Agriculture analysts have described 2023 as a challenging year for farmers, stakeholders, and consumers in the agriculture sector, who have faced a number of headwinds. These include rising production costs, food inflation, and global market forces, which have been impacted by the ongoing Russia-Ukraine war. In addition, insecurity and disruptive government policies have further added to the challenges facing the sector.
Analysts believe that the current situation, with rising prices and declining production, is making it difficult for farmers to earn a decent living and for consumers to access affordable food. They say that this trend is likely to continue into 2024, unless significant interventions are made to address the underlying issues.
The rise in food inflation has put additional pressure on consumers, many of whom are already struggling with the economic challenges facing the country. In November 2023, the food inflation rate in Nigeria rose to 32.84 per cent, up 8.72 per cent from the previous year. This was driven by an increase in the prices of staple food items such as bread and cereals, oils and fats, potatoes, yams, and other tubers, fish, fruit, meat, vegetables, and coffee, tea, and cocoa.
In Nigeria, the agricultural sector plays a significant role in the economy, with a major contribution to the country’s GDP. In the second quarter of 2023, agriculture accounted for 21 per cent of Nigeria’s GDP, with crop production being the largest contributor. This is not surprising, given that agriculture is a major source of employment and livelihood for many Nigerians. In fact, agriculture provides a livelihood for over 70 per cent of the population, and is a key driver of the rural economy. The sector is also vital for food security, as it accounts for over 80 per cent of food consumed in the country.
While there have been some efforts to develop the agricultural sector, such as the government’s Anchor Borrowers’ Programme and other initiatives, reports have shown that these efforts have not been enough to meet expectations. One of the main reasons for this is the lack of investment in the sector. A report by the World Bank found that agriculture receives only about 1 per cent of total public investment in Nigeria, despite the sector’s potential to contribute significantly to economic growth and employment. This lack of investment has been identified as one of the most pressing challenges facing the agricultural sector, and it will need to be addressed if the sector is to meet its potential.
As food prices continue to surge, it is predicted that food security challenges will persist, further reducing Nigeria’s ability to achieve the United Nations Sustainable Development Goal of zero hunger by 2030. This prediction was made in the 2023 Crop Production Report released by AFEX – Africa’s leading commodities player, highlighting food insecurity and food inflation as a major challenge facing the country. The report noted that a shortage of 5.7 million metric tonnes of food products is expected across human consumption and agro-processing, while food inflation has reached a historic high of 32.84 per cent.
The AFEX crop production report provides insights on six key agricultural commodities – maize, paddy rice, soybean, sorghum, cocoa, and sesame. The report leverages farmer surveys and transaction-level data to track key information on crop production, price performance, and market dynamics.
With respect to pricing, the report forecasts an increase in prices for all the commodities covered, based on a general decline in production and increasing demand from both processors and exporters. Rice prices are expected to rise the most, due to a decline in production caused by flooding and India’s ban on rice exports.
Also highlighting the seriousness of Nigeria’s severe food security crisis is a report which showed that the country’s Global Hunger Index score remains alarmingly high, ranking 109th out of 125 countries, indicating a severe food security crisis. The report echoes the recent forecast by the Food and Agriculture Organisation (FAO), which predicts that in 2024, about 26.5 million people in Nigeria will be struggling with food insecurity. This is a sobering statistic, and highlights the severity of the food crisis in the country.
Commenting on the situation, Ogbo Joseph Doughlas, president of the All Farmers Progressive Association, remarked that President Bola Tinubu’s declaration of a state of emergency on food security in Nigeria was premature and without sufficient consideration of viable solutions. He stated that while the declaration may have been well-intentioned, the lack of preparation and commitment from key players in the agricultural sector has rendered it merely ceremonial.
Doughlas called for more concrete actions to be taken to address the issues facing the agricultural sector, rather than merely declaring a state of emergency without a clear plan for action.
Doughlas noted that the players in the Federal Ministry of Agriculture and Food Security are giving more attention and engagement to what he termed “political farmers” rather than real farmers. According to him, these political farmers have direct access to the government and are often treated as representatives of the agricultural sector, despite not being engaged in actual farming activities. This, he said, has led to a misallocation of resources and support from the government, with real farmers being left behind. He pointed out that if the funds committed by the previous government to the agricultural sector had been put in the hands of real farmers, the price of rice would not have reached as high as N50,000 per bag.
Doughlas further noted that the Nigerian government has not taken any concrete steps to address the issue of insecurity, which has been a major factor contributing to food shortages in the country. He said that the lack of security has made it difficult for farmers to access their farms and has caused many to abandon farming altogether.
Going forward in 2024, he urged the government to refocus its efforts on supporting real farmers and to ensure that the resources and support available are directed towards the right people. He also emphasised the need to improve the agricultural sector’s infrastructure and create a conducive environment for farmers to thrive.
“Until they will be able to identify with real farmers, the issue of food security cannot be solved,” he said.
He also called for the government to put in place measures to address the security situation, such as increased security patrols in rural areas, and for the government to engage with the local communities in order to better understand and address the root causes of the insecurity.
According to Cordros Securities, a leading financial services company, the agriculture sector suffered a negative growth that was induced by the Central Bank of Nigeria’s (CBN) naira redesign. It noted that the sector’s growth slowed during the third quarter, as various challenges impacted its performance. These challenges include persistent insecurity in the country’s food-producing belt, which has made it difficult for farmers to access their farms and produce crops; higher input costs, such as fertiliser and fuel, which have increased the cost of production; and rainfall deficits, which have reduced crop yields. As a result, the agriculture sector’s performance has weakened and this is expected to continue into the fourth quarter and into 2024 if these challenges are not addressed.
Cordros analysts believes that the growth of the agricultural sector will continue to face challenges in the near term, as insecurity remains a major issue in the country, particularly in the northern region, which is home to many of the country’s agricultural activities. This insecurity has led to disruptions in farming activities and has also increased the cost of inputs, such as fertiliser and seeds. They also observed that high input costs remain a major concern for farmers, as the cost of inputs such as fertiliser, pesticides, and seeds has increased significantly in recent years. These factors are expected to continue to weigh on the sector’s growth in the near term, and Cordros believes that the government needs to take steps to address these challenges.
To improve the sector’s growth prospects, Cordros suggests that the government should prioritise efforts to address the security situation in the country, as well as invest in climate-resilient agriculture and measures to mitigate the impact of pests and diseases.
