In Nigeria, a sharp rise in the market price of staple food crops often fails to trigger an immediate, significant increase in total harvest supplied to urban markets. Which of the following structural problems in the agricultural sector is primarily responsible for this short-run supply inelasticity?
- Poor rural transport infrastructure and inadequate post-harvest storage facilitiesAnswer
- BThe prioritization of domestic market protection under import substitution industrialization policies
- CThe complete privatization and transfer of public agricultural assets to private enterprise owners
- DAn outward shift of the agricultural production possibility curve driven by technological improvements
Answer
Poor rural transport infrastructure and inadequate post-harvest storage facilities primarily cause short-run agricultural supply inelasticity in Nigeria.
The supply of agricultural produce is naturally inelastic in the short run due to biological growth cycles. In Nigeria, this inelasticity is exacerbated by severe structural bottlenecks, particularly poor rural feeder roads and insufficient storage facilities (such as grain silos and cold storage). Even when prices rise, farmers cannot immediately move remote crops to market or release stored surpluses without high spoilage rates.
Step-by-Step Solution
Key Concept
Structural Problems in Nigerian Agriculture: Supply Inelasticity and Infrastructure Constraints