When sellers become buyers: Food inflation, seasonal market position, and smallholder food insecurity in Nigeria

Divine-Love Akam

No 404640, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: When food prices rise, theory predicts agricultural producers as price beneficiaries. Nigeria’s 2023 fuel subsidy removal, which pushed inflation to a three-decade high of 40.87%, contradicts this prediction when high food and input prices coincide. Tracking agricultural households across lean and harvest seasons using nationally representative LSMS-ISA data and a continuous treatment difference-in-differences design, I classify households into four seasonal net market position groups and find that 38.3% switch market positions within the same agricultural year. Contrary to the standard agricultural household model, persistent sellers who are net sellers in both seasons experienced the largest food security deterioration, 1.0, 0.9, and 0.6, HFIAS points worse than strategic switchers, persistent buyers, and subsistence switchers, respectively, during the lean season when rising input costs reduced planting investment before harvest revenues are realized, and the selling-incentive trap forced sellers back into food markets at high prices. Season-specific estimates show that pooling lean and harvest effects conceals this vulnerability pattern. The findings suggest that classification based on annual net market position misidentifies the group bearing the largest welfare burden and risk undermining the production incentives of smallholders central to national food security.

Keywords: International; Development (search for similar items in EconPapers)
Pages: 76
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404640

DOI: 10.22004/ag.econ.404640

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