EFFECT OF PRICE VARIATION ON CASSAVA PRODUCTION IN NIGERIA (1991 – 2022)

ABSTRACT This study examines the effect of price variation on cassava production in Nigeria from 1991 to 2022. The specific objectives were to analyze the trend of cassava production over the study period, determine whether a long-run or short-run relationship exists between cassava production and its determinants, and identify the factors influencing cassava production during the study period. Descriptive statistics were used to analyze the variables' distribution, while unit root tests assessed their stationarity. The study also employed a co-integration test (ARDL) to determine long-run relationships between cassava production and the defining variables, and an Error Correction Model (ECM) to estimate short-run effects. Descriptive analysis showed significant variability in the variables, all of which were positively skewed. The trend analysis revealed that cassava production rose steadily until around 2010, followed by increased volatility, with notable spikes and declines. These fluctuations may be attributed to external factors such as price volatility, climate changes, or policy adjustments.The trend in harvested cassava land area showed a steady increase from 1991 to 2000, slight fluctuations between 2000 and 2010, and rapid growth from 2010 to 2020. Cassava production initially surged during the late 1990s but subsequently declined and stabilized at lower levels through the early 2000s to the 2010s. Exchange rate trends indicated stagnation in production until the early 2000s, followed by a gradual increase, with a notable rise in production from the mid-2010s onwards.To assess the relationship between cassava production and its determinants, the study employed ARDL, unit root tests, long-run model estimates, and the ECM. The Augmented Dickey-Fuller (ADF) unit root test indicated that variables were integrated at either I(0) or I(1), confirming that no variables followed I(2). Consequently, the ARDL bounds test was used to determine long-run relationships, revealing a long-run cointegration between annual cassava production, harvested land area, producer price, and exchange rate. The Error Correction Model validated the existence of short-run cointegration between harvested land area, inflation rate, and exchange rate. The bound test revealed an F-statistic of 5.267, which exceeded the critical value of 2.26 at the 5% significance level. This result led to rejecting the null hypothesis of no cointegration, affirming that a long-run relationship exists between cassava production and its defining variables of annual producer price, harvested land area, exchange rate, and inflation rate. The study concludes that price variations, land availability, inflation, and exchange rates significantly influence cassava production in Nigeria. The study recommended that there is need for an implementation of strategies to mitigate the impacts of price volatility on cassava production, ensuring price stability through appropriate market interventions, in the study area.