Food price instability is a frequent forerunner of macroeconomic shocks and political turmoil that can discourage long-run investment and curtail growth. There is a general shortage in the domestic supply of food grains in Nigeria; this has often resulted in increased market prices of the commodities, thus leading to change in the prices of rice overtime.The main thrust of this study is to unveil the effect of price variation on production of rice in Nigeria. This study employed time series data of a period of 42years. The following recommendations were made: The government should stabilize the quantity of rice produced in the country; more effort should be given to production of rice considering its relevance to food security. The Cobweb theory can Be used by the government to regulate the response of price to rice production.