeans; and the West produces commercial quantities of palm kernel, but mills substantial soybeans and cotton seeds. The Federal Government of Nigeria has influenced this geographical distribution via the allocation of public funds in pursuit of agricultural development on a commodity basis.This spatial pattern of the production, processing and utilisation (consumption) of the major oilseeds and their products (oil and cake) in Nigeria generates a complex network of trade flows of oilseeds and their products across the major regions of the 0169-5150/01/$ -see front matter 0 2001 Elsevier Science B.V. All rights reserved.PII: S 0 1 6 9 -5 1 5 0 ( 0 1 ) 0 0 0 5 8 -5
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