Greener Journal of Agricultural Sciences, Vol. 5 (4), pp. 110-117, July 2015.
ISSN: 2276-7770 © 2015 Greener Journals
Manuscript Number: 050115052
Analyses of the Determinants of Palm Oil Production in Nigeria (1971-2010)
Adeyemo Abolade Olufemi
Department of Agricultural- Economics, Afe Babalola University, Ado-Ekiti, Nigeria.
Tel:+2348034129007, E-mail: boladeadeyemo@ gmail. com
This study analyses the determinants of palm oil in Nigeria between 1971 and 2010. Palm oil productivity measured by palm oil gross domestic product (PGDP) was specified as a function of factors such as exchange rate, crude oil price, palm oil price and structural adjustment programme (SAP). Quantitative estimates, based on Augumented-Dickey Fuller unit root test, co-integration and error correction specification, indicate that the exchange rate and palm oil price are the major determinants of agricultural productivity in the long-run while price of crude oil is the most important determinant of palm oil productivity in the short-run. The result further shows that the error correction mechanism (ECM) indicated a feedback of about 99.8% of the previous year’s disequilibrium from long-run domestic palm oil production. It is concluded that the price of crude oil indeed has a negative effect on palm oil productivity in Nigeria. It also shows that only a good combination of goods exchange rate and a stable palm oil price can bring about the much needed change in the Nigeria palm oil sector.
Keywords: palm oil productivity, exchange rate, crude oil price, gross domestic product, structural adjustment programme (SAP).
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