Forcing down food prices instead of increasing production

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While holding forth as acting President, Yemi Osinbajo raised a task force of selected ministers to advise the Federal Government on how to stem the rising cost of foodstuff in the country. The decision portrayed government as embarking on a mission to regulate food prices, instead of ramping up production.

Nigeria has a deficit across every type of food produce. In fact, the Agriculture Promotion Policy released last year shows a 20.14 million metric tonne deficit across 13 major crops and 60 million poultry bird deficit.

The policy and strategy document released by the ministry of agriculture shows that rice production in the country which stands at 2.3 million metric tonnes has a four million ton gap from the 6.3 million metric tonnes demand. The deficit has been attributed to insufficient supply chain integration which remains a nagging issue in achieving sustenance. Wheat has a deficit of 4.64 million metric tonnes, driven by demand for various types of wheat (white, hard, durum) for bread, biscuits and semovita. Soya Beans, which has the lowest deficit at 150,000 metric tonnes has its demand driven by animal feed and its usage as a protein cost alternative. Chicken production in the country has a deficit of 60 million birds, a gap filled by illegal imports that enter the market at lower price points than domestic products.

Fish supply in the country has a 1.9 million metric tonnes deficit, attributed largely to a fall off in ocean catch and weakness in aquaculture yields; due to cost of fish feed which is a constraint on growth. Tomato also has a 1.4 million metric ton deficit, which is amplified by post-harvest losses of 700,000 metric tonnes. Yams, a two million ton deficit, Oil Palm, which refers to fresh fruit bunch (FFB) from which oil is extracted at a 10% – 15% efficiency rate has a 3.5 million ton deficit, and cocoa has a 3.35 million deficit.

The deficits have implied massive food importation in excess of $5 billion, a situation unlikely to change as long as the country fails to produce enough food. Analysts have also expressed the view that if committees could bring down prices, the country won’t have inflation in the first place. But as this is not case, it would have been expected that any committee being set up would be focusing on how to boost production so that over-dependence on food imports abates, instead of forcing the market to lower prices of possibly “scarce food items”.

(Businessdayonline)

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