Global food price shocks and supply responses of staple crops in Nigeria

Global food price shocks (volatility) is an important issue of national and international concern that is attracting debates among development economist; yet is understudied. This study analyzed the effects of global food price shocks on the supply response of Nigerian maize, rice, and wheat. Monthly time-series data from 1981–2023 were collected and analyzed for the study. A weighted FAO-based global food price index was constructed, while Johansen cointegration, Vector Error Correction Model (VECM), and Autoregressive Distributed Lag (ARDL) techniques were employed. The results showed that all variables were integrated of order one and cointegrated, confirming stable long-run relationships. In the short run, global food price shocks significantly increased farmers’ supply response (β = 0.165, p < 0.01), while farm size also had a positive effect (β = 0.119, p < 0.01); the error correction term (−0.487, p < 0.01) indicated that about 49% of disequilibrium was corrected within one period. In the long run, global food price shocks positively affected output of maize (β = 0.165), rice (β = 0.129), and wheat (β = 0.077), whereas rainfall and temperature exerted negative and significant effects across all crops. The study recommended strengthening climate-resilient agricultural investments to complement price-based incentives and enhance staple food production in Nigeria.