Effect of farm wage rate and sorghum farm gate price on sorghum hectarage in Nigeria


Cointegration and the associated error correction model were used to investigate the effect of farm gate price and farm wage rate on sorghum hectarage in Nigeria between 1961 and 2004. The result shows that sorghum hectarage was well cointegrated with the two variables while the two variables are not. Long run relationship exists between sorghum hectarage and its own price but not with farm wage rate. There was granger causality between hectarage and the variables but there was no feedback. Policy prescription is needed to correct for temporary distortion in the sorghum market, particularly to ensure that sorghum hectarage continues to rise and hence supply, as the market forces alone was unable to correct it. It is also recommended that farm wage must be made more attractive so that the supply will reduce rate..

39th Annual Conference of the Agricultural Society of Nigerian, University of Benin, Benin City, October, 2005
farm wage rate farm gate price cointegration error correction model granger causality
Job Nmadu
Professor of Agricultural Economics and Dean, School of Agriculture and Agricultural Technology

Research interests are economic efficiencies of small scale farming and welfare effects of agricultural interventions.