Crude oil price shocks frequently compel government to modify domestic prices of energy. This study analysed the effects of crude oil price shocks on food production outputs using a Nonlinear Autoregressive Distributed Lags (NARDL) model. The bounds test of the NARDL specification suggests the presence of cointegration among the variables, which include the oil price, food production outputs (for maize, rice, sorghum, wheat, cassava and yam) and real agricultural GDP proxy as national income.

more »

... e estimated NARDL model affirms the presence of irregularities in the food production output behaviour. In the long-run, there is a significant relation between oil price increases and food production output in all cases while food production outputs responded positively to a negative change in the prices of oil. However, in the short-run, a positive change (unexpected decrease) in the price of oil exhibited a positive effect on food output in all cases and negative changes (unexpected rise) in price of oil revealed a negative effect (decrease) on the significant food outputs. With the presence of significant influence of oil price shock on the food production output both in the long-run and in the shortrun, there is need for long-term agricultural policies to protect economies from any global food shortage that may result from oil price changes.