LAGOS – As Nigerians continue to face the reality of the continued increase in the prices of petrol and food prices which have pushed the nation’s inflation to 32.70 percent in September, stakeholders in the agriculture sector have advised the government to cut down interest rates and dedicate more developmental funds for agriculture in order to assist the farmers and Nigerians in general to navigate this trying times.
The stakeholders in separate interviews with Daily Independent, also urged the government to increase grant or subsidy on seeds, fertilizers and other farm implements and that the government should find means to subsidize food and household items.
They are of the opinion that the recent price hike would have a negative repercussion on food production and attainment of food security in the country.
They expressed worry that this action will further deepen inflation and poverty in Nigeria and that many farms will have no other option than to close down especially the livestock subsector of agriculture.
Dr. Taiwo Adeoye, Managing Director of RostalResources, in his view pointed out that the cost of production will go up and that farmers would not be able to pass all the extra cost on the selling price of farm produce or products.
He said that this would lead to more farms closing down, especially livestock subsectors of agriculture.
“The most hit will be the poultry industry. Generally, there is a serious threat already to food security in the country,” he said.
Dr. Biodun Onalaja, Chairman/CEO of OkunRice, pointed out that the hike in petrol price will have a negative impact on every aspect of businesses and household consumption and that it may even trigger an increase in crime rate.
“Surely, food production will experience high cost of production as labour cost, materials cost and other factory overhead cost will be affected. In summary, production cost will increase.”
Onalaja said that consumption will drop as purchasing power of consumers will drop and that food security will also experience set-back.
“Every aspect of production from procurement of raw materials to consumption will experience cost increment and as such demand will drop and this will discourage large production which will cause a set-back on food security attainment,” he said.
Amb. Adeniyi Sola, Chairman, Highhill Group,said that the recent petrol price hike in Nigeria will surely have significant repercussions on food production and overall food security.
“Higher fuel prices increase transportation costs for goods, leading to elevated prices for agricultural inputs and food items. This can strain farmers’ profit margins and make food less accessible to consumers, exacerbating food insecurity.”
For Wale Oyekoya, Agric Consultant to OgunState Governor, the continuous way of increasing the petrol pump price is going to increase the food inflation in the country.
He said farmers will be hard hit as the cost of transporting farm produce to the market will automatically increase the price of food stuff.
He advised that the government should be thinking of reducing the hike in the food prices and not to add more pain or distabilisation into the farmers’ production.
“Nigerians should be prepared for a more tough time and mind where we go to save money in buying petrol. Increase in petrol price affects all the facets of our life and the government should subsidize farming business and assist the farmers through soft loans or grants.”
Oyekoya also urged the government to provide a flexible environment to farmers, provide modern farming equipment, fertiliser, seeds and other useful tools.
Sunday Ezeobiora, the National President of the Poultry Association of Nigeria (PAN), in his view said that the prices of fuel keeps going up despite reassurances by the government in the past few months that prices would stabilize after a while with the subsidy removal.
He said that the current petrol price hike will further deepen inflation and poverty in Nigeria and that the food production will be most hit by these price hikes, that farmers do not have enough money to buy inputs anymore.
“For those of us in the poultry industry we have farmers willing to buy the chickens to rear but the price of feed makes them shy away from hitting their targets.
Farmers now produce what they can manage the shock, if anything goes wrong. “Borrowing is now not an option for farmers because of the high interest rates. Farmers are now forced to take precautionary measures to forestall losses,” he said.
Ezeobiora said that poultry farmers have gone through disasters in the past four years starting from COVID -19 to naira scarcity and now consistent petrol price hikes.
Oluwasina Olabanji, former Executive Director Lake Chad Research Institute (LCRI), said that increasing the price of fuel is a big challenge to Nigerian farmers in the areas of production and transportation of goods.
He said that it will definitely reduce agricultural production and thereby mimicking the commitment to national food and nutrition security.
