‘Why Food Prices May Not Fall Despite Harvest’

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James Emejo in Abuja 

There are indications that expectations that the good harvest season recently experienced by farmers may not lead to a fall in food prices.

There had been repeated assurances by some stakeholders and government officials that the impact of the continued closure of the country’s land borders to curtail dumping and smuggling, which had resulted in increases in the prices of food items, would be ameliorated with the arrival of the harvest season.

The border closure had created a demand-supply gap which needed to be met by local production, effectively shooting up the prices of basic commodities, particularly rice. 

But THISDAY findings revealed that some grain farmers, even after bumper harvest, have decided not to sell their produce, hoping that food prices would further appreciate so they can make more money from their investments. 

Notably, the Consumer Price Index (CPI) which measures inflation increased to 11.98 percent (year-on-year) in December compared to 11.85 per cent in the preceding month, according to the National Bureau of Statistics (NBS).

Food inflation rose to 14.67 per cent in December compared to 14.48 per cent in November. 

According to the CPI figures for December which was released yesterday by the statistical agency, core inflation, which excludes the prices of volatile agricultural produce also increased to 9.33 per cent compared to 8.99 per cent in the preceding month.

In July last year, the President of the Rice Farmers Association of Nigeria (RIFAN), Alhaji Aminu Goronyo, had expressed optimism that the bumper harvest expected by farmers across the country will help weigh down on prices of rice in particular, amidst the rising commodity prices occasioned by the closure of the borders.  

The situation had continued to further exert pressure on the headline index as the Consumer Price Index (CPI) which measures inflation rose to 11.85 per cent (year-on-year) in November, largely fuelled by food inflation which rose to 14.48 per cent from 14.09 per cent in the preceding month.

However, speaking in a telephone chat with THISDAY, Chairperson of the Association for Small Scale Agro Producers in Nigeria (ASSAPIN), Bauchi State Chapter, Hajiya Amina Bala Jubril, said the assurances on a possible reduction in food prices may be political as the forces of demand and supply were paramount.

Responding to an enquiry on why prices have remained high despite a bumper harvest, she said: “You want the prices to crash? But we don’t want the prices to crash because we laboured for it. 

“Let me tell you something, even with the bumper harvest, we invested; so because there’s a bumper harvest, you don’t expect the farmer to throw away his produce, no. 

“The farmer should make profit and somehow, it is not the issue of closure of the border of what?  

“The issue is how much did the farmer invest and that’s what is the determinant of price. So, saying the price would crash is maybe saying it to console the citizens because of the high prices of food items.

“The government cannot come and make me bring out my produce and start selling it at a cheaper rate,” adding that “the price of local rice is still cheaper than the imported rice”, nevertheless.

Also, the National President, All Farmers Association of Nigeria (AFAN), Mr. Kabiru Ibrahim told THISDAY that the increases in commodity prices despite a good harvest season was largely due to the impact of the continued border closure which had caused a supply gap. 

He said: “We are now facing a serious threat from our neighbours who are not cooperating and our borders are closed. And since these things (commodities) are not here as they used to be, definitely there will be pressure on what we have internally and that could cause price turbulence. 

“It is a phase that we have to pass through but I believe that it will be alright and it is a question of time: just a little patience in our part, we will get to the promised land because more people are getting into agriculture, and we are scaling up our production and things will get better I believe in due course.”