Political Economy of Agricultural Subsidies in Nigeria: Capture, Targeting, and Reform

This study applies political economy theory to analyse the design, implementation, and reform of agricultural subsidy programmes in Nigeria, examining how political incentives shape subsidy targeting outcomes and constrain reform. Agricultural subsidies, particularly for fertiliser, seeds, and fuel, represent a major component of Nigeria's agricultural public expenditure but are widely documented to suffer from elite capture, poor targeting, and fiscal unsustainability. Understanding the political economy forces that drive subsidy design and implementation is essential for designing politically feasible and effective reform strategies. This study applies a political economy analytical framework drawing on distributive politics theory, rent-seeking models, and public choice analysis to the Nigerian agricultural subsidy context. Empirical evidence is generated from an original dataset combining subsidy programme administrative records, legislative debate transcripts, budget allocation data from 2005 to 2023, and interviews with 50 policymakers, civil society leaders, and agricultural economists with subsidy programme experience. Quantitative analysis uses mixed logit models to identify political determinants of subsidy allocation patterns. Findings reveal systematic evidence of politically motivated subsidy allocation, with subsidy distribution significantly correlated with electoral competition patterns, ruling party state affiliation, and agricultural ministry political connections rather than farmer need indicators. Reform attempts have consistently failed when they threatened politically connected beneficiary groups. The study contributes an original political economy model of Nigerian agricultural subsidies and recommends evidence-based coalition-building strategies for politically feasible subsidy reform.

Keywords: political economy, agricultural subsidies, Nigeria, subsidy reform, elite capture.