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Food Inflation Up By 108% Since 2015 , Despite Billions On Agriculture

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images 2020 09 17T151826.988 Food Inflation Up By 108% Since 2015 , Despite Billions On Agriculture

Nigeria’s food inflation has more than doubled since August 2015, exactly 5 years after the Buhari Administration took charge of the Nigerian economy.
This was determined by comparing the composite index for food inflation rate in August 2020 versus same period in 2015. The difference is a whopping 108% increase in inflation rate, in just 5 years. Within this period, Nigeria’s exchange rate has been devalued by 49%.
Whilst the Nigerian economy has been ravaged by a very low oil price environment, since it fell from over $100 per barrel in 2014, most of the reasons for the increase in cost of living are partly attributed to some of the policies of the government.
Since 2015, the government has focused on a ‘grow-what-you-can-eat’ policy, pouring billions of naira into the agricultural sector. Since its inception in 2015, the Anchor Borrowers Programme (ABP), has received about N190billion disbursement from the CBN.
Another N622billion was lent through banks under the Commercial Agriculture Credit Scheme. Add the various grants, tax incentives, and concessions, that’s almost N2 trillion spent in the last 5 years on helping Nigeria to achieve food self-sufficiency.
Whilst modest successes have been recorded, the cost of staple food items remain high – galloping in each passing month. Since the border closure was announced in August 2019, the food inflation rate has risen every month,
from 13.17% in August of 2019 to 16% last month. It is projected to hit 20% by the first quarter of 2021 , when the effects of the increase in petrol and electricity prices are accounted for.
Nigerians have never had it this bad. Despite the good intentions of the government, things have not particularly turned out well. A common challenge in trying to solve a problem is not being able to manage what is outside of your control. In agriculture, a lot seem to be outside of the control of this government.
Yield per hectare for most farming is well below global standards, driving up the cost of whatever is left to be sold to Nigerians. Farmers also face insecurity, flooding, and sometimes famine affecting their ability to plant and harvest. Even after harvesting, supply chain challenges still persist, leaving farmers to contend with middlemen, transportation, and storage. The result is far less farm produce reaching the final consumer.
For items under its control, it still cannot determine the outcomes, and the causes and effects. Just last week, it announced the banning of maize, only to flip-flop after learning that poultry farmers lacked maize feeds to grow their chickens. It quickly granted licenses to four companies to import maize.
Thus, while the government attempts to manage what it can control such as banning of imports, denying access to forex, and of course border closure, it cannot solve all these problems with CBN funding and banning. They are structural, and require a better approach that is private sector driven, yet pragmatic. The government also needs to tell itself the truth; Nigeria cannot be self-sufficient by banning.
So long as we continue to avoid relying on data and objective reasoning, to balance the need for local agro-processing and imports to meet demand, food inflation will remain high and galloping. Who knows, by the time this administration’s tenure is up, we could be looking at a state of emergency driven by a full blown food crisis.

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Agriculture

Agriculture revolution, food security so far

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images 2020 10 26T091817.814 Agriculture revolution, food security so far

Nigeria has celebrated its 60th independence anniversary and there are mixed feelings about the nation’s level of development on all fronts especially in relation to its natural endowments and human capital.

An assessment of the country’s agriculture sector since independence reveals that there have been considerable achievements but not up to the desired level. The sector, which holds the potential to steer the country’s economy out of the doldrums is yet to adequately find its footing owing to several challenges.

Owing to the dwindling performance of the agriculture sector in the country, successive administrations, both military and democratic, have formulated and implemented various policies and projects aimed at putting the sector back to its critical place in the economy.

Looking at the nation’s agriculture in segments, the period before the discovery of crude oil, and before and immediately after independence was the sector’s glorious season when it was the mainstay of the economy. During this period, Nigeria boasted of cash crops such as rubber, cocoa, and timber, palm produce, and groundnut, among others, which foreign exchange earners for the country. It was equally self-sufficient in several food crops including cassava, maize, yam, cocoyam, wheat, etc.

In the period after the discovery of crude oil and after independence, Nigeria’s agriculture suffered setback owing to the neglect of the sector by government. The cultivation and maintenance of cash and food crops owing to abundant cash inflow from oil was neglected. Nigeria went from being an export country to an import-dependent nation, importing almost everything including toothpick.

The period following this is the period of restoration marked by successive governments’ recognition of the sector’s importance to the economic survival and sustainability of the country. They have, over the years, formulated and implemented various policies and projects targeted at resuscitating agriculture and repositioning it to occupy its pride of place.

