The challenge of feeding well has been with us for some time now. The story has centred on high prices of food. The economics lexicon ‘food inflation’ has never left the lips of our economists. The challenge have been insecurity brought about by poor storage infrastructure, the menace of Boko Haram, herders/farmers conflict, cattle rustlers, kidnappers, etc. and the deadly COVID-19.
Let us go memory lane and draw on the example of COVID and its negativity.
The Alliance for a Green Revolution in Africa (AGRA) came out with a report on how agribusiness was faring in AGRA-focused countries in its COVID-19 Situation Report. According to the report, in Nigeria, where there were over 50,000 cases of COVID-19, the government continued to put in place support for the agricultural sector. The report says a new rule published by the Central Bank of Nigeria (CBN) “is lifting the ceiling on funding for agribusinesses by pegging the debt they can raise to their equity, raising the limits to 40 per cent of investee company’s equity subject to a maximum of N2 billion and for up to 10 years”.
The AGRA report adds that the Central Bank expects this to improve access to affordable and sustainable finance for agri-businesses, medium and small businesses (MSMEs), create employment opportunities in Nigeria, and boost the managerial capacity of agri-businesses and MSMEs to grow their businesses, develop the sector and promote inclusive growth.
It also adds that in Kenya, various studies on the impact of COVID on SMEs are reporting depressed demand, difficulty to pay salaries, loan defaults and low cash flow positions and that “there is need for the speedy operationalization of the SME credit guarantee scheme by the Ministry of Finance”.
The report notes that the food security picture remains mixed in AGRA focus countries saying: “The AGRA July Food Security Monitor reports that 15 African countries have been identified as “hunger hotspots” where the food security situation is significantly deteriorating, mainly as a result of the COVID-19 pandemic.
“In West Africa, in Nigeria, the COVID-19 pandemic has contributed to the reduced purchasing power of the Naira. In Burkina Faso, Mali and the Niger, COVID-19 continues alongside conflicts and difficult security situations, contributing to food insecurity.”
An outstanding good news in the report is that “… the launch of the AfCFTA secretariat in Accra and the creation of a single tariff-free $3tn market is vital to helping Africa – and African agribusiness – to support itself to bounce back better”.
According to the report, across Africa, 15 countries have been identified by the FAO and WFP as hunger hotspots where food security situations are significantly deteriorating, mainly as a result of the COVID-19 pandemic which has triggered knock-on effects that are pushing people into severe hunger. “These include reduced household purchasing power that is impacting on food access, disruptions in supply chains affecting the movement of food to areas of needs and the movement of inputs to production areas, limited safety nets to protect the vulnerable populations, and multiple existing risks such as persistent armed conflict and insecurity.”
So with subsidy removal, Nigeria now has an overwhelming burden that needs to be addressed frontally. The declaration of a state of emergency on food security by President Bola Tinubu is therefore a welcome move.
He did this sequel to observed food inflation across the 36 states of the federation and Abuja.
The Special Adviser to the President on Special Duties, Communication and Strategy, Dele Alake, disclosed these to newsmen in Abuja after a meeting of stakeholders on agriculture and food production value-chain at the State House. Giving details of the presidential intervention on food security, food pricing and sustainability, Alake disclosed that measures in the action plan would include an immediate release of fertilizers and grains to farmers and households to mitigate the effects of the fuel subsidy removal.
He also said the president approved that all matters pertaining to food and water availability and affordability, as essential livelihood items be included within the purview of the National Security Council.
Alake added: “While availability is not a problem, affordability has been a major issue to many Nigerians in all parts of the country. This has led a significant drop in demand thereby undermining the viability of the entire agriculture and food value chain. Accordingly, in line with this administration’s position on ensuring that the most vulnerable are supported, Mr. President has declared, with immediate effect the following actions:
“That a state of emergency on food security be announced immediately, that all matters pertaining to food and water availability and affordability, as essential livelihood items, be included within the purview of the National Security Council.”
On steps to be taken to give effect to the president’s order, Alake said a number of initiatives would be deployed in the immediate, medium and long terms, adding that goals to be achieved have been marked.
According to him, some of the steps to be taken would include all-year round farming, the creation of special purpose vehicles, like the commodity board, to liberalize the food production value chain, the immediate activation of land-banks across the country, as well as putting an end to the age-long and problematic nomadic animal husbandry, which would be replaced with government-managed ranching.
Said he: “We will immediately release fertilizers and grains to farmers and households to mitigate the effects of the subsidy removal. There must be an urgent synergy between the Ministry of Agriculture and the Ministry of Water Resources to ensure adequate irrigation of farmlands and to guarantee that food is produced all-year round. As a country, Mr. President has made it clear that we cannot be comfortable with seasonal farming. We can no longer afford to have farming down times. We shall create and support a National Commodity Board that will review and continuously assess food prices as well as maintain a strategic food reserve that will be used as a price stabilization mechanism for critical grains and other food items. Through this board, government will moderate spikes and dips in food prices.”
He added, “To achieve this, we have the following stakeholders on board to support the intervention effort of President Bola Ahmed Tinubu: The National Commodity Exchange (NCX); Seed Companies; National Seed Council and Research institutes; NIRSAL Microfinance Bank; Food Processing/Agric Processing associations; private sector holders and Prime Anchors; small holder farmers; crop associations; and fertilizer producers, blenders and suppliers’ associations, to mention a few.”
Alake further said, “We will engage our security architecture to protect the farms and the farmers so that farmers can return to the farmlands without fear of attacks.
“The Central Bank of Nigeria will continue to play a major role of funding the agricultural value chain—activation of land banks. There are currently 500,000 hectares of already mapped land that will be used to increase availability of arable land for farming, which will immediately impact food output.
“Mechanization and land clearing- The government will also collaborate with mechanization companies to clear more forests and make them available for farming
“River basins- there are currently 11 rivers basins that will ensure planting of crops during the dry season with irrigation schemes that will guarantee continuous farming production all year round, to stem the seasonal glut and scarcity that we usually experience.
“We will deploy concessionary capital/funding to the sector especially towards fertilizer, processing, mechanization, seeds, chemicals, equipment, feed, labour, etc.
“The concessionary funds will ensure food is always available and affordable thereby having a direct impact on Nigeria’s Human Capital Index (HCI). This administration is focused on ensuring the HCI numbers, which currently ranks as the third lowest in the world, are improved for increased productivity.
“The cost of transporting agricultural products has been a major challenge (due to permits, toll gates, and other associated costs). When the costs of moving farm produce is significantly impacted, it will immediately be passed to the consumers, which will affect the price of food- the government will explore other means of transportation, including rail and water transport, to reduce freight costs and in turn impact the food prices.
“The government will change the way we have been doing livestock business, away from the archaic method to the modern way acceptable worldwide.
“We will establish ranches in collaboration with state governments and the federal government will pay for the land.”
Alake also disclosed that the targeted gains of the president’s emergency declaration on food production and distribution included increased job creation and food abundance and security.
Siaka MOMOH