Connect with us
Food Prices Regulation Food Prices Regulation


The Way Forward out of Soaring Food Prices



Ayo Oyoze Baje

This is certainly the worst of times for millions of Nigerians grappling with an increase in Value Added Tax (VAT), electricity tariff and the pump price for fuel.

What about the swirling insecurity incubus, via farmers-herders clashes, banditry and terrorism as well as delayed rainfall courtesy of climate change? That all these have unfolded in the midst of the coronavirus pandemic makes the sordid economic picture darker.

According to Reuters, inflation in Nigeria has hit a four-year peak of 17.33 per cent driven by the COVID pandemic, a drop in oil revenue and a weakened currency. Going by the data released by the National Bureau of Statistics (NBS), food inflation climbed to 20.57 per cent year-on-year in January 2021, making it the highest in over 11 years.

Food prices, which make up the bulk of the inflation basket, rose 21.79 per cent in February, a jump of 1.22 percentage point in January, the National Bureau of Statistics (NBS) stated. Costs increased by 2 per cent in the month. What all these frightening figures tell us is that there is acute hunger in the land!

The serious worry, however, is that the light at the end of the dark tunnel of insecurity is still far away, according to experts on the economy.

For instance, Jacques Nel, head of macroeconomic research at NKC African Economics in South Africa insists that: “Straining households will be compounded by increasing reports of insecurity in some regions, fuelling the risk of broader social discontent.”

He added that just 30.6 million Nigerians in a population of around 210 million were considered fully employed.

Similarly, Bismarck Rewane, managing director at Lagos-based Financial Derivatives, said the “stagflation crisis” would take a long time to resolve, with inflation eating up economic gains to the point where any government stimulus might be too weak to generate jobs.

On his piece of advice to policymakers on the economy and the Central Bank of Nigeria (CBN), he stated that: “They should be thinking of tightening to encourage savings and investment which could help employment but I think we may have reached the limit of [what can be achieved with changes to] monetary policy.”

So, what is the way forward, if not agriculture, that is renewable and generally less costly to venture into?

But then, such agricultural practices have to be driven by the availability of fertile land, modern technological practices, sustained human capital development features, as well as genuine interest from the public and the private sectors.

These could be done through guaranteed socio-economic security for the farmers and access to adequate funding through single-digit interest bank loans spread over a long period of time.

Also needed are the supply of steady electric power, potable water and technical support with tillers, harvesters and pesticides.

Others include the provision of early-maturing, disease-resistant hybrid seedlings with greater harvest potentials.

Even then the farmers require the input of agric extension workers with the requisite professional knowledge. In fact, they could assist them to form cooperatives.

One other significant factor that could facilitate success in the agric sector is proper planning that would be predicated on a creditable database. Such data could be on the number of registered farmers as per the type of farming practices they are engaged in on a zonal basis, funds required to catalyse their production and access to available markets.

All these would assist the policymakers and those who implement them to focus on areas of comparative advantage, as the current President of the African Development Bank (AfDB), Dr Adewnmi Adesina, once did. That was while he was the Minister of Agriculture and Rural Development under the Dr Goodluck Jonathan-led administration.

Moving forward, we have to learn valuable lessons from the mistakes of the past.

For instance, as at political independence in 1960, agriculture accounted for 68 per cent of the nation’s Gross Domestic Product (GDP). It employed 70 per cent of the labour force, especially in rural areas. It provided not only food but generated employment and contributed 38 per cent of the non-oil foreign exchange earnings.

Indeed, the first national development plan, after independence (1962-1968) was anchored on agriculture. Within that period, over 80 per cent of total export earnings came from the sector as gotten from cocoa, cotton, castor, cowhide, oil palm nuts and rubber.

But how much of these products do we produce locally and how much do we export as of today? The answer is obvious.

With true fiscal federalism firmly in place back then, the Chief Obafemi Awolowo-led Western Region (now defunct) funded the laudable Free Education Policy.

The Cocoa House remains a great testament and symbol of the power of home-grown agriculture. But what do we have these days? A military government-imposed centralized structure, backed by the 1999 Constitution (as Amended) controlling resources (agriculture, education, healthcare delivery) that should ordinarily belong to the states or federating units.

We joyfully allow for exports of our raw agricultural products (cashew nuts, cocoa, coffee, yam, cocoyam, cassava, ginger, garlic, oranges, mangos) only to buy the processed forms at exorbitant rates! That is just like we do with our crude oil.

Sadly, we erroneously focus our attention on borrowing billions of Naira from the same countries that should be begging us for loans!

Perhaps, the German national who recently stated Nigeria holds the key to the global economic feats of the near future certainly knows his onions. With a vast landmass of 923,720 sq/km, a water area of 13,000 sq/km, an annual rainfall of between 250mm (North) and 300mm (South), a clement climate blessed with abundant sunshine, the Rivers Niger and Benue as well as their tributaries and the vast Atlantic Ocean to the South, why not?

The answer, of course, lies with the missing leadership factor. The ones we have had gave us policy flip-flops on agriculture, ranging from the National Accelerated Food Production Programme (NAFPP, 1972), through the Operation Feed the Nation (OFN), the Green Revolution (GR) before the springing up of the River Basin Authorities.

After that came the Agric Banks and eventually the Directorate of Foods, Roads and Rural Infrastructure (DFRII) during the famed IBB era. But all refused to put food on the common man’s table. And so did the high-sounding NAPEP and NEEDS that could hardly identify, not to talk about meeting our daily needs.

It was, therefore, not surprising that the food importation issue metamorphosed from the Rice Armada during the Alhaji Shehu Shagari tenure in the ‘80s to Nigeria becoming the highest importer of fish in 2005, spending some staggering N50 billion on fish annually.

Still, on the importation, it jumped from N3.47 billion in 1990 to N113.63 billion in 2002. Between 1981 and 2019, it recorded N217.76 billion, according to Trading Economics Report.

The piece of good news is that Nigeria has become Africa’s largest producer of rice under the current Buhari-led administration. But rice is not the only food we eat or should concentrate on.

According to Cleaver and Shoebar (1994), Nigeria lacks the requisite knowledge in food processing, preservation and packaging. This has led to post-harvest losses ranging from 25 per cent to 40 per cent and something urgent needs to be done to reverse the drift.

Currently, we need modern agricultural practices to succeed. But let it be made a way of life. Let the study of the subject be made more attractive; right from the primary school level up to the university stage. Governments and the private sector should collaborate to wage a concerted war against Climate Change, terrorism and all forms of insecurity. Farmers should be registered and trained through well-paid farm extension instructors.

Click to comment

Leave a Reply

The blockchain brings new financing options to the business market. For example, Bitcoin Cash casino has adapted to only using cryptocurrency. This way, it makes it easier for their customers to deposit and withdraw in a BCH casino. Entrepreneurs have taken note of this and are looking to invest more in crypto than in fiat markets.

Like Our Facebook Page

Latest News on Business Post


%d bloggers like this: