Much Ado About Price Hiking of Agricultural Produce

Agri

By Adamu Tilde

In the build-up of the 2015 election, my immediate older brother supported the candidacy of President Jonathan. Realizing that he has no prospect of getting anything at both federal and state governments, given that PDP lost the election at both levels, he delved into rain-fed farming. