The Economic Impact of Fuel Subsidy Removal on Agricultural Production in NIGERIA

Abstract

Abstract The study evaluated how Nigerian agriculture production might be affected by the elimination of fuel subsidies. Two distinct goals served as the study's compass as 240 farmers were given standardized questionnaires to complete in order to gather data. To choose the respondents, a multistage stage random sampling approach was employed. Data analysis was done using the logit regression model and descriptive statistics. The findings showed that young people between the ages of 20 and 29 (64.2%) dominated the agricultural field as full-time farmers (82.5%). These individuals are primarily married (52.5%), male (50.0%), and have families of one to ten members 90.0% of the time. The majority of them (80.9%) had access to formal education, 61.7% had between one and twenty years of farming experience, and 70.8% earned between N201,000 and N400,000 annually from their farms. The results also showed that the elimination of fuel subsidies has led to higher transportation costs, high labor costs on farms, higher planting material costs, insufficient transit options, wider income disparity, and a decline in farm produce sales in Nigeria. The independent variables included in the model may account for about 27.5% of the variance in agricultural production, according to the results of the logistic regression, which indicated an R2 value of 0.275. Therefore, it is recommended that careful research be prioritized before enacting policies such as the removal of fuel subsidies, and that a gradual transition be used to minimize the impact on individuals' livelihoods.