Accepted 2nd January, 2015
Rice is an important crop in the economy of a developing nation like Nigeria. Available statistics have shown that the country is yet to attain self sufficiency in rice production. Hence, government had to retort to massive importation in order to bridge the supply-demand gap. Rising bills of rice importation over the years have been depleting the country’s foreign reserves. This had led to the evolution of three (3) trade policies regime (the pre ban period (1970-1985), the ban period (1986-1995) and post ban period (1997-2010)) by successive government to arrest this trend. This study analyzed the response of domestic production and demand of rice to importation under these policies regime. Secondary data on domestic production, demand and importation of rice from 1970 to 2010 were analyzed with both descriptive and inferential statistical tools. Descriptive analysis results showed that the mean domestic production of rice for pre ban, ban and post ban period were 728.87, 2165.82 and 6293.33metric tons respectively. While the mean domestic demand of rice was 1214.19, 3525.00 and 3931.17 metric tons during the pre ban, ban period and the post ban period. Analysis of variance (ANOVA) results indicated that there is significant difference in the means of domestic production and demand of rice during these periods. The elasticity coefficients for domestic production and demand for pre and post ban are 0.98, 1.60, -0.15 and 0.14 respectively. The study concluded that government should stimulate expansion of domestic production of rice while phasing out rice importation gradually.
Keywords: Supply-demand gap, import bills, Agricultural transformation and Elasticity