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


(DOI: http://doi.org/10.15580/GJAS.2015.4.050115052)

 

Determinants
of Palm Oil Production in Nigeria:

(1971-2010)

 

1Binuomote
SO and *2Adeyemo AO

 

1Department
of Agricultural Economics, Ladoke Akintola University of Technology, P. M. B.
4000, Ogbomoso. Nigeria.

2Department
of Agricultural- Economics, Afe Babalola University, Ado-Ekiti, Nigeria.

 

Email: 1sobinuomote @lautech .edu.ng; Tel:
+2348033879828

 

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


Abstract

This
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.

 

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

Post-review Rundown

View/get involved, click [Post-Review Page]

References

Adegbola, A. A; 
Are, L. A;  Ashaye, T. I and
Komolafe, M. F. (1979), Agricultural
Science for West African Schools and Colleges, Ibadan, Nigeria;
Oxford University
Press.

 

Dada, L. A. (2007). The African export industry:
what happened and how can it be revived? Case Study on the Nigerian Palm Oil
Industry, FAO, Agricultural Management,
Marketing and Finance
, Working Document 17.

 

Dickey, D.A. and Fuller, W.A., (1981).
Distribution of the estimators for autoregressive time series with a unit root.
Econometrica 49, 1057–72.

 

Egwuma, H., Shamsudin, M. S., Mohamed, Z., Kamarulzaman, N. H.,
and Wong, K. K. S. (2016) “A Model for the Palm Oil Market in Nigeria: An
Econometrics Approach”  International Journal of Food and Agricultural Economics ISSN 2147-8988,
E-ISSN: 2149-3766 Vol. 4             No.
2, 2016, pp. 69-85

 

Engle, R. F. and Granger, C. W. J (1987)
Co-integration and error correction: Representation, estimation and testing. “Econometrica (55): 251-275.

 

Gbetnkom, D.  and Khan, S.
A. (2002). Determinants of Agricultural Exports: The Case of Cameroon. AERC
Research Paper 120, AERC, Nairobi, Kenya.

 

Hendry, D. F. and N. R. Ericsson (1991). “An Econometric
Analysis of UK Money Demand in Monetary     Trends
in the United States and the United Kingdom by Milton Friedman and Anna J.
Schwartz.”           American Economic
Review
: 8–38.

 

Johansen, S. (1988) “Statistical Analysis of
Co-integrating Vectors”. Journal of
Economic Dynamics and Control
(12); 23-254.

 

Kajisa, K., Maredia, M.K., and  Boughton, D. (1997). Transformation versus
stagnation in the oil palm industry: A comparison between Malaysia and Nigeria.
Michigan State University, Department of
Agricultural, Food, and Resource Economics
.

 

Kremers, J.N. Ericsson and J. Dolado (1992),
‘The Power of cointegration tests’, Oxford
Bulletin of Economics and Statistics
(54): 349-367.

 

Nzeka, U. M. (2014). “Nigeria Provides Export
Market for Oilseeds and Products”. GAIN Report, USDA Foreign Agricultural Service.

 

Olagunju, F. (2008) Economics of Palm Oil
Processing in Southwestern Nigeria. International
Journal of Agricultural Economics and Rural Development
1(2): 69-77.

 

Osterwald-Lenum, M. (1992) “A Note with Fractiles of the
Asymptotic Distribution of the Maximum Likelihood Cointegration Rank Test
Statistics: Four Cases”, Oxford Bulletin
of Economics and Statistics
, 54, 461-472.

 

World Rainforest Movement (2001). “The Bitter Fruit of Oil Palm:
Dispossession and Deforestation”. ISBN 9974 – 7608 – 4 – 4

Leave a Reply

Your email address will not be published. Required fields are marked *