Why food prices keep rising despite harvest

By Vincent A. Yusuf (Abuja), Hussaini Isah, (Jos), Abubakar Akote (Minna), Ibrahim Musa Giginyu, (Kano) & Idris Mahmud (Katsina)

Food prices in Nigeria have increased at a rate not seen in many decades. This is even as the harvest of most grains is still ongoing, thereby causing stakeholders to express fear on the negative effect on the agro-economy and the availability of food.

Although Nigeria is not specifically in this predicament alone, the country’s reliance on imports for the majority of its crops—aside from cassava, yam and a few other crops—makes the country extremely vulnerable to the global trajectory.

There is a shortage of critical crops that power Nigeria’s major agri-based industries and food systems, including rice, maize, wheat and soybeans. The problem is made worse by the depreciation of the naira, which has made imports—which were previously less expensive—even more costly.

Why prices soar

Our correspondents across the country spoke with actors in the grains markets on why, despite the bumper harvest recorded by farmers this year, the cost of farm produce has soared.

At Katsina markets, prices keep rising, a development that is frightening to most households, especially as the journey has just started towards the 2024 cropping season.

Alhaji Sa’adu Abashe, a grain dealer from Kano State, said most people were not conversant with the factors affecting the price of farm produce this year.

According to him, the depreciation of the naira and the high cost of living will not spare farm produce.

“Take a look at the general cost of living in the country; high cost of fertiliser, inputs, labour and fuel used in transporting the produce from one market to the other. Everything has tripled and it must be translated into the unit price of farm produce in the market.

“Maize, sorghum, soybeans, beans, millet and rice have each crossed N30,000 per 100kg and this is at their harvesting period,” Alhaji Sa’adu said.

He added that because the naira had drastically lost its value, the seemingly huge revenue the farmers were accruing was not enough to take care of their capital projects such as marriage.

“There is also the lingering food crisis in this continent of Africa occasioned by Covid-19, Russia/Ukraine war and the political crisis in Niger Republic. The sanctions placed by ECOWAS have made life difficult for an average Nigerien thus opening the routes of smuggling farm produce from our local markets at exorbitant prices,” he said.

Another grain merchant at Dandume market, Alhaji Muhammad Salisu, said the huge profit grain hoarders realized last year has motivated many to stockpile produce in this harvest period.

“Hoarding of assorted grains has become a lucrative venture since last year. Those that bought maize at N18,000 to N22,000, sold same at not less than N55,000. Therefore, they have built new stores where they are now stockpiling produce. This is fast creating high demand for produce in our local markets and very soon scarcity will set in.”

Salisu further said because of the high cost of food items experienced since last season, many local farmers have withheld their farm produce to save food and resources for the future.

“Some months back, many of our local farmers had food crisis as they sold off their farm produce. In order to be on the safer side, after this harvest, many have reserved their produce in case of any eventuality,” Alhaji Salisu added.

Similarly, Sani Kabiru Malumfashi, a farmer in Katsina State, said another factor that jacked up the price of farm produce was the high cost of complementary food items such as flour, couscous, rice, macaroni and spaghetti.

“We now majorly rely on homegrown foods for survival; an average household of 10 people cannot afford macaroni or spaghetti at N11,000 per carton, or local rice at N2,500 per measure. They go for maize or sorghum to make their dishes at a cheaper rate. This also places demand pressure on the farm produce making prices go high.”

He added that insecurity has also made large farms no-go areas for farmers, a situation that reduced the volume of grains produced yearly.

“Many large farms at Kankara, Faskari, Batsari and Sabuwa were not cultivated for fear of bandits. Where the farmers managed to produce, the miscreants set the farms on fire, hijacked the produce at harvest stage or demanded levy from farmers before they allowed them to harvest,” Malumfashi said.

As of today, Tuesday, this reporter recorded that a bag of sorghum was sold at N35,000, maize N41,000, beans N55,000 and millet N45,000 at Bakori grains market.

The Kano State AFAN chairman, Malam Abdulrasheed Magaji Rimingado, stated that the rush for raw materials by some companies, coupled with the high cost of transportation, was among the reasons behind the high cost of agro commodities.

He explained further that the demand by companies for raw materials has increased the demand for the commodities in Nigerian grain markets.

“If you go round our markets, you will find out that there has been a mad rush for agricultural commodities and in view of the fact that many producing areas in the country haven’t produced this year due to insecurity, that has created a shortage of farm produce like, sesame, rice, sorghum, maize among others.

“There is a competition between commodity consumers and companies hence the hike in prices,’’ he said.

He added that there is an over 200% increase in transport fare which, he said, translated to an increase in commodity prices as well.

Aminu Bello Bagwai, a farmer and grain merchant with over 30 years’ experience, said the hike in commodity prices is connected to the insecurity issues that have denied farmers in some places access to their farms, adding that the demand for agro commodities also increased when supply decreased due to the insecurity challenges.

In Niger State, marketers and farmers attribute the constant rise in the cost of food items to an increase in demand in the face of low supply.

The Chairman, Grain Sellers, Lemu Market, Gbako LGA of the state, Alhaji Danladi Kowangi, said unless government puts in place necessary measures that would increase the productivity of farmers as well as encourage more people to embrace farming, the price of foods may likely not come down.

He maintained that companies and wealthy individuals were also mopping up grains, especially rice, beans and maize directly from farmers, thereby causing a serious decrease in supply to the market.

Wealthy individuals and companies are buying directly from farmers and stocking up their stores, resulting in low supply to our markets. As farmers are harvesting, companies are buying and we learnt that some of them are also exporting produce like paddy rice, and wheat to other countries.

Continued on www.dailytrust.com

“Before, when farmers started harvesting, prices of food items usually came down because when you have enough supply in the markets and not many people are buying, you have no choice but to bring down the price. But that is no longer the case.

“Also before, I used to buy about five trailer loads of paddy because you will get enough to buy but this year, I telI you I have not been able to even fill up one trailer because companies have mopped up produce right from the from farmers and kept them in their stores.

“Recently, someone contacted me to get him 500 bags of maize and we got it at the cost of N25,000 per bag. So, companies and individuals are mopping up grains and they don’t take it to the market to sell; they are keeping them in their stores.”

Alhaji Danladi said a bag of paddy rice has gone up from N22,000 to N26,000 even as farmers were just harvesting, adding that a bag of maize is now N35,000; while millet is also  N35,000 in Lemu market.

Daily Trust gathered that in Batati market, Lavun LGA in Niger State, one of the rural markets where food items were always cheap, a bag of sorghum is N30,000; millet N23,000 while red beans is sold at between N40,000 and N45,000 among others.

One of the rural farmers in the state, Salihu Ibrahim, also told our correspondent on the phone that the demand for produce was higher than the supply.

He further stated that the low fertility of soil no longer allowed farmers to record high yields; while access to fertilizers still remained a serious problem.

While speaking with Daily Trust, the chairman of the grain market in Saminaka, Manu Isah Idris, said there are many reasons for the increase in food prices this season.

He said the war in places like Ukraine and Palestine, contributed to the increase in food demand, adding that the removal of fuel subsidy in Nigeria also contributed to the rise in food prices.

Alhaji Idris explained that maize was not cultivated much this year because of the cost of fertilizer, adding that those who did not cultivate were trying to buy because they didn’t know what would happen next.

A farmer and grain dealer, Alhaji Ali Tanimu Kunkuru, explained that the reason for the increase in the price of maize this year is that many farmers have not grown maize this year but soybeans because they did not have money to buy fertilizer to grow maize.

He further explained that the demand for feeds and household consumption triggered the hike in the price of maize.