Rising Food Prices: The Need For Urgent Action -By Abachi Ungbo

It goes without saying that the country is faced with outsized socioeconomic challenges which effectively validates the slew of measures which are coming thick and fast in dealing with the fluid situation. However, some of the measures have been deemed harsh as a result attracting cascade of flak.

The dire situation provides a veritable opportunity for the administration to occupy a pride of place in the annals of the nations history. Clearly, wriggling America out of the great depression of the 1930s has remained the reason for the fond memories that world have of the Franklin Delano Roosevelt’s administration.

The present administration rode on the back of lofty promises to power not least in surmounting the many development challenges and doing things differently in putting the country on the path of progress. Prior to the pandemic, the economy was making a tepid recovery from the oil price shock occasioned by the Saudi Arabia and Russian feud over oil prices.

The potpourri of measures at circumscribing the spread of Coronavirus has placed the economy on the cusp of a cataclysmic fall. The shuttering of businesses, travel restrictions and the attendant salary cuts and huge job losses has led to the dramatic shrinking of economic activities. The citizens are forced to make painful sacrifices in the face of a raft of practically crippling measures by government.
There is no shortage of despair and disorientation as cost of living continued on an upward trajectory with no concomitant rise in the minimum wage. Nothing has proved challenging than the rising food prices. Food inflation stood at 16% in August compared to 15.45% recorded in July 2020.

On month on month basis, the food sub index increased by 1.67% in August 2020 up by 0.15% points from 1.52% recorded in July 2020. The rise in the food index was attributed to increase in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, oils and fats and vegetables. Available reports have indicated that food price inflation will continue an inexorable climb.

We are still dependent on food imports despite the potential to be self sufficient. For instance, wheat which is largely required for noodles, spaghetti and other commonly consumed products is imported. And, oil price has significantly plummeted from about 60 dollars per barrel in December 2019 before making a slow climb to below 40 dollars per barrel presently as a consequence affecting the flow of the much needed foreign exchange.

With the scarcity of the foreign exchange, importers have had to source dollars largely outside official window at extortionate rate thus transferring the cost of production to the consumers.

Since the ban on Maize import which is a commonly consumed cereal came into operation, the measure has continued to dominate public discourse as the prices of the beloved staple of most Nigeria rose significantly. And, the effect has permeated across other products which has Maize as the major raw material.

The grain is commonly consumed in different forms. It is on record that more than 60% of Nigeria maize production is consumed by the industrial sector for flour, malt, cornflakes, starch, syrup, dextrose, livestock feeds. According to the International Institute of Tropical Agriculture (IITA) Maize accounts for 30-50% of low income household expenditures in Africa. Over 30% of the caloric intake of people in Sub-Saharan Africa comes from maize.

Nothing can be disturbing than recent disclosure that Federal Government borrowed 5,000 metric tonnes of grain from the strategic reserves of Economic Community of West Africa States (ECOWAS). Also, disconcerting is the flip-flop on the ban that saw government recently handing waiver to four companies for the importation of 262,000 tonnes of maize which will practically not suffice.

The concern of continued food prices and its attendant crisis is further accentuated by the ravaging effect of floods that have touched several parts of the country severely affecting farmlands of different agricultural produce and displacing not a few people.

A good case in point is the flood that ravaged over 500,000 hectares of farm produce in Kebbi state estimated at 5 billion naira out of which about 450,000 hectares are rice farms. The damages no doubt will affect myriad of smallholder farmers to engage in the dry season farming owing to the fact that for most part they reinvest proceed from wet season farming.

For good measure, the interminable Boko Haram insurgency and equally deadly activities of Bandits has remained an important factor for the dwindling agricultural production and the attendant contribution to food price changes. Obviously, the Northern part of the country is largely the agricultural hub and has been laid prostrate by the insecurity. In the case of maize, according to a Punch Newspaper editorial: North East, North West and North Central contribute 25.43%, 22.9% and 25.88% respectively of the total maize production. The fuel subsidy removal is an extreme measure with seismic ramification on an existing bad situation on account of the significance on the cost of transportation of food across the country.

The soaring food price is a real and present threat to poverty reduction, food and nutrition security of households. It is an emergency situation that requires emergency plans.

The ramping up of agricultural production in attaining food sufficiency is pivotal. The necessity of massive investment in technology, inputs and access to credit should be as a matter of urgency. Seemingly, the country is not bereft of the right policies or approaches.

Endemic corruption remains the primary issue. Plethora of underhanded practices on the channelling of funds and inputs to the end users are well known. Finding corruption- proof protocol in dealing with farmers is also sine qua non and programme such as the Anchor Borrowers Programme(ABP) will need to be reviewed to justify the huge financial expenditure.

ABACHI UNGBO
abachi007@yahoo.com