Effects of Fuel Subsidy Removal on Price of Selected Agricultural Products on Delta State, Nigeria

This study examines the effects of removing government fuel subsidies on the prices of selected agricultural commodities, specifically plantain and palm oil, in Delta State, Nigeria. It responds to growing concerns about the implications of subsidy removal for economic stability, agricultural production, marketing costs, and household welfare. A multistage sampling technique was employed to select 270 respondents comprising producers and consumers across the commodities studied. Primary data were collected using structured questionnaires and analyzed using descriptive statistics, paired sample t-test, and multiple regression analysis. The findings revealed that most respondents were female, married, economically active, possessed at least secondary education, and resided in rural communities. Regression results indicated that transportation costs, fuel price levels, and input costs significantly influenced commodity prices, with palm oil being the most affected, followed by garri, while plantain was the least affected. Paired sample t-test results showed statistically significant increases in prices of all commodities following subsidy removal. Key constraints identified include rising transportation costs, increased input prices, reduced household disposable income, and inflationary pressures. The study confirms that subsidy removal has adverse effects on agriculture through increased production costs, higher food prices, and declining household welfare. It recommends targeted palliatives, input subsidies, and improved transportation infrastructure to mitigate these effects and enhance food security and economic stability. These findings underscore the urgency for policy interventions that balance fiscal reforms with social protection measures, ensuring that vulnerable populations, rural farmers and income households, are shielded from the disproportionate burdens of fuel subsidy removal in Nigeria.