IMPACT OF FERTILIZER SUBSIDY AND TARIFF POLICIES ON RICE PRODUCTION AND PRODUCTIVITY IN NIGERIA FROM 1979-2022

Abstract

The study was conducted to determine the impact of fertilizer subsidy and tariff policies on rice production and productivity in Nigeria from 1979-2022. The analysis spans three policy eras: the Pre- Growth Enhancement Support Scheme (Pre-GESS) era (1979–2011), the GESS era (2012–2015) and the Post-GESS era (2016–2022). Secondary data used for the study were obtained from FAO, the Federal Ministry of Agriculture and Rural Development and the United Nation’s COMTRADE. Analytical tools used include descriptive statistics, graphical trend analysis, Ordinary Least Squares (OLS) regression, ANOVA and Tukey HSD Post-hoc test to evaluate the contributions of fertilizer distribution and rice tariffs to rice production and productivity. The result reveal significant fluctuations in fertilizer distribution, with the lowest distribution of 371.062 metric tons in 2009 and the highest of 1,850.31 metric tons in 2021. These variations were influenced by policy shifts and changes in subsidy systems. Rice productivity remained low, averaging 2.0–2.5 tons per hectare, far below the global average of 7.5 tons per hectare, due to inadequate fertilizer use. The OLS regression indicated that 96% of the variation in rice production was explained by the model, with the Post-GESS era contributing the most (mean = 9,321,404.16 tons), followed by the GESS era (mean = 6,015,180.00 tons) to rice production. Key predictors, such as rice area harvested and Post-GESS fertilizer distribution, were significant at 1%, while rice import tariffs and GESS fertilizer distribution were significant at 5%. In conclusion, while fertilizer distribution has a significant positive contribution to both rice production and productivity in GESS and Post-GESS periods, significant impact to productivity only took place in Post-GESS period. The study recommended that the government should play effective regulatory role while allowing the private sector handles procurement and distribution of fertilizer; properly regulate cross-border rice trade and deploy surveillance technologies to properly man the borders.