Budget delay, low investment, input cost take toll on food prices

by | June 2, 2017 12:45 am

Slow passage of annual budgets, low investment in agriculture and high cost of farm inputs are the major causes of rising food prices, making it increasingly hard for Nigerian households to buy tomatoes, rice, beans and other staple foods.

The recurring feud between the Nigerian legislature and the executive, over annual budgets, is delaying incentives to farmers, thereby decreasing output and increasing food scarcity.

Similarly, the level of investment in many sub-sectors in agriculture—rice, cocoa, rubber, tomatoes, etc—is still low, meaning that output cannot meet the demands of 180 million people, resulting in demand overshooting supply, experts say.

Furthermore, input prices, ranging from improved seeds, fertilizers and poultry feeds are high, as a result of dollar crisis in the last 18 months, debts owed fertilizer suppliers and shortage of quality seeds.

“We are still not producing enough to start affecting food prices. It will take a while to grow the capacity we need to bring down prices. We need to improve our number of hectares, start farming all-year round before our food prices can be at par with imported varieties, or even cheaper. We also need to increase our investments in the agricultural sector,” Sani Dangote, president,   Nigeria Agribusiness Group (NABG) and vice president, Dangote Industries Limited, told BusinessDay.

Tomato prices have doubled as a result of a disease called Tuta Absoluta, which keeps recurring as a result of shortage of improved seeds and lack of preventive measures.

Bananas and plantains are currently scarce and their prices high, due to the inability of Nigerian farmers to farm them all—year round.

Though there is egg glut in some parts of Nigeria, as a result of too many people going into poultry production, the high prices of starter and grower feeds, as well as layer’s mash (over N3400 per bag) mean many farmers may abandon the business in the next season, except there is a government intervention, market watchers say.

‎”This is June, six months into the year and we have not signed the budget. The farmers are already entering the second cycle of farming and the budget for agriculture has not been signed.‎ How do you get bumper harvest with this approach to agriculture?” asked Ike Ubaka, preside‎nt of All Farmers Association of Nigeria (AFAN).

Ubaka called on the federal and state governments to ‎ensure budgetary provision for agriculture is released on time, to ensure farmers get inputs early enough for their cultivation.

“Look at our research institutes, and examine how much we have budgeted for them in the past 30 years,” he said, adding that Nigeria must learn from India about how research and agricultural science are interwoven.

He said there is a beggarly approach to agriculture as it is still not being treated as a business but as a social service.

Ifeanyi Okeleke, co-CEO of Kenfrancis Farms Limited, said skyrocketing prices of inputs could discourage many from going into agriculture in the next planting season.

Rotimi Fashola, senior partner, OIT Fash Consults, told BusinessDay that there can only be moderate food prices when there is higher investment and productivity.

“Until there is aggressive increase in production, we will not see the effect yet. We have to start talking about 12 million tons per year in paddy rice production before we can start meeting the needs of Nigerians. This will require us to do a lot more in terms of increasing productivity per unit area and increasing our land areas.

“We must have a yield average of five tons, which means we must use more fertilisers than we are now. it means we must increase our tractorisation, it means we must increase our water management system and  introduce more irrigation,” Fashola said.