+Food Inflow: Pressure on Farmers’ Profits
The Federal Government of Nigeria has begun a 150-day duty free import window for the import of maize, rice paddy, wheat and cowpeas (beans). The move is meant to curb rising food prices and increase supply of these staples.
However, the porosity of the Nigerian borders could lead to increased undocumented outflow of agric produce through the Nigeria border states, and this might cancel out the aim of the policy.
According to NBS data on Inflation, the prices of food have increased by 15.62% points within a year. It rose from 25.25% in June 2023 to 40.87% in June 2024. The situation is worse in border states.
The government expects this policy to increase the supply and decrease the price of these staple products in the market.
Yet, it could lead to market complications in the agriculture value chain – the drop in prices may discourage local production of these staples and reduce employment in crop production.
Food Outflow: Pressure on Food Prices
The 150-day duty-free import of staples assumes increased significance in its potential to counterbalance the undocumented outflow of foods through Nigeria’s land borders.
The average food inflation in Nigeria’s 17 border states is higher than that in the landlocked states, indicating reports of farmers preference to sell their produce in more valuable currencies after the Naira devalued.
The NBS data on Food Inflation already shows that almost all the 17 states in Nigeria around the border have the highest month-on-month food inflation especially in the month of June.
“In the month of June, Nigeria’s border states had a higher month-on-month food inflation rate at 3% compared to 2.4% in landlocked states,” a Dataphyte Data Card reads.
Most of these border states are classified as the food belt of the country, and the cross-border sale of food might be upending the normal food price stability in the states.
Month-On-Month Food Inflation Rate across the States in Nigeria, June 2024
In Nigeria, staple foods such as cereals (rice, wheat, oat, and corn), legumes (lentils and beans) and tubers (potato and yam) account for about 90% of the people’s food calorie intake.
In the last 5 years, the domestic demand/consumption of staple farm produce, especially rice, wheat, and corn, has been on the increase.
The market has not been able to fully meet the country’s demand for these staple products, as domestic production, although slowly rising, is not commensurate with the country’s rapidly growing population.