ABSTRACT

The broad objective of this study was to determine the effect of SAP on Cropped area and identify the factors that influence aggregate output of selected crops. The Before and After methodology was adopted. The study covered the pre-SAP (1960-1985) and SAP (1986-2006) periods, on the basis that SAP policies are still currently in operation. Secondaiy data were used. Chow's test was used to determine the effect of SAP on cropped area while multiple regression analysis was used to identify factors that influence aggregate output of the selected crops. Findings suggest that aggregate cropped area and total output of the selected crops both exhibited negative trends pre and during SAP policy regimes. However, only the trend coefficient for cropped area was significant at 5% level during-SAP. Cropped area grew positively pre-SAP while it grew negatively during-SAP. On the average, there was no significant difference in the mean and growth rate of cropped area between the two periods. Output grew positively in both pre-SAP and during-SAP period. On the average, growth rate of output was higher during-SAP than pre-SAP. There was no significant difference in growth rate of output between the two periods. The significant determinants of cropped area of the selected crops under the pre-SAP period included population, annual rainfall, real exchange rate, value of food import and agricultural crop GDP. Population and annual rainfall were positively related to cropped area. Real exchange rate, value of food import and agricultural crop GDP were negatively related to cropped area. Significant determinants of cropped area under the during-SAP period included real exchange rate in previous period, and credit allocation to agricultural crops. The former was negatively related to cropped area. The latter was positively related to cropped area. Annual rainfall, real exchange rate in previous period, GDP (crop) and policy regime were significant factors that determined cropped area of the selected crops in Nigeria. Rainfall was positively related to cropped area. Real exchange rate in previous period, real agricultural GDP and SAP policy regime were negatively related to cropped area. The coefficients obtained from the regression results of the cropped area of selected crops pre- and during SAP differed. There was a significant difference in cropped area function between the two periods. The coefficients were heterogeneous. The intercepts were not the same. This difference was due to SAP. The negative sign of the determinants of policy variable implies that cropped area increased more pre-SAP. Annual rainfall, annual capital expenditure on agriculture and value of food imports were significant factors that determined output of the selected crops in Nigeria. Annual rainfall and annual capital expenditure in agriculture were positive determinants of output while annual value of food import was a negative determinant of output of the selected crops. Increase in population and annual rainfall led to increase in cropped area while increase in real exchange rate and value of food import decreased cropped area. Credit allocation to agricultural crops also increased cropped area in Nigeria. Annual rainfall and annual capital expenditure in agriculture increased output in Nigeria while increase in annual value of food import decreased output of the selected crops. Cropped area was not a significant determinant of output. This study concludes that SAP policies decreased aggregate cropped area of major agricultural crops in Nigeria. It is recommended that; policies and programmes be introduced to encourage shift to irrigation agriculture, reduce real exchange rate, and restrict food import.