On measures to be put in place to assist farmers and Nigerians navigate this trying period, Ezeobiora advised the government to cut down interest rates and dedicate more developmental funds for agriculture.
He said the funds must be channeled to farmers and not middlemen or speculators.
Adeoye, said what a good government does is subsidise food production, that all over the world, the government of any country doesn’t joke with food security.
“In the situation we found ourselves in this country now, the government should subsidisefood by buying off farmers the farm products at prices that enable farmers to make profits and be encouraged to continue to produce as it is done in developed clime,”
He said that distribution of palliative measures will not work in a country where corruption is a major challenge
According to him, “Where are the impacts the so-called palliative measures have on the prices of foods in the marketplace? The government may have good concepts, but the implementations are faulty,” he said.
Onalaja urged the government to increase grant or subsidy on seeds, fertilizers and other farm implements and should ensure a stand by market is available to absorb all the farm outputs.
He also said that the government should find means to subsidize food and household items.
Adeniyi said subsidies for agricultural inputs would help mitigate costs for farmers, allowing them to maintain production levels.
He also pointed out that providing low-interest loans or grants to farmers can help them invest in necessary resources without incurring crippling debt and that investing in rural infrastructure, such as roads and storage facilities, can help reduce transportation costs and post-harvest losses.
He also advised that farmers should be provided with training on sustainable practices and efficiency which can help them adapt to changing economic conditions.
By implementing these measures according to him, Nigeria can better support its agricultural sector and improve food security in the face of rising petrol prices.
Meanwhile, the food inflation rate in September 2024 was 37.77 percent year-on-year, marking an increase of 7.13 percentage points from the 30.64 percent recorded in September 2023.
On a month-on-month basis, the food inflation rate in September 2024 stood at 2.64 percent, reflecting a 0.27 percent rise compared to the 2.37 percent recorded in August 2024.
This increase can be linked to the rising prices of items such as beer (local and foreign) in the tobacco class, vegetable oil, groundnut oil, and palm oil in the oil and fats class, as well as beef, gizzard, dried beef in the meat class, and products like Lipton, Milo, and Bournvita.
The average annual food inflation rate for the twelve months ending in September 2024 was 37.53 percent, a 11.88 percentage point increase from the 25.65 percent recorded in September 2023.
Dr. Muda Yusuf, Director/CEO, Centre for the Promotion of Private Enterprise (CPPE), while reacting to the inflation said it is troubling that the nation is witnessing a resurgence of high inflationary pressures after some few months of respite despite policy measures to tame inflation, especially on the monetary side.
“Purchasing power has continued to plunge over the past few months. The situation had been further exacerbated by the surging petrol price.
“After a few months of deceleration, the inflation numbers had returned to a spiraling path. Headline inflation rose to 32.7% in September 2024 as against 32.15% in August 2024, an increase of 0.55%. There was also a marginal increase of 0.30% in month-on-month inflation between August and September.
Food inflation maintained its uptrend rising to 37.77% from 37.52% after decelerating a few months ago.”
He said that the reality is that the dynamics driving inflation are yet to be effectively subdued and that these factors include the depreciating exchange rate, surging fuel price, rising transportation costs, logistics and supply chain challenges, high energy cost, climate change including resultant incidents of flooding, insecurity in farming communities and structural bottlenecks to production.
“These are largely supply-side issues. There is also the factor of seasonality of agricultural outputs which activates seasonal price surge in some food crops, while elevated inflationary pressures escalate production costs, weaken profitability, and dampen investors’ confidence.
“Not many investors can transfer cost increases to their consumers. The implication is that manufacturers and other investors are taking a big hit resulting from erosion of profit margins as a result of consumer resistance and weak purchasing power,” he said.
Yusuf, pointed out that tackling inflation requires urgent government intervention to address the challenges inhibiting production, productivity and security in the economy and that the real sector of the economy needs to be incentivised to reduce production costs.
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