In developing countries, a large share of the population is involved in agriculture, and policies encouraging households to grow their own food have a long history. Given the rapid expansion of food markets in developing countries, this paper revisits the value of such policies. With due recognition of Africa’s rapidly expanding urban population and concerns about urban food security, we consider both rural and urban households. We apply panel data methods to a nationally representative data set from Nigeria to account for time-invariant unobserved characteristics that could jointly determine food production and dietary diversity. We find that households producing a greater share of their own food have lower dietary diversity scores, compared to households that buy all their food, especially for rural dwellers. This finding reflects the reality that households are usually limited in the set of food items that they can produce. With improved access to markets and non-farm income, households do not need to produce all of their own food to improve dietary diversity. Thus, our results indicate the need to revisit policies encouraging undue focus on own production of food.