Binuomote And Adeyemo


Binuomote and Adeyemo

Greener Journal of Agricultural Sciences, Vol. 5 (4), pp. 110-117, July 2015.

 ISSN: 2276-7770 

Research Paper

Manuscript Number: 050115052



of Palm Oil Production in Nigeria:



SO and *2Adeyemo AO


of Agricultural Economics, Ladoke Akintola University of Technology, P. M. B.
4000, Ogbomoso. Nigeria.

of Agricultural- Economics, Afe Babalola University, Ado-Ekiti, Nigeria.


Email: 1sobinuomote @lautech; Tel:


Author’s Email: boladeadeyemo@ gmail. com; Tel: +2348034129007


study examined the determinants of palm oil in Nigeria between 1971 and 2010.
Palm oil productivity measured by palm oil gross output in tonnes 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, palm oil price and time trend
are the major determinants of palm oil productivity in the long-run while the
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. The
result of this study show that good price and exchange rate policies and factors
inherent in time such as infrastructural developments, expenditure on
agricultural research and extension, applications of modern techniques, use of
genetically modified seeds for oil palm cultivation which are all captured by
time trend are needed to bring about the much needed change in the Nigeria palm
oil sector.


palm oil, production, crude oil price, error correction mechanism. 

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