By Kenechukwu Aguolu, FCA, PMP, CBAP
According to the National Bureau of Statistics, the food inflation rate for June was 40.87 percent on a year-on-year basis and 2.55 percent on a month-on-month basis. However, some people believe that the food inflation rates are higher. The hike in food prices has made feeding a herculean task for many Nigerians. On that note, President Bola Ahmed Tinubu’s approval of the suspension of duties, tariffs, and taxes for the importation of certain food commodities including husked brown rice, wheat, maize, and cowpeas through land and sea for 150 days and the proposed importation of 250,000 metric tonnes of wheat and maize respectively by the Federal Government is in the country’s best interest. No responsible government will sit and watch its citizens starve. The President has reiterated his administration’s commitment to drive local food production. Food sufficiency is a gradual process.
The cost of food production has hiked as a result of the devaluation of the naira and the removal of the fuel subsidy. For example, the cost of fertiliser, seedlings, and operating machines like tractors has risen. Also, the cost of transporting and distributing food items to their point of sale has also increased for the same reasons. All these increased costs are transferred to the final consumer, resulting in cost-push inflation.
In addition to the increased cost of farming, insecurity has led to many farmers abandoning their farm lands. Dry season farming, which is aimed at ensuring food availability all year round, has become increasingly expensive due to fuel and diesel costs; irrigation is often powered by generators due to the power challenges the country faces. All these factors have led to food shortages and encouraged hoarding and profiteering, resulting in food price hikes. Food shortages cause demand-pull inflation.
Livestock farming is also affected. The prices of animal feed have skyrocketed, leading to increased costs of rearing them. This, in addition to transportation costs and the cost of running generators when necessary, has led to a hike in the prices of meat, eggs, and milk. Cattle rustling is also a challenge.
The Federal Government has over the years implemented various intervention programs to promote domestic food production. However, the question remains whether these interventions reached the people they were actually intended for. No matter how laudable a program may seem, without proper execution and monitoring, the intended results may not be met. The Local Government, being the closest arm of government to the people, should play a major role in such intervention programs. The government should continue to promote domestic food production by providing subsidized genetically improved seedlings, fertilisers, low-interest loans, etc.
While working on improving insecurity, power, and road networks, the government should provide cheaper or subsidised means of transporting food items. Presently, the cost of transporting food from the farms to the final point of sale significantly impacts the final price of the food items. Cheaper distribution costs will result in lower food prices.
The value chain should be improved to reduce post-harvest losses during the harvest season, improve the quality of food products, and increase the income of farmers. Also, It is worthy to note that food importation and agricultural subsidies are not alien , as even developed nations like the United States of America and China engage in them.
While acknowledging that there is no magic wand for achieving food sufficiency, it is important to note that banning food importation when domestic food production is insufficient often encourages hoarding and profiteering. Therefore, President Bola Tinubu’s approval of the suspension of duties, tariffs, and taxes for the importation of certain food commodities for 150 days and the proposed importation of 250,000 metric tonnes of wheat and maize respectively by the Federal Government is in the best interest of the nation even as he has assured that his administration will continue to drive local food production.