MARKET NEWS
‘High Logistics Cost Triggering Food Inflation’ - LEADERSHIP
Adegwu John
Experts in the agricultural sector have attributed the current progressive rise in the cost of food items to high cost of logistics in the production, processing and marketing of agricultural produce value chain.
High cost of fuel and gas, multiple taxations banditry, cost of farm inputs and effect of Ukraine-Russia war are other variables they blamed to be responsible for the current inflation in the food sector.
For example in the production of foods products, farmers spend between 18,000 naira to buy urea fertiliser unlike previously when the same was sold for about 9,500 naira, While the hike in price of gas which sells between 600/700 naira and black market price of petrol above official price post significant increase in transportation of farm produce from rural to urban areas across Nigeria.
Findings show that it cost about N1,100 to transport a 50kg bag of rice from factory in Lokoja to lbadan market and a truck-load of 600 bags costs N660,000, from about N300,000 in April 2021.
Statistics released by National Bureau of Statistics (NBS) in March this year show progressive increased in the level of inflation which was majorly caused by high cost of food that rose to 15.92 per cent.
This is even as inability to afford food among low income earners create a gap between availability, affordability and the take home food.
Additionally, according to 2022 report by the Food and Agriculture Organisation (FAO) and the World Food Programme (WFP), Nigeria is listed among “20 hunger hotspots” in the world as 8.7 million people are food insecure in northeast Nigeria.
Sadly, the report warned that Nigeria, Ethiopia, South Sudan and Yemen will face famine and should brace for starvation and death in 2022.
Without corresponding increase in wages to augment these price hike of food commodities due to unavoidable high cost of logistics, members of the public in other parts of Nigeria are likely to experience severe hunger for inability to afford food items.
With this ripple effect, consumers of agricultural products are bearing the brunt especially as their income and wages remain unchanged.
A vegetable buyer who lives in Dakibiyu village in Jabi area of Abuja, Miss Easter Oko who spoke to LEADERSHIP lamented high cost of food stuff which she blamed on cost of logistics occasioned by high cost of fuel, gas and others.
She said, “Before now the price of vegetables are very low but now everything is high, its either the sellers reduce the size of the vegetables and even other food stuff or they increase the price. On our side we don’t have increased income which means we opt for the reduced size and what that means again is that we have less portion of our meals”.
National president, Agricultural Produce Sellers Association of Nigeria(APSAN), Comrade Aloys Akortsaha who attributed the food inflation to multiple taxation, high price of farm input, increase in the transportation of agricultural produce and the effect of Ukraine-Russia war said government must rehabilitate the nation’s refineries, subsidies inputs for farmers to reduce cost of production and marketing.
He said, “The food items in the markets are costly because of the high cost of transportation, multiple taxation of which some are illegal and the effect of Ukraine-Russia war which is a global challenge too.
The high cost of transporting food to selling destination is very high. For instance a bag of orange is N3,000 in Benue State but will cost you about N10,000 to transport it to Kano and since the dealers are in for profit, the price goes up”.
Again apart from the government imposed taxes, there are other illegal and multiple taxes imposed by some elements on farmers and dealers and by the time they pay all these taxes, they have no option than to jerk the price of food up.
Fertiliser is also an issue of concern to farmers, for instance a bag of Urea was selling at N9, 500 before but now due to shortage of raw materials from Russia, the price is now at about N18, 000,” Comrade Akortsaha added.
“Government must look for how to rehabilitate our refineries and subsidies cost of producing agricultural products for farmers nationwide”, he stated.
Athough federal ministry of agriculture and rural development recently given approval to All Farmers Association of Nigeria (AFAN) to procure 500,000 units of tricycles, popular-
ly known as Keke-Napep to ease the conveyance of food and agricultural products from farms to markets across Nigeria and help deal with the challenges of high cost of transportation.
But its in the known that these units is insignificant to holistically address the challenges of high cost of logistics considering the Nigerian population of which about 70 percent engage in farming.
In the same vein, national president of Potato Farmers Association of Nigeria (POFAN), Chief Daniel Okafor said for more food to be produced to fight against high cost of food, “Government will see to the provision of incentive to farmers, such as planting materials, fertilizers etc and must be grossly subsidised”.