Creating jobs through wheat value chain
With the current economic downturn Nigeria is grappling with, there is consensus across board, that there is no better time to leverage the potentials of the agricultural sector than now, to create jobs, attain food security and place it on the path of sustainable growth and development.
Africa’s most populous country can tap into the opportunities across the wheat value chain to create employment opportunities for its teeming youth population and drive food security as the country’s demand for wheat-based foods is constantly on the rise.
Data from the National Bureau of Statistics (NBS) indicates that unemployment, underemployment, and youth unemployment/ underemployment, reached 33.3percent, 22.8percent, 42.5percent respectively in the fourth quarter of 2020.
Meanwhile, the increasing dietary shift to more affordable wheat derivative foods such as bread, semolina, pasta, and noodles has led to expanded production, processing, warehousing, distribution/logistics, fleet management, last-mile and retailing activities in the wheat value chain, consequently lifting the employment generating capacity of the value chain from 10 million to 12 million.
Coming at such a crucial time when the impact of the COVID-19 pandemic incessantly weakens the economic contributory latency of other sectors, the robust activities being generated along the wheat value chain are a rare lift for Nigerian households.
The wheat value chain does not only provide jobs for the population, but it also ensures the population has consistent access to affordable quality foods.
In the past year, the prices of rice, garri, millet, and beans, which are notable national staples, have risen sharply by 21.1percent, 114.1percent, 57.2percent and 66.6percent, respectively, while the prices of wheat derivative foods have been largely cushioned from the adverse inflationary trend by local millers.
The flour milling companies, under the aegis of the Flour Milling Association of Nigeria (FMAN), and the bakers, intentionally absorb the extra cost of production occasioned by the tough operating environment, in order to keep feeding the population.
Take for instance bread, a widely consumed staple food produced from wheat. The wheat millers continue to ensure that while other food commodities increased in price by 50percent and more in the past year, bread is shielded from such debilitating trend, increasing by just 28.5% and the average daily production output of 10 million loaves are maintained.
To this end, bread has traditionally become the cheapest carbohydrate option available for Nigerians.
The availability of quality flour brands at competitive prices helps the bakers to maintain production level, forgo downsizing, and help meet customers’ demands, despite the adverse effects of the COVID-19 outbreak. Bakers, therefore, understand the importance of the millers’ intervention efforts.
How did the flour millers achieve such an important economic balancing act? The flour millers intentionally track commodity prices in the carbohydrate food staple space to keep the price of inputs for bread production competitive. The same goes for every other wheat derivative food such as semolina, noodles, and pasta, which the flour millers intentionally ensure are kept within affordable price boundaries of the consumers.
KPMG, a global consulting firm attests to the important roles played by flour millers in feeding a national population that has over the years been priced out of the other staple foods due to continuous food price inflation, increase in unemployment, and a declining income level.
In a report themed ‘Wheat-based consumer foods in Nigeria’, KPMG underscored the fact that the flour milling businesses that operate in Nigeria have been a source of “low-cost convenient staple and baked foods” for the teeming population.
This also explains why 45percent of the food variants served in Nigerian homes are produced from wheat. As more foods are being served to nourish, sustain and strengthen the Nigerian populace, by direct correlation, more jobs are also being created by the wheat millers and the wheat value chain.
“Presently, the wheat value chain accounts for over 10.5 million jobs generated annually in Nigeria. This, of course, has placed the wheat value chain at the centre of the various economic development agenda of the Federal Government of Nigeria,” Ashish Pande, managing director of Crown Flour Mill (CFM) Limited, a subsidiary of Olam, an agribusiness conglomerate, said while speaking on the employment-generating and food security roles played by the wheat value chain.
To reiterate the nutritional and economic contributions of flour millers, Ashish expatiated further that the wheat value chain adds about N2.3trillion to Nigeria’s annual GDP which is the average yearly spent on wheat derivatives that accounts for 75 million daily food portions of Nigerian households.
“To scale up its contributions, the milling association continues to invest N500 million annually in seed trials, research, training of smallholder wheat farmers, and reimbursing the various farming research institutes in the country to ensure that the current local production levels of wheat improve significantly.”
“While these efforts have ensured that we keep providing affordable and quality food for the growing Nigeria population, it has also deepened the rate of jobs generated for the young and active of the population,” he said.
Similarly, Professor Kehinde Adetunji, provost of the College of Agriculture, University of Osun, provided an insight into the robust activities that keep turning out the impressive job creation rates in the wheat value chain.
“Like other agro-products, the wheat value chain has created and is still creating employment at the pre-production that is the procurement of loan for land, labour, and training, production -seed procurement to field management till harvesting time, harvest – methods, tools, labour, and transport and postharvest – handling, storage, processing, and milling, preservation, packaging, distribution, and marketing levels,” Adetunji said.
“The wheat milling industry is one of the most important drivers of employment in the food sector,” he added.
Considering the contributory role that the wheat value chain plays in employment generation and food security, all hands must be on deck to support flour millers, in their current efforts to strengthen the all-important value chain. Formulating and implementing a developmental agro and financing policy framework that would ensure that flour millers continue to access wheat would help maintain the key roles of providing affordable staple foods and employment for the Nigerian population.
This should be the focus of the Federal Government and relevant agencies and key stakeholders, especially at this challenging perio