As food crisis deepens in Nigeria
Lanre Oyetade, Group Business Editor
Abba Ruma,
Minister of Agriculture and
Water ResourcesA precarious situation.
It is no longer news that the prices of most foodstuffs
in the country, especially grains and the staples,
have skyrocketed by more than half in the last few months. It is also no longer news that organised labour is already at daggers drawn with the Federal Government over demands for planned wage increases as a means of fighting rising costs of living engendered by generally increasing price levels.
Pundits have expressed hopes that, in the face of the global food crisis, the situation in the country will not get as bad as what obtains in fellow African counties such as Burkina Faso, Cameroon, and Niger, where food-related riots have left many injured before lasting solutions were found to the problems.
The Nigerian authorities, against this backdrop, had risen from an emergency meeting between President Umaru Yar’Adua and governors of the 36 states of the federation last Tuesday, and approved the release of N80 billion for the importation of 500,000 metric tonnes of rice, one of the worst-hit food items.
Nigerian authorities act
Addressing journalists after the meeting, the Ondo State governor, Dr. Olusegun Agagu, stated that the government had come to terms with the fact that there was indeed a global food crisis, affecting different countries of the world at different levels.
“Although we cannot say there is famine in the land in Nigeria yet, the prices of foodstuff are going up and the availability in a number of places is diminishing and we must take immediate measures to address this ugly trend,” he stated.
Additionally, the government decided to release from the strategic grains reserve as a buffer stock to augment supply and stem the alarming increase in food prices.
Barely two days after the meeting, the organised labour, as represented by the Nigeria Labour Congress (NLC) and its president, Comrade Abdulwaheed Umar, used the opportunity provided by the May Day ceremonies held last Thursday to put up their case for an urgent upward review of workers’ salaries in the light of both increasing food prices and government’s plans to increase electricity tariffs.
The social security breeches that might be caused by the growing food crisis are bound to have micro economic units fallouts. The case was recently reported of a relatively indigent family in Lagos, where the housewife had stabbed her husband to death during a fight over what she described as the meagreness of the food allowance the husband offered.
The poor as worst hit
It is not surprising that the poor is the worst hit by this food crisis, for the simple reason that this class of people spend a huge portion of their income, at times as high as 75 per cent, on food and other basic necessities whose prices are also bound to rise in response to increasing food prices.
High food prices, therefore, undermine the society’s fight against poverty and the implications for food price hikes are multi-natured for a country like ours. The fact that food prices have jumped about 50 per cent since end-2006, have continually had negative terms of trade implications for net food importers like Nigeria, while net food exporters such as Thailand would gain.
Terms of trade itself, in international trade parlance, is measured in terms of the prices of a country’s export vis-à-vis its imports. When the prices of a country’s export rise in terms of its imports, the country benefits on the basis of its terms of trade, since a given quantity of its exports can now procure more quantity of its imports, and vice versa.
Undeniable macro losses
Even though it may be argued that what terms of trade benefits might Nigeria have lost in respect of its rising food importation bills might have been gained in terms of rising international crude prices, a product Nigeria exports, it will be instructive to note that while we export crude, we still import most of our refined products, thereby negating whatever terms of trade we might have hoped to gain from rising oil prices.
In the final analysis, therefore, the country is a net loser on terms of trade grounds with rising food prices.
Rising food costs will also contribute in no small measure to defeating our inflation control and targeting efforts. The country’s monetary authorities have so far been able to control inflation at the single digit level but it is doubtful if this can continue for any reasonable length of time, when one considers that a huge portion of Nigeria’s populace falls below the poverty level, and has most of its basket of purchased commodities made up of basic foodstuffs.
One also wonders what becomes of international programmes such as the Millennium Development Goals (MDGs), which aim at cutting poverty by half worldwide by 2015, barely eight years away.
A global crisis
Nigeria’s current experience of the crisis can, however, not be divorced from the current global experience, which has seen traditional food exporters such as Thailand restricting their exportation of staple foods like rice from their countries in order to stave off hunger and high food prices in their domestic economies.
Improved per capita income, increasing population and growing demand for food among many of the world’s emerging nations such as China and India have seen traditional stocks of staple foods becoming depleted worldwide.
Other factors fingered for this crisis include higher energy and fertiliser costs, the growing use of crops for production of ethanol and other biofuels especially in the United States and the European Union countries. It is estimated that over 50 per cent of demand for such crops in these countries in 2007 was for the production of biofuels.
Droughts, reduced wheat production in Australia and the Ukraine, natural tragedies like floods and political instability in mainly agrarian countries like Kenya, have also all contributed to the crisis.
Further action required
Plausible solutions to the looming crisis could be short-, medium-, or long-term natured. In the short-term, such measures as mass importation of scarce grains like the federal government has done, and demand management policies such as the mopping up of ‘excess’ liquidity by the monetary authorities may be undertaken and implemented but it is doubtful whether their effect would be sustainable.
Such measures, though effective in the short-term, must be substituted ultimately with medium and long-term measures that would introduce some level of permanent solutions.
Ultimately, all pundits agree that the lasting solution is to undertake ‘Back-to-the-Land’ measures that would not only make agriculture more attractive to the youth but also more lucrative to all those that undertake agricultural projects.
Government has paid lip service to agriculture for too long and it is high time we started putting our monies where our mouths are; we all agree and appreciate that no economy can truly grow without taking adequate care of its agricultural sector, both as a means of feeding its populace and providing raw materials to its industries.
This is especially so much so for a developing economy like ours with a teeming population.
If the youth is to stop drifting from the rural to the urban areas and from the country’s urban areas to foreign climes due to lack of employment in their own Father Land, then such measures as improved rural infrastructure development, access to agricultural loans, better distribution and storage facilities, among other such viable programmes must be urgently undertaken to boost agricultural production.
Nigeria was once a net exporter of many of these agricultural products and it will not be too ambitious to fathom achieving the feat once more.
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