ABSTRACT

 This study examined the effect of climate and some selected macroeconomic vaiiables on crop production in Nigeria (1980 - 2021). The objectives ofthe study were to ascertain the trends ofselected climate, macroeconomic variables and crops; measure the variability in the selected climatic parameters; determine the effect of climate and some selected macroeconomic variables on crop production; and estimate causal relationships between the selected climatic parameters and crop production. To address these issues, the Crop Yield Response Theory was adopted alongside some statistical tools such as; growth rate model, ARCH and GARCH models, Autoregressive Distributed Lags- Bounds testing approach, and Granger causality test. Results from the study showed an accelerating growth trend in rainfall, temperature, solar radiation and a deceleration in relative humidity. The macroeconomic variables such as credit loan to agriculture, labour force and real exchange rate accelerated, while the growth rate of area of land cropped, government expenditure in agriculture, gross fixed capital formation in agriculture and total foreign direct investment in agriculture decelerated. Inflation rate had stagnated growth rate. The growth rates of cassava, rice, maize and sesame accelerated, and that ofsweet potato, onion and groundnut production decelerated, while tomato crop experienced stagnated growth rate within the study period. The ARCH LM result indicated unpredictable changes in the climatic parameters, with an ARCH coefficients of 0.582, 1.628 and 1.066 for temperature, solar radiation and relative humidity, respectively, while GARCH coefficients of 0.000818 and 0.5851 were obtained in rainfall and temperature, respectively, thus, confinning the existence of volatility in the conditional variances. The result ofthe effect of climate and some selected macroeconomic variables on crop production revealed rise in temperature and relative humidity with positive effects on crop production in the long run, while rainfall and solar radiation showed negative (p<0.05) effects on root and cereal crop production in the short and long run. However, the effects ofsolar radiation was insignificant in cassava, maize, sesame and tomato, and apart from real exchange and inflation rates which had negative effects, every other macroeconomic variables evaluated in this study increased both food and cash crop production. The ECM result indicates that the short run distortions in groundnut and rice production, are adjusted to equilibrium in the long run at estimated magnitude of 86.1% and 91.0%, respectively. While there was no unidirectional causality between all climatic parameters and cassava, sweet potato, rice, maize, tomato, onion, and groundnut production, there was a unidirectional causality running between all climatic parameters and sesame production at 1 % significant level. The study recommends effective agricultural policies and intervention programmes which should focus on strengthening the activities of Agricultural Research Institutes in production and distribution of improved crop varieties to maintain increase in crops production. Also, the promotion of climate smart agriculture by engaging agricultural extension agents and the media in educating rural farmers so as to speed up the process of adopting such practices in the country is advocated. Stabilization of exchange rate from its volatile stage with reasonable degree of flexibility that guarantees the competitiveness of the domestic agricultural economy is highly recommended as it will reduce the inflation rate.