Climate Change Implications on Oil Palm Production Trends in Nigeria

Climate change had become a focal global environmental concern. Studies on various crops had proved that adverse effects accrue to crop plants from climatic factors variability. This could be in form of increase in temperature, draught, flood or disease epidemics. This study therefore estimated the climate change implications on oil palm production trends in Nigeria from 1981 to 2020 using Johansen cointegration and VECM model. The analysis revealed that ADF shows that at the level all the series data were non-stationary (p-value > 0.05), while at first difference, all variables were all significant at 1% level. AIC and HQC were significant at 5% at an optimal lag three in the model. Johansen cointegration test reveals that Trace test and Lmax test indicates there is only one cointegrating model at the 5% significance level with eigenvalue (0.73); which implies that there is a long-run relationship between Nigeria oil palm production and its climatic factor determinants. The VECM was used to estimates the error correction (EC) which was significant at 1% and 5% respectively in different equations; shows long-run relationships in oil palm production with area of farm, temperature and rainfall. Residuals diagnostics of the estimated VECM using ARCH and autocorrelation indicates that the residuals are homoskedasticity and residuals in the function are not correlated with one another. The study therefore recommended increase in oil palm tree planting; and the trends of climate change and production should be related to stakeholder in oil palm industry