This study adopted the concept of marketed surplus to establish output supply response of paddy rice to input and output prices using cross sectional panel data produced by NBS in 2012/2013 and 2017/2018 later referred to in this report as period I and II respectively. A Tobit regression was performed on a semi-log functional form and the supply response elasticities estimated as products of coefficient of the marginal effect of Tobit and changes in input and output prices. Results indicated the dominance of Northern zones in paddy production but a declining trend between the two periods. Intra-household use of critical inputs also revealed declining trend in fertilizer use and irrigation, fall in area harvested, decline in output and price but increase in marketed surplus. Major determinants of supply response are farm gate price, output (harvested) and use of irrigation. Effect of policy reform was weak and supply response with respect to own price was inelastic (-0.29) and negative suggesting low quality of paddy rice. Supply response was also inelastic with respect to fertilizer price and agricultural labour wage rate. Efforts at boosting domestic supply of rice in Nigeria will require output price support policy in the form of warehouse receipt.

Keywords: Policy Reform, Supply Response, Paddy Rice, Market Surplus, Elasticities