Political Economy of Agricultural Subsidy Design in Nigeria: Rent-Seeking, Targeting Efficiency, and Reform Pathways

Agricultural subsidies in Nigeria consume a significant share of public agricultural expenditure yet frequently fail to reach their intended beneficiaries due to elite capture, administrative inefficiency, and politically motivated targeting distortions. Understanding the political economy of subsidy design and implementation is a precondition for designing reforms that are both technically sound and politically feasible. This study investigates the political economy of agricultural subsidy design in Nigeria using a mixed-methods analytical framework combining game theory modelling of interest group interaction with quantitative empirical analysis of subsidy distribution data and qualitative political economy assessments. The theoretical model formalises rent-seeking competition among farmer organisations, agro-input firms, and bureaucratic actors over subsidy allocation, generating predictions about capture probability as a function of group organisational capacity and programme design features. Empirical analysis uses subsidy beneficiary data from five states across the North Central, South East, and North West zones to estimate targeting efficiency ratios and identify correlates of capture. Qualitative evidence from key informant interviews with programme administrators, farmer leaders, and state agriculture ministry officials is integrated using structured qualitative comparative analysis. Results confirm systematic targeting failures driven by intermediary capture and political patronage allocation in all five states. Programme design features associated with lower capture rates include beneficiary biometric registration, independent monitoring, and transparent public benefit registries. The study makes a theoretical contribution by formalising the endogenous relationship between subsidy design choices and rent-seeking incentives in the Nigerian agricultural policy context. Keywords: agricultural subsidy, political economy, rent-seeking, targeting efficiency, Nigeria