Addressing oil spillages and agricultural productivity. Evidence of pollution in Nigeria

This paper examines how the pollution generated by oil operations in Nigeria can affect agricultural total factor productivity. I analyze oil spillages, which constitute the major ecological disaster in Nigeria, leading to large environmental, economic and social problems. Following a consumer-producer household framework, and applying a difference-and-difference approach, I estimate an agricultural production function. I find that farmers located in less than 10 kilometers from oil spills experiment a relative reduction in total factor productivity of around 2.73\%. I also examine alternative mechanisms, and I find that oil spills pollution may explain my results. I also detect less owner property land and a drop in the labour income in urban areas close to oil spills, that could also be explained by a decrease in the labour productivity component. This article highlights an externality through which oil industry affects the living conditions of rural areas and the importance of clean up aspects in areas close to oil spillages