European Union Agricultural Subsidies and Their Competitive Effects on Smallholder Farmers in North-West Nigeria

This study analytically examines the competitive effects of European Union agricultural subsidies, particularly those operating through the Common Agricultural Policy (CAP), on smallholder farmers in North-West Nigeria, focusing on cereal and dairy commodity markets where subsidised EU products compete with Nigerian domestic production. EU agricultural subsidies have long been criticised for distorting global commodity markets and disadvantaging African farmers, yet empirical evidence on the specific effects for Nigerian smallholders remains limited. This analytical study employs a partial equilibrium trade model to simulate the impact of EU CAP subsidy levels on Nigerian market prices for wheat, rice, and powdered milk, using commodity trade flow data from the Food and Agriculture Organisation (FAO) and USDA for the period 2019 to 2024. The model results are contextualised through focus group discussions with smallholder farmers and commodity traders in Kano, Zamfara, and Sokoto States in the North-West zone. The study also analyses whether African Growth and Opportunity Act (AGOA) and EU preference arrangements partially offset competitive disadvantages for Nigerian farmers. Findings fill an empirical gap in the literature on EU agricultural policy spillover effects on Nigerian food economy actors, generating evidence for Nigerian trade policy advocacy at WTO agricultural negotiations. Keywords: EU agricultural subsidies, CAP, smallholder farmers, North-West Nigeria, commodity market distortion.