BusinessDay
NigeriaDecides2023

Food inflation to worsen as insecurity bars farmers from harvest

Nigeria’s food inflation could worsen in the coming months as insecurity forces farmers away from farmlands where they should be gathering ripened crops till the end of next month.

The situation could add more pressure on cash-strapped consumers in Africa’s most populous country, who have been facing higher food prices since the beginning of this year.

“Just like any other person, the fear of being kidnapped prevents farmers from readily accessing their farms,” said Ibrahim Kabiru, national president of All Farmers Association of Nigeria.

This means that some of the crops that are already due for harvest would be abandoned, he said.

Abiodun Olorundenro, operations manager at Aquashoot Farms, said some farmers were paying bandits just to be able to cultivate their farms.

Olorundenro said he is cultivating a smaller farm in Ogun State but he cannot cultivate a larger one in Oyo State.

“The food shortage is real,” he said.

Insecurity has intensified in Nigeria in recent years, affecting economic growth, particularly for agricultural sectors. The northern region of the country, where a bulk of its food production takes place, is the most impacted.
Read also: Nigeria’s food inflation rises despite drop in global commodity prices

According to data from the Armed Conflict Location & Event Data Project, about 1,200 people were kidnapped in the first half of 2021, up from 45 in 2010.

Data from SBM Intelligence also showed that between July 2021 and June 2022, no fewer than 3,420 people were abducted across the country.

Agric companies mostly in the food-growing regions have stopped operations because of the insecurity, says Ikemesit Effiong, head of research at SBM Intelligence

“This is the harvest season but a lot of that is not happening. So, food availability is likely going to be an issue,” said Effiong.

According to the National Bureau of Statistics (NBS), food inflation, which constitutes more than 50 percent of the headline inflation rate, surged to a 14-month high of 22.02 percent in July from 20.6 percent in June.

The surge, which also increased for the fifth consecutive time, was caused by insecurity, high energy prices caused by the Russia-Ukraine crisis and exchange rate depreciation.

Apart from July food inflation, the NBS reported that the country’s inflation also sustained its upward movement as it rose to 19.64 percent in July, the highest since September 2005.

AfricanFarmer Mogaji, CEO of X-Ray Consulting Limited, said food production had dropped due to the reduction in the size of farmland that farmers cultivate, coupled with the high cost of inputs, logistics cost and climate change.

A BusinessDay survey shows that a 50kg bag of fertiliser sold in January for N12, 000 now sells for as much as N28,500 in the farming community of Ketu-Epe in Lagos.

The price of Automotive Gas Oil, popularly known as diesel, has soared by 178 percent year to date to an average of N800 per litre from an average of N288 in January.

While the logistics cost of moving agricultural produce from the North, where it is cultivated to the South where the markets are located, averages N600,000 per truck, compared to the N350,000 it cost in 2015.

Growth in the agricultural sector has been inconsistent and slowing since the fourth quarter of 2020, before it surprisingly rose to 3.58 percent in the fourth quarter of 2021 and slowed to 3.16 percent in the first quarter of 2022, according to NBS data.

But the capital imported into the agriculture sector in the first quarter of 2022 declined by 99.3 percent to $1.76 million from $237.83 million in the preceding quarter, data from NBS show.

“The challenges in the sector are causing investors to divest,” Olorundenro said.

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