There was the Operation Feed the Nation (OFN) programme of the Obasanjo-led military administration; the Anchor Borrowers’ Programme (ABP); the 2016-2020 Agriculture Promotion Policy (APP) also known as the Green Alternative; the Growth Enhancement Support (GES) scheme aimed at subsidising fertiliser by 25 per cent; Agricultural Credit Guarantee Scheme Funds (ACGSF); Commercial Agriculture Credit Scheme (CACS), and Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), among others.

Other measures were the restriction of forex for imports of certain food items, outright ban on importation of goods that can be produced locally, removal of subsidy for the importation of 41 non-essential commodities and border closure last year August.

Through these efforts, Nigeria’s agriculture has recorded some achievements. Today, the country is doing well in rice production boasting of over 40 rice mills with production volume running into hundreds of millions of tonnes annually. Oil palm produce is also receiving attention from the Central Bank of Nigeria (CBN) and production of several other crops have received boosts from both government and private sector.

Further steps taken by government to reposition agriculture came in the form of massive awareness among youths to attract them into agriculture and agribusiness. This has given rise to the birthing of a crop of youths who are investing heavily in agriculture and giving the sector a fresh breath of life.

Despite these moves to bring agriculture back to its enviable position, several challenges have kept it struggling over the years. Major among these challenges has been the insincerity of implementing authorities in the implementation of the programmes intended for the resuscitation of the sector. Farmers have always insisted that funds and other inputs intended for their use rarely get to them and where they do, it is usually after struggling through several bureaucratic bottlenecks.

The non-mechanisation of the country’s agriculture has contributed in no small measure to keeping the sector stagnant over the years. Till date, manual labour still characterises Nigeria’s agricultural practices.

High interest rate on funds meant for the sector is another albatross militating against its progress. According to stakeholders, commercial banks give about 29 per cent interest while government interest is 9 per cent but they insist that any interest rate on agriculture loan that is above 5 per cent is not tenable.

The challenge of post-harvest losses equally constitutes a setback to food security. Lack of processing equipment needed to process excess farm produce into other products has often resulted in wastage of perishable produce thereby creating scarcity during off season of such commodities.

Poor road networks that make it difficult to get farm produce to the market, especially in rural farm communities, is another challenge confronting the sector.

The herders/farmers crises that have beset the country in the last three to four years have set agriculture and the nation’s efforts to attain food security back a great deal. The regions known as the nation’s food baskets have been majorly hit by these crises which have seen farmers abandoning their farms and taking refuge in Internally Displaced Persons (IDP) camps.

Speaking on Nigeria’s agriculture sector since independence, the Vice President of Nigeria Agribusiness Group (NABG), Mr. Emmanuel Ijewere, sees the sector as having bright prospects when the right things are put in place.

Ijewere said, “before independence, immediately after independence and before the civil war, Nigeria was very good in agriculture and we were poised to be a major player in the field of agriculture in the world. After the war, and combined with the oil money that was coming in, the military went wild. That was when they made the stupid statement that money is not our problem but how to spend it. And everybody abandoned agriculture because it was too tedious, it was too much work. You can go to the big cities and get the oil money easily. That was the beginning of the downfall of agriculture.”

He stated that, “successive governments, including the military ones, came up several projects including Operation Feed the Nation (OFN), etc. All of them went to further finance the corruption that has already taken over the country. The farmer was discouraged, more people left the villages, went to the cities and left only old people in the villages who could not take advantage of the various agricultural advancements in the world.”

He, however, noted that, “As at now, I see great prospects. I see a situation where the private sector is getting more conscious of the fact that agriculture is the future of Nigeria’s economic development. More educated people are now coming in. Government is beginning to understand this. Even the state governments who used to go to Abuja every month to collect money are now taking agriculture in their states a lot more serious since that money is dwindling.

“All these things combined, it shows that going forward, agriculture has a brighter prospect. But in doing so, my prayer is this, and you may not like this prayer, may the price of oil continue to be low so that we can use those things that God gave us that will be more sustainable than oil. In any case, in the next five to 10 years, people are going to be in less need of crude oil in the world. So I think we have a great prospect now and I’m happy about it.”

Another stakeholder, Dr. Victor Iyama, President, Federation of Agricultural Commodities Association of Nigeria, (FACAN), believes Nigeria has not done too badly in its efforts to properly position agriculture and ensure food security.

