By Raheem Akingbolu
Stakeholders in the Agricultural value chain have described the current rise in the inflation rate from 13.71 per cent in September to 14.23 per cent in October 2020, as fallout from multiple factors that stiffened the agricultural sector in recent time.
Some of the factors alluded to by the experts are: insurgency in the north -east, border closure, the COVID-19, hike in fuel price and deficiency in infrastructure.
The National Bureau of Statistics (NBS) monthly inflation report released recently had indicated that the rise in the inflation rate was driven mainly by the hike in prices of food items.
The NBS explained that this rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, vegetable, alcoholic and food beverages and oil and fat.
In a related development, the latest edition of the UN News, observed that seven countries, including Nigeria were facing a food security challenge, predicting that they are prone to famine as a result of conflict, economic decline, climate change and the COVID-19 pandemic if adequate measures are not put in place.
The report stated that the United Nations had released $100 million of emergency funding to stave off the risk of famine in seven countries most at risk from a hunger epidemic fueled by conflict, economic decline, climate change and the COVID-19 pandemic.
Head of the UN Office for the Coordination of Humanitarian Affairs, Mark Lowcock, was quoted as saying that $80 million would be split between Afghanistan, Burkina Faso, the Democratic Republic of the Congo, Nigeria, South Sudan and Yemen, which would get the biggest tranche of $30 million
He was also quoted to have stated that a further $20 million had been set aside for Ethiopia, where droughts could worsen an already fragile situation.
Reacting to the NBS report, the Vice President, All Farmers Association of Nigeria (AFAN), Femi Oke, said the hike in price of food items can be attributed to hike in price of fuel and the country’s infrastructural deficiency.
“The inflation is bound to happen if we consider the negative impact of fuel price hike on an average farmer, coupled with the poor state of our roads. I can only appeal to government to fashion out measures to cushion the effect of all these on day-to-day activities of farmers,” Oke said.
Meanwhile, some analysts have also established that the frequent hike in fuel price engineered by the removal of subsidy early March fuelled the country’s inflation rate over the past months.
An analyst and former President of the Experiential Marketing Association of Nigeria (EXMAN), Kayode Olagesin, who also linked the current inflation to multiple factors, built his argument on simple economics theory that Food prices are determined by Demand and Supply.
He said: “The situation we are in is that we are suffering the effect of the prolonged unrest in the north, Covid-19, late rains and border closure.
These three factors combined have significantly impacted agricultural production negatively.
Output is low both in terms of crops and animal husbandry. According to a report I saw earlier in the year, many farmers can’t go to their farms in some part of the Northern Nigeria due to armed banditry or Boko Haram activities.
“Covid-19 lockdown also compounded the issue as farmers down south also had challenges. So also the weather as the rains were very late in coming and contrary to the prediction of a higher volume of rain this year, it was much less.
“Many farmers lost crops due to late rains. The border closure also contributed negatively as produce that used to come from neighboring countries to augment what we produce here as also not been coming in. For those farmers, who are into animal husbandry, they have had challenges with cost of animal feed due to scarcity of corn due to government ban. It is the combination of these factors that is driving food prices up and it will continue,” Olagesin stated.
A farmer and Adviser to a former Ogun State governor on Agriculture, Luqman Noibi, in a recent report on ‘crises in the Poultry feed industry’ also attributed the challenges being faced in the sub-sector to deficiency in raw material and government policy.
According to him, “An essential ingredient in poultry feed like soya cake is now gold, having moved up from N130,000 per tonne last month to N210,000 per tonne this week. This product is produced locally here by Vegetable oil companies.
“I understand Soy seed is available now but this morning I was told the three big players in the industry are currently exporting Soya cake for forex. This probably has affected supply; we can’t even get to buy.
“This price is getting crazy; farmers find it so difficult to transfer the incremental cost to Egg buyers. Farm gate price will be going for a minimum of #1,100 now… It is a serious matter. I’m just downcast,” the farmer stated.
Meanwhile, in a special report by Reuters earlier in the year, the international news platform had painted the various challenges facing a rice farmer, Thomas Tyavwva Maji, from Benue and how reliance on simple farm tools had truncated his dream to take advantage of a surge in prices since the country shut its land borders in August.
According to the report, Maji was planting rice on more of his land in Benue State than ever but he admitted that he could not go much further. With no machinery or irrigation, limited manual labor and no spare cash for fertilizers, the 45-year-old is not expecting any dramatic change in his fortunes.
“We work until we get exhausted, manually we get exhausted,” said Maji,
Reuters had concluded that the constraints Maji faces have bedeviled many rice farmers and millers across Nigeria for years. Despite government measures designed to spur production, farmers in Nigeria get far less from their land than other major rice growers and the West African country is only marginally less reliant on imports.
“That’s a problem for a government that wants to grow all of its own food and boost the country’s agriculture, a sector that accounts for nearly a third of gross domestic product in Africa’s biggest economy When he came to power in 2015, Nigerian President Muhammadu Buhari pledged to help the nation become self-sufficient in rice – once a luxury but now a staple for millions of Nigerians,”
The report further stated that in 2015, Nigeria’s central bank banned the use of its foreign exchange to pay for rice imports and has backed loans of at least 40 billion naira ($130 million) to help small-holders boost output. It also banned rice imports across land borders and kept hefty 70% tariffs on imports coming through ports.
In the recent NBS report, the ”All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 11.14 per cent in October 2020, up by 0.56 per cent when compared with 10.58 per cent recorded in September 2020.
On a month-on-month basis, the core sub-index increased by 1.25 per cent in October 2020. This was up by 0.31 per cent when compared with 0.94 per cent recorded in September 2020.
The highest increases were recorded in prices of Passenger transport by air, Hospital and Medical Services, Passenger transport by road, Pharmaceutical products, Motor cars, Vehicle spare parts, Maintenance and repair of personal transport equipment, hairdressing salons and personal grooming establishments, miscellaneous services relating to the dwelling, Paramedical services and shoes and other footwear.