• Monday, April 15, 2024
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BusinessDay

Grain price drop won’t last long – Experts

Drop in grain price

The recent decline in the prices of grains owing to the suspension of offtake by major millers won’t last long if the government fails to tackle insecurity and other major factors hampering farmers’ productivity, experts have warned.

Experts and farmers have expressed concerns, saying that it is important to address the issue of insecurity and other underlying factors that are responsible for the supply shortfall of most key staples in the country, if the government must stabilise food prices in the long term.

“While the temporary suspension of off-taking by major millers may have some impact on managing food prices, it is important to address the underlying factors that drive the surge in prices,” Kamaldeen Raji, managing director at AFEX Fair Trade Limited, said.

These factors, he added, include rising insecurity, transportation costs that affect input prices, market demand, and overall supply availability.

“By addressing these factors and ensuring a sufficient supply of commodities in the market, there is a better chance of stabilising food prices in the long term,” Raji stated.

The spate of killings in key crop-producing states are worsening the plight of farmers who are already faced with a myriad of crises, posing a threat to the country’s food production.

The security situation in the country is adversely affecting food production and causing a supply shortfall in most key staple crops and forcing Nigeria to rely more on food imports.

Data from the National Bureau of Statistics (NBS) show that Africa’s most populous country spent N1.6 trillion in the first nine months of 2023 importing food, a 14 percent increase from N1.4 trillion on food imports in the same period of 2022.

Since the security crisis escalated, Nigeria has lost over 60 percent of its food production in key-producing states, experts say.

“We need to address the issue of insecurity to ensure that the price drop is sustained,” said AfricanFarmer Mogaji, chief executive officer of X-Ray Farms Consulting.

“Insecurity is the major problem to the country’s agricultural production. Lots of lands used for cultivation have long been abandoned as farmers flee for safety. The government must tackle insecurity if it truly wants to stabilise food prices in the long term,” he said.

Apart from millers buying bulk of the country’s grains, Nigeria’s weak currency, the naira, is also fuellinng a huge demand for its grain across West Africa as they are cheaper than that of the regional markets.

The Nigerian government has since been cracking down on grain exports to neighbouring countries despite being a signatory of the ECOWAS Trade Liberalisation Scheme.

Farmers faulted this action, saying that what is needed is to put measures in place that will ramp up production.

All-year farming, mechanisation seen boosting output

“We operate a free market economy and the government cannot determine who buys and who does not,” Jude Obi, president of the Association of Organic Agriculture Practitioners of Nigeria, said in a response to questions.

“Will the government prevent trade between Nigeria and its neighbouring countries because it wants to control prices?” he asked.

“We should be talking about doing all-year-round farming and not depending on rain-fed farming. We have the arable land and population to make this happen. It takes three months to grow and harvest grains, so all-year-round farming is possible,” he said.

He added that output can only increase when farmers have incentives and use mechanisation and modern farming techniques.

Nigeria is listed among the least countries in the world with mechanised farming. The rate of the use of agricultural machinery is still below that which is considered necessary to meet the rising demand for food, as stipulated by the Food and Agriculture Organization (FAO).

The country is one of the least mechanised farming countries in the world with the country’s tractor density put at 0.27 hp/hectare which is far below the FAO’’s 1.5hp/hectare recommended tractor density for Africa and other developing countries.

Average farm yields must increase

Kabiru Ibrahim, national president of the All Farmers Association of Nigeria, said the right infrastructure to support food production and distribution is lacking in the country’s agricultural sector.

“The government must work to provide good transportation for efficient distribution of goods and services,” said Ibrahim.

Critical infrastructures such as motorable rural roads and storage facilities, among others, are still absent in Nigeria’s food supply chain, hence reducing farmers’ earnings as high costs of production filter through to prices.

He added that the country must increase its average farm yields to increase output and attain food security.