OLUKAYODE OYELEYE
THE currently low prices of agricultural commodities, especially staples, in the market is due to federal government’s manipulative policies. This, according to feelers, has been deemed unsustainable as it may only achieve short-term gains in government’s narratives and on consumers while negatively impacting the active participants in the value chain that should sustain the availability of those crops. According to feedbacks from agricultural commodities markets, the currently lower food prices are not sustainable as they are not particularly a result of higher production but as a result of short term tactical intervention that encouraged massive importation of grains under the federal government’s window opened in the second half of 2024.
This arrangement enabled importation of food items flooding the market at cheap prices capable of crippling local producers and discouraging local production in many years ahead. This has been described as a disincentive to local producers. According to a market watcher who spoke from the grains market in Maiduguri, those stocking grains presently should do less of stocking because there is little prospect of prices going up anytime soon. The implication of that is that feedback on lowered prices and reduced offtake by buyers in the market will be transmitted to the farmers, which are primary producers. This might discourage them from producing much or producing at all in the next farming season, or may motivate them to switch into other crops of less risk of price fluctuations.
Nigeria may thus be entering into a phase of unpredictable cyclical glut and scarcity as farmers become more wary and unsure of prices of their produce in the market. The Maiduguri market watcher observed that, because naira is now weaker than the CFA, those traders from neighbouring francophone countries of Cameroon, Chad, Niger and Benin Republic now come to northern Nigeria to buy grains in large quantities in a cross border trade that is hardly captured in any official trade statistics, either in those states or at the Federal Office of Statistics.
The hitherto purported food surplus in the north before the CFA overtook the naira in value was a false narrative as traders in those countries were purportedly selling grains to Nigeria to earn higher incomes. The falling naira value has flipped the game and has put Nigerian farmers in a dilemma. According to a retired high ranking federal civil servant and agriculturist, who currently cultivates grain crops in the Federal Capital Territory, “this is the real truth. Farmers are impoverished and it will take a long time for agriculture to pick up.”
Drawing from his recent personal experience, the retired federal agency boss disclosed his family’s financial losses from grain storage in 2025. According to him, the retirement benefits invested in purchasing cowpeas for storage has led to a huge loss as the price dropped precipitously after the grains were purchased. “Businessmen who usually engage in stocking grain are in trouble,” he said.
Absence of government’s price monitoring system or a guaranteed minimum price (GMP) is putting the producers and stockists in a precarious situation. Without surveillance, the entire business of grain production, storage, distribution, logistics and sales will remain in the realm of speculation as price instability will keep farmers in a quandary. This will discourage consistent annual production of grains in particular, creating a scenario that will suddenly lead to unexpected price increases as stockists who manage to store for much longer will take advantage of scarcity to sell at exorbitant prices. The bottom line is that the currently low prices of grains in Nigeria now is not sustainable and does not represent the true picture of excess production. It is only masked by the 2024 policy of the federal government to open a window for massive food importation, which has succeeded in dampening the prices of what local farmers produce.
Since some risk takers could brave all the odds and still store large quantities of grains in anticipation of a rise in prices, it was surmised that unsold stocks that stay for too long in store may go bad, leading to increase in post-harvest and storage losses. This will further reduce the quantum of food that should have been available to final consumers.
Dr. Olukayode Oyeleye, Business a.m.’s Editorial Advisor, who graduated in veterinary medicine from the University of Ibadan, Nigeria, before establishing himself in science and public policy journalism and communication, also has a postgraduate diploma in public administration, and is a former special adviser to two former Nigerian ministers of agriculture. He specialises in development and policy issues in the areas of food, trade and competition, security, governance, environment and innovation, politics and emerging economies.
