Of Agricultural Policy and Skyrocketing Food Prices

Food prices have continued to hit the roof despite the federal government’s renewed sectorial policy direction to consolidate previous agricultural development policies. Gilbert Ekugbe writes

The Federal Ministry of Agriculture and Rural Development (FMARD) conceived the National Agriculture Technology and Innovation Policy (NATIP) (2022-2027) as approved by the Federal Executive Council (FEC), over a year ago. However, food prices have continued to soar out of the reach of impoverished Nigerians.

The five year policy strategy, according to FMARD, is a renewed sectorial policy direction that would consolidate the successes recorded in the implementation of the previous agricultural development policies. It is also intended to reposition the National Agricultural Research System, holistic mechanisation drive, provision of rural infrastructure, standardisation of inputs and processing systems and techniques; development of commodity value chain through clusters and special agro-processing zones.

Sadly, not much has been achieved in these directions since the policy strategy was established.

Although, a new government is at the helm, stakeholders are expecting to see the political will needed to make the NATIP a success.

President Bola Tinubu in his address on the state of the nation is planning to invest N200billion in the cultivation of rice, maize, wheat and cassava to ensure that prices of food items remain affordable and stable.

According to him, his administration has planned to support the cultivation of 500,000 hectares of farmland while its all-year-round farming practice remains on course.

“To further ensure that prices of food items remain affordable, we have had a multi-stakeholder engagement with various farmers’ associations and operators within the agricultural value chain,” he assured.

He also stated that in the short and immediate terms, the federal government would ensure staple foods are available and affordable, explaining that his administration has ordered the release of 200,000 metric tonnes of grains from strategic reserves to households across the 36 states and FCT to moderate prices.

According to the National Bureau of Statistics (NBS), the cost of food in Nigeria increased 25.25 per cent year-on-year in June of 2023, the highest since September of 2005, led by prices for oil and fat, bread and cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetable, milk, cheese, and eggs.

Recently, the Nigerian government has declared a state of emergency to tackle rising food prices and shortages. Some of the initiatives included providing farmers with fertilisers and seeds to mitigate the effects of subsidy removal and create a strategic food reserve to be used as a price stabilisation mechanism for cereals and other foodstuffs.

For instance, the prices of staple food have increased astronomically despite the dwindling disposable incomes. After a survey across different markets in Lagos, a bag of rice which sold for N30,000 has increased to N40,000 depending on the region, a 50kg bag of beans that cost N30,000 to N38,000 in November last year has now risen to N40,000 to N50,000, a small basket of tomatoes which used to sell for N6000 in March 2023, now goes for N16,000.

Although, THISDAY had reported that the Agricultural Produce Sellers Association of Nigeria (APSAN) blamed the rising cost of food prices on multiplicity of taxes.

The National President of APSAN, Mr. Aloys Akortsaha, had stated that over ten regulatory agencies collect tax on a single commodity as the cost would therefore be passed to Nigerian consumers.

“The major issue causing food inflation now is the multiplicity of taxes being faced by APSAN. People have been asking questions about the rise in food prices on a daily basis. We are faced by multiple taxes from different government regulatory agencies on a single commodity. You will find out that taxes are being paid on one commodity to different tax authorities in a state,” he lamented.

Similarly, the National President of All Farmers Association of Nigeria (AFAN), Mr. Kabir Ibrahim, explained that the skyrocketing price situation in the country is a catch 22 now because government cannot buy from the open market as such action will exacerbate the current inflation tide.

“We cannot also import grains as every country is facing the same crisis as a result of Russia and Ukraine who are at war with each other,” he said.

He, therefore, called on the federal government to support and encourage farmers to scale their productivity levels to produce all year round instead of adopting a wet season production.

“The only option open to us is to scale our productivity and produce all year round instead of doing wet season production. I see a closely monitored and periodically implementation of the recently declared emergency on food security becoming the required game changer,” he averred.

Responding to a question about his projections in terms of food supply in the second half of the year, the AFAN boss expressed worries, predicting no remarkable departure from the current situation in the second half of the year, but expressed hope going forward that with the proper implementation of the state of emergency, Nigeria would begin to witness a remarkable improvement in Nigeria’s food system which has the potential of leading to the attainment of food sufficiency, lowered food prices or reduced inflation rate.

Advising the Tinubu-led administration on NATIP, he called for a transparent and judicious implementation of NATIP to avoid policy inconsistency that is capable of eroding all the gains made by the previous administration.

On his part, the Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said Nigeria’s food production capacity has not been growing in the past few years owing to insecurity in the country, advising that to tackle the rising food prices in the country, the government must take the bull by the horn to address the insecurity situation in the country.

Yusuf said the government needs to grant import waivers to food processing companies in the wheat value chain to reduce their landing costs, thus reducing the prices of the derivatives.

He also called on the government to address the high cost of transportation to reduce food prices.

“A litre of diesel is above N800 and this has doubled the cost of food transportation and it is affecting commodity prices,” he said.

It is important to note that achieving complete price stability is challenging due to various factors such as market dynamics and external influences. However, implementing these measures can help minimize price fluctuations and create a more stable food market.

The federal government can implement fiscal policies to maintain price stability. This can include measures such as subsidies or price controls to regulate the prices of essential food items.

The Central Bank of Nigeria (CBN) can also play a role in ensuring price stability through monetary policy by adjusting interest rates and money supply to control inflation and prevent excessive price fluctuations. It has been re-emphasised that the federal governments and policymakers must invest in agricultural infrastructure, research, and development to increase food production and stabilise prices.

This can involve improving irrigation systems, providing farmers with access to modern technology and training, and promoting sustainable farming practices

There is also an urgent need for timely and accurate data on food production, supply, and demand that would help identify potential price fluctuations and allow for proactive measures to stabilise prices. Governments can establish systems to monitor and regulate food markets to ensure fair competition and prevent price manipulation.