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Price of food items will continue to trend upwards — Isemede, ex-NACCIMA DG

By - - [ General ]

…Says Nigeria on the brink of damaging food crisis

By Tunde Oso

A former Director-General of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) Dr. John Isemede, in this interview, speaks on the current food insecurity in Nigeria. Isemede, a United Nations Industrial Development Organization (UNIDO) consultant, proffers likely solutions.

Food situation

The situation is very bad. According to the selected food price watch data for August 2020 released by the National Bureau of Statistics (NBS), major consumer staples showed substantial increases between August 2019 (when the land border closure took effect) and August 2020. The steep price increases across the food items is consistent with the increase in food inflation from 13.17% in August 2019 to 16.0% in August 2020.

Of more concern is the fact that rice, the most widely consumed food staple among consumers showed substantial increase in the two variants; local sold loose (up 37.5% y/y) and imported high quality sold loose (up 40.7% y/y).

In my view, the predominant factor behind the surge in the prices of major food items is the closure of the land borders, which has been exacerbated by administrative controls employed by the monetary and fiscal authorities in rationing foreign exchange. I recall that in July, the Central Bank of Nigeria ,CBN, included maize on the list of items ineligible for forex from official sources. Recently, President Muhammadu Buhari ordered the Central Bank of Nigeria (CBN) not to allocate foreign exchange to importers of food and fertilizer. The heavy rainfalls in the north western part of the country have also affected farmlands, as the head of Kebbi State branch of the Rice Farmers Association of Nigeria revealed that about 90% of the two million tons of rice to be harvested were destroyed.

Protectionist measures

The persistent increase in the prices of food items despite the protectionist measures implemented by government suggests that local production still lags consumption significantly. Considering the weak harvest season due to the impact of the global pandemic amidst higher distribution costs linked to higher petrol prices following the deregulation of the downstream sector, we believe price of food items will continue to trend upwards. Additionally, we expect the pass-through impact of the devaluation in the local currency to put further pressure on imported food inflation.

Security-wise, recently, in Zabarmari village in Borno State, over sixty people in were slaughtered like animals. The security situation has also deteriorated to the extent that bandits are openly giving the inhabitants of some villages the option of paying taxes if they truly want to engage their farmlands, in their own “villages.” Achieving food security has been one of the main objectives of President Muhammadu Buhari. Also, northern Nigeria’s main pride is farming. But today, many farmers in some vast sections of northern Nigeria are afraid of visiting their farmlands, for fear of losing their lives. Agriculture is now decaying, by implication, due to lack of security. This has therefore affected food output.

Food crisis

Going forward, Federal Government really needs to genuinely embrace the 2003 Maputo Declaration and increase annual national budgetary allocations for agriculture to at least 10% and to ensure growth of the agricultural output of at least 6 % annually, if it wants to really diversify into agriculture away from oil as the main revenue earner.

Because we don’t have sufficient local production of some key food Nigerians consume, it should review the protectionist measures in place to avert a food crisis.

We are currently dealing with the twin crises, record-breaking flooding, and a food shortage. According to Reuters, this is threatening to push Africa’s most populous country into a devastating food crisis. In 2020, Nigeria has dealt with destructive floods that have killed at least 40 and have displaced over 15,000 people. Recently, in September of 2020, intense flooding caused by heavy rainfall in northern Nigeria destroyed thousands of homes and wide areas of crops. As reported by Reuters, the flooding in northern Nigeria has destroyed 90% of the two million tons of rice that was expected to be harvested this autumn. This loss is equivalent to 20% of the rice that Nigeria harvested last year.

Rice paddies

Destruction of rice paddies is not the only food-related casualty of these floods. A shortage of maize has made it extremely difficult for chicken farmers to feed their flocks due to the price of chicken feed more than doubling. For Nigeria, rice is the staple grain, and chicken is a core protein. Furthermore, the COVID-19 pandemic caused many movement restrictions and financing difficulties that complicated the spring planting of many crops including maize. The combination of crop-destroying floods and an already existent maize shortage makes it real that Nigeria is on the brink of a damaging food crisis.

Fertilizer subsidy

The Buhari government abolished fertiliser subsidy programme and replaced it with the Presidential Fertiliser Initiative (PFI). Government still has a long way to improving agricultural productivity. It is not the only missing piece. It is not advisable to apply fertiliser using blanket recommendations. In a system that is highly susceptible to climate change and droughts, only one percent of croplands are currently irrigated in Nigeria. In this kind of condition, no amount of fertiliser applied would translate into high-grade yield if water remains missing in the farming equation.

Consider the issue of agricultural extension agents. These are the individuals who work with farmers to overcome their challenges by adopting new technology. They are vital in teaching farmers how and when to use the fertilisers suitable for their crop/land. Nigeria currently has only 7,000 extension agents for its 16 million farms – an obvious gap. Contrast this with Ethiopia, which has agents that reach 70% of its farm households.

Government’s recent announcement of training 50,000 more extension agents is coming at the right time. Efforts must be made however to connect extension workers with research institutions to ease technology transfer to farmers.

As with all government policies and programmes, monitoring and implementation are important. The PFI is a good starting point to boost fertiliser use and transform Nigeria’s agriculture. However, this is not the only leg in the race. Tailored fertilisers use, irrigation, extension and technology adoption are equally important for the sector to reach its full potential.

Through all of this, Nigerian government is still doing everything it can to promote domestic food production and local Nigerian farmers, but that may not be enough to sustain a country of nearly 200 million people through a looming food crisis.

Vanguard News Nigeria

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