According to him, “we have not done too badly but it could have been better. For a number of years, our concentration on oil has rubbed off on us and we are definitely not where we ought to be but from the look of things and the downturn in oil fortunes we’ve taken up agriculture. We are not there yet but I know that if we continue with this tempo, we will be there in a very short while.”

Iyama insists that, “we have a lot of commodities, domestic and the ones we can trade internationally. On the domestic commodities, we are trying. On the ones we can trade internationally, there’s still a lot of gaps in our production capacity and we have to do a lot about that. How can we be producing 250,000 tonnes of cocoa when a country like Cote D’Ivoire is producing 2.2 million tonnes of cocoa? And we’re almost 10 times bigger than them.”

He lamented, however, that, “we are still doing more of promoting importation. We are talking about not seeing dollars, but nobody is talking about the obnoxious laws and policies of CBN concerning our export. There’s no way you can say you’re promoting export and you’re gagging exporters from having unfettered access to their funds. We are promoting importation and killing export.

“In this country today that we are looking for dollars, are we not supposed to be discouraging import? A country that has problem of inflow and dollar liquidity, what do you do? You restrict your importation to healthcare system and agricultural equipment. Any other person who wants dollar to do anything should go and source for it.”

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Agriculture

Buhari Orders Reduction In Price Of Fertilizer From N5 , 500 To N5000

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5f6af5f277303 Buhari Orders Reduction In Price Of Fertilizer From N5 , 500 To N5000

President Muhammadu Buhari has ordered the reduction of the cost of fertilizer from N5,500 to N5,000 naira per bag.
The reduction was announced by the Vice Chairman of the National Food Security Council and the Governor of Kebbi State, Atiku Bagudu.
He disclosed this on Tuesday while briefing State House reporters in Abuja after the council met with the Chief of Staff to the President, Professor Ibrahim Gambari.
Bagudu explained that the Federal Government’s decision to reduce the price was to ensure food security in the country.
“You are a living witness to the trend in the country. Before the program, fertilizer was sold for between N8,000 to N12,000 in 2016 and when we started the Presidential Fertilizer Initiative, it was brought down to N5,500 that is the NPK and this has been the trend for three years and now the president decided to reduce it by another N500.
“So, you can sell fertilizer at N5000 to the farmers and the factory price at N4,500. This has been going on, but we have a problem with one of our key raw materials, urea that is being supplied by Indorama out of Port Harcourt,” he said.

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12 Reasons Nigeria’s Agric Revolution Is Real Under President Buhari

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images 71 2 12 Reasons Nigeria's Agric Revolution Is Real Under President Buhari

