Having trudged through a year that saw prices decline by 10.3 percent to N130,000 per metric tonne and limited off-taking channel controlled by flour millers, Nigeria’s wheat farmers are banking on the federal governments intervention to open a new chapter in price stability and off-taking of the cereal grain.
The lack of price stability and adequate off-taking has been a source of concern for farmers as the benchmark price fixed by millers only pared the profitability on local production, according Salim Saleh the President Wheat Farmers Association of Nigeria (WFAN).
In 2017, millers and farmers related on the basis of N145, 000 metric tonne agreement but this was slashed to N130, 000 in what appeared an expensive deal when import particularly from the US at that time was cheaper at $218 (N78, 480) per metric tonne.
“There is no stability for wheat pricing in the country and it is not stable either on the international market. But our off takers are flour millers and they are not giving us good prices. Selling at their offer is a loss for us,” Salem groused.
“For a farmer to sustain his business, he is supposed to have got N18, 000 per 100 kilogramme and in a worse case, N15,000. But surprisingly flour millers offered N13, 000.”
Global wheat prices inched higher at the end of November on the heels of improved export demand and unfavourable weather in some exporting countries but plunged by 0.12 percent to $5.24 per bushel at the end of December on higher production from the Black Sea region.
The United States, a major exporter to Nigeria has been working hard to accelerate the below-average pace of Hard Red Winter (HRW) exports to attain its current export forecast of 8.7 million tonnes (320 million bushels), according to the Foreign Agricultural Service, United states Department of Agriculture (USDA).
As of November 29, HRW total commitments inclusive of accumulated exports and outstanding sales were down compared to last year, particularly to Mexico and Nigeria. But sadly for the local wheat market, they have begun to improve in recent weeks.
And in fact, Nigeria’s wheat imports in 2018/19 marketing year (MY) are forecast at 5.4 million metric tonnes (MMT), up four percent from the MY 2017/18 import figure of 5.2 million metric tonnes. This is attributed to greater increase in millers’ access to foreign exchange.
What this means is that local pricing may not experience an upward review as being clamoured by farmers in that the renewed commitment of leading exporters is likely to make import even more attractive.
Salem who described the grain as a political crop urged the government to support local production by establishing a guaranteed minimum price between farmers and millers or introduce interventions that can make up for the difference in pricing.
“For instance where a farmer is seeking N15,000 and the off-taker is insisting on N13,000, then the government should augment the N2,000 balance between. This will ensure the farmers do not sell at a loss, while the buyer will not bear higher cost burden,” he explained.
The association also craved for government support in terms of improved seeds, saying it needed new varieties to update its quality.
However, Olabanji Oluwasina Executive Director of Lake Chad Research Institute, Maiduguri, said the problem with wheat production does not lie in the seed variety but everything to do with the lack of political will to develop the crop as is being done with rice.
Although he admits that the Lake Chad Research Institute has the responsibility to release new variety every three years, he insist the variety currently available to farmers (Norman) , was of good quality and could yield about two metric tonnes per hectare.
He said Reyna 28, a high yielding variety capable of 5.5 tonnes under standard agronomic conditions, with early maturity and good baking qualities, is currently being multiplied in Jigawa and Abuja.
“Reyna 28 is another improved variety but we didn’t have enough foundation seeds to multiply to farmers and seed companies until now. However, all these things we are talking about are just paper work except we can have the political will. The government has relegated other crops for rice production which shouldn’t be so,” Olabanji said.
He also substantiated the idea that government needs to subsidise wheat processing in order to fix the shortfall in local wheat pricing.
Temitayo Ayetoto
