A Dynamic General Equilibrium Analysis of Agricultural Policy Shocks and Sectoral Welfare Distribution in Nigeria

Agricultural policy interventions in Nigeria, including fertiliser subsidy reforms, import tariff adjustments, and land tenure changes, generate economy-wide effects that extend beyond the farm sector through factor market linkages, consumer price channels, and government budget interactions. Existing partial equilibrium analyses of Nigerian agricultural policy fail to capture these inter-sectoral feedback mechanisms, leaving policymakers with incomplete evidence for welfare assessment. This study constructs and applies a dynamic computable general equilibrium model calibrated to Nigeria's national social accounting matrix to simulate the economy-wide welfare effects of major agricultural policy scenarios. The model incorporates a detailed farm sector disaggregated by production system and agro-ecological zone, capturing heterogeneous farm household types across the six geopolitical zones. Policy scenarios simulated include full fertiliser subsidy removal, a 25 percent increase in rice import tariffs, and a formalised land tenure registration programme affecting agricultural land markets. Welfare decomposition follows the standard equivalent variation approach. Results indicate that fertiliser subsidy removal generates aggregate welfare gains through improved fiscal space but imposes significant losses on food-insecure rural households in the North West and North East zones. Rice import tariff increases generate farm income gains concentrated in North Central and South South irrigated rice zones at the cost of net consumer welfare losses in urban South West areas. Land tenure formalisation generates the largest long-run welfare gains through improved investment incentives. The study contributes a novel dynamic multi-zone general equilibrium framework for Nigerian agricultural policy analysis. Keywords: computable general equilibrium, agricultural policy, welfare distribution, Nigeria, social accounting matrix