Assessment of the effect of petroleum dependency on food crops production in Nigeria

Abstract

The Nigerian agricultural sector was neglected as a result of the discovery of oil and gas in the early 70s which attracted young people to seek for jobs in the sector. Foreign reserve of the country depleted as a consequence of food imports. The paper focused on Assessment of the effect of petroleum dependency on food crops production with the specific objectives to determine the trend, determinants of food crops production and establish the relationship between output of some food crops and oil exports. Secondary data obtained from Central Bank of Nigeria (annual statement of accounts (various issues) and statistical bulletins from 1970 to 2012 on output of selected food crops (maize, rice, millet, sorghum, wheat and Hungry rice Acha) as well as oil export were used for the study. Data collected were subjected to Augmented Dickey-Fuller (ADF) test for stationarity. Trend in food crops production revealed that maize, millet, sorghum, wheat and acha showed steady increase from 1985 -1989 to 2004 -2009 while rice production recorded downward slide from 1970 -1984 but there was steady increase in production from 1985 -2004. There was the existence of stationarity relationship between the selected food crops. Also, there was the existence of the same stochastic trend between selected food crops and oil exports as confirmed by error correction model (ECM). Sustained increase in the exchange rate of the naira and oil export had an inverse relationship with food crop production. Diversifying the economy was recommended to curtail food shortages in the country.