Home Analysis Food crisis, why Nigerian Goverment must face reality

Food crisis, why Nigerian Goverment must face reality

by Business News Report

Last month, the Food and Agricultural Organisation, an agency of the United Nations, raised alarm that Nigeria, Morocco and Bangladesh face imminent food crisis.

The report, posted on the UN agency’s website, stated that the world food situation was in dire straits. It indicated that the global average price of foodstuffs such as maize, rice, sugar, wheat, meat and dairy products soared by 25 per cent in the international basket in 2010, compared to the December 2009 levels.

It also warned that if the situation was not urgently addressed, it could induce one of the worst food riots the world had ever witnessed.

Reacting to the report, the Minister of Agriculture, Prof Sheikh Abdullah, said that the Federal Government would not panic over such a report and criticised the authors for not seeking his opinion as Nigeria’s Minister of Agriculture. “Nobody sought my opinion; neither did anybody speak with the Minister of State for Agriculture or any of the stakeholders in the agricultural sector before coming out with the report,” he said.

According to him, such reports are often based on assumption and insufficient analysis.

However, he said the current administration was aware of the global food crisis and that efforts were ongoing to reposition the nation’s agricultural value chain for sustainable development. He noted that post-harvest losses, among other factors, hampered government efforts toward the attainment of food security and food sufficiency in Nigeria.

He said the Federal Government was already implementing several programmes aimed at promoting best practices in agricultural development, adding that the ongoing National Programme for Agriculture and Food Security provided the road map for the implementation of all government-assisted agricultural programmes.

He identified them as including the Commercial Agriculture Development Programme (CADP), FADAMA III, NERICA Rice Project and the IFAD-assisted Community-Based Natural Resource Management Development Programme (CBNRMP), Community-Based Agricultural and Rural Development Programme (CBARDP) and the Rural Finance Institutions Building Programme (RUFIN).

The minister missed the issue, the point is food prices are rising by the day and Nigeria is an importer of food items. If Nigeria is a net food importer and going by the import bill paid in hard currency, this must not be swept under the carpet.

The Central Bank of Nigeria is already grumbling on the effect rising import bill is having on the nation’s external reserves. Rising oil prices has shot up prices of commodity and Nigeria being a major food importer, has cause to worry.

The apex bank’s Monetary Policy Committee (MPC) at its January 2011 meeting observed that the fundamental structural problem of the country as an import-dependent economy was largely responsible for the continuing depletion of the external reserves.

The continuing decline in reserves, it said, was accounted for by the payment for JVC cash calls amounting to $6.867 billion and $5.657 billion in 2009, funding of the foreign exchange market to the tune of $24.83565 billion as against $25.070 billion in 2009 in the case of WDAS. Sales to BDCs amounting to $5.337 billion in 2010 compared with $4.734 billion in 2009, in addition to the payment of subsidies on petroleum products as well as other government external payment obligations.

The point is the nation’s import bill is rising just as food prices are rising. For how long will Nigeria continue to import rice, beans and other food essentials when there are lots of fertile land uncultivated? If the amount expended on importation is deployed to farming, will Nigeria not have attained self- sufficiency in food production?

At the moment, the survey by FAO shows that more than half of all employment in Nigeria depends on agriculture. But 90 per cent of the produce comes from small rain-fed farms of a few hectares, constrained by poor infrastructure and little access to credit. Many of these farms are unable to meet their own subsistence requirements, exposing families to volatile prices in the markets.

The Ministry of Agriculture has estimated that 65 per cent of the population is food insecure. The proportion of children aged under five who are underweight has fallen only slightly from 36 per cent in 1990 to 29 per cent in 2005 in which data are available.

The minister may be right to say that Nigeria had no shortage of foreign currency with which to import food, the country’s lack of storage and transport infrastructure impeded distribution.

There are also concerns that food purchases from neighbours such as Niger and Mali simply transferred shortages to those poorer countries. Food crisis can engender geo-political tensions like the type that rocked Mexico and Indonesia in 2008, fuel global inflation and increase hunger amongst the poorest in the society, the FAO report stated.

Bill Gates, the retired Microsoft billionaire said in last week’s edition of The Economist that “agriculture offers one of the greatest opportunities in Africa. If African farmers can use improved seeds and better practices to grow more crops and get them to the market, then millions of families can earn themselves a better living and a better life”.

The Alliance for a Green Revolution in Africa, led by a former United Nations Secretary-General, Kofi Annan, is working to develop and distribute new seeds that have higher yields and stronger resistance to pests, drought, and disease.

If citizens and their governments ensure that African farmers can use these new seeds and have all the advantages of recent advances, the farmlands of Africa can become the answer to hunger and poverty and a trigger for wide economic growth,” the billionaire said.

According to the FAO, its latest Food Price Index, a commodity basket that tracks monthly changes in global food prices, averaged 231 points in January and was up 3.4 per cent from December last year, “the highest level since the agency started measuring food prices in 1990. It added that prices of all monitored commodity groups surged in January, except the cost of meat, which remained unchanged.

The new figures clearly show that the upward pressure on world food prices is not abating. These high prices are likely to persist in the months to come, “ said Abdolreza Abbassian, an FAO economist and grains expert.

High food prices are of major concern especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food.“ Nigeria has become one of the world’s biggest importers of food staples, particularly rice and wheat, both of which the country could potentially grow in large enough quantities to be self-sufficient.

Even with the imports, about 38 per cent of Nigerians younger than five suffer from moderate or severe malnutrition, according to UNICEF, while 65 per cent of the population – roughly 91 million people – are what humanitarian organisations call “food insecure.” They are at risk of waking up one morning to find that they have nothing to eat.

A nation that depends solely on oil export for its foreign exchange must take the threat of hunger very seriously. Assuming the prices of crude oil drops to $20 and for the next six months it remains there, Nigeria would have used up existing reserves, then food will become scarce because we cannot import. It is better to begin to find lasting solution now than wait until it is too late.

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