“I will stand my ground and maintain my position that under my watch, [the] old Nigeria is slowly but surely disappearing and a new era is rising in which we grow what we eat and consume what we make.”
President Buhari, December 14, 2016
“We are determined to change Nigeria from an import dependent country to a producing nation. We must become a nation where we grow what we eat and consume what we produce.”
President Buhari, April 5, 2017
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President Buhari is determined to ensure that Nigeria grows what it eats and produces what it consumes. He has been determined to ensure this since he assumed office in 2015. One of the first significant programs he launched was the Anchor Borrowers Program, led and underwritten by the Central Bank of Nigeria (CBN).
Since then, Agriculture initiatives like the Presidential Fertilizer Initiative (PFI), FarmerMoni, Livestock Productivity and Resilience Support Project (L-PRES), NIRSAL Agro Geo-Cooperatives Scheme, NIRSAL Multi-Peril Crop Indemnity-Index Insurance, Agriculture for Food and Jobs Plan (AFJP), N-Power Agro, and others, have been launched to support the presidential vision to revolutionize Agriculture in Nigeria. Many State Governments and Private Investors are equally keying into this Presidential vision, with emerging positive results, including but not limited to the following:
1. In Kaduna and Kwara States, Olam invested $150 million to build Nigeria’s largest integrated animal feed mill, poultry breeding farm and day-old-chick (DOC) hatchery, and an integrated poultry and fish feed mill, respectively. These game-changing investments were commissioned in 2017.
2. Ekiti State Government is partnering with Promasidor to revive the hitherto abandoned Ikun Dairy Farm. The project has seen a 5-million dollar investment from Promasidor. At full capacity, the Dairy farm will produce over 10,000 litres of milk per day, and employ more than 1,000 workers. In addition, a new rice mill is under construction in Ado Ekiti.
3. In Kebbi, in May 2020, GB foods opened a 20 billion Naira Tomato Processing Factory, and adjoining farm, the second largest factory in Nigeria and the only fully backward integrated plant in ECOWAS – and has the largest single tomatoes farm in Nigeria. When fully completed (all phases), the factory will be the largest fresh tomatoes processing factory in Sub-Saharan Africa. The farm will produce industrial tomatoes in the dry season and soya beans in the rainy season. The soya bean oil will be used to manufacture GBfoods’ Mayonnaise.
4. In Ogun, GB Foods in July 2020 opened its N5.5 billion state-of-the-art mayonnaise production factory in Sango, Ogun State. The soya beans to serve the plant will be farmed in its brand new farm in Kebbi State.
5. In Anambra, a year ago, October 2019, Coscharis commissioned its brand new Rice Mill, a 40,000 MT modular Mill. A second phase of 80,000MT capacity is under construction. Total investment by Coscharis comes to about 12 billion Naira. Prior to that, in 2016 the Company began growing rice on its own farms, and now has more than 2,500 hectares under cultivation.
6. Lagos State is building a 32-Metric-Ton per hour Rice Mill in Imota, one of the largest Rice Mills in Africa. It will produce 2.4 million bags of 50kg per annum, and create an estimated 250,000 jobs. It will source its rice from other States across the country, leveraging on the Anchor Borrowers Program of the Central Bank.
7. In 2018, Cross River commissioned its brand new 3 billion Naira Hybrid Rice Seedlings Factory to supply seedlings nationwide. The Factory, commissioned by President Buhari, is part of CrossRice, a multi-billion Naira Commercial Agriculture Development Project promoted by the Cross River State Rice Company Management Board, the Central Bank of Nigeria and Sterling Bank.
8. Under the Presidential Fertilizer Initiative, which launched in January 2017, a total of 22 blending plants were resuscitated as at the end of 2019, with a combined installed capacity of over 2.5 million metric tonnes. In that period more than 18 million 50kg bags of Fertilizer produced and supplied for sale. Prior to the launch of the PFI, only 4 fertilizer blending plants were in operation in Nigeria, running at 10% capacity utilization.
9. In Lagos, Dangote Group is building a 2-billion-dollar Fertilizer Plant that will be the biggest in the world, with a production capacity of 3 million tons of urea and ammonia per annum. It will commence production in the first quarter of 2021. It will make Nigeria the leading exporter of Urea in sub-Saharan Africa. Dangote Group in 2016 also launched a Rice Outgrower Scheme covering 150,000 hectares of land in Kebbi, Sokoto, Zamfara, Kano, Niger and Jigawa States, and is also building a 16MT/hour Rice Mill in Jigawa State, the first of six Rice Mills planned across the above-mentioned States.
10. In Ondo State, Nigeria’s leading grower of cocoa, a 9 billion Naira Chocolate Factory has just been commissioned in September 2020, with the capacity to produce 2.8 million tonnes of chocolate per annum. According to the Governor, to guarantee the supply of cocoa beans to the factory, a 1,700-hectare cocoa plantation has been revived, with 250 farmers.
11. The 2020 Wet Season Harvesting has commenced; with it will come a moderation in food prices. For example, Ogun State started harvesting Rice in August (the rice was planted in March). The State is developing hundreds of hectares of rice at Rice Hubs across 10 LGAs of the State, under the Value Chain Development Programme (VCDP), a partnership between the Federal Government and the International Fund for Agricultural Development (IFAD). Also under the VCDP, women farmers in Niger State are seeing a four-fold increase in rice yields. In the Hadejia River Valley in Jigawa State, which was largely spared the devastating floods that affected parts of Northwest Nigeria, Rice Harvesting has also commenced.
12. The National Food Security Council (chaired by President Buhari, with Kebbi State Governor as Vice Chair) has met twice in recent weeks to tackle the issues of flooding and rising food prices. Relief interventions are being made available to the farmers affected by the flooding in Kebbi and other parts of the Northwest, and they are gradually bouncing back and preparing to re-plant. Parts of the Southwest that had previously suffered shortfalls of rain are also now seeing a reversal of this situation.
“Through the food security initiative, we are promoting “Grow What We Eat” and “Eat What We Grow”. I am also delighted that more and more Nigerians are taking advantage of the opportunities in the agriculture and agri-business sector.”
President Buhari, June 12, 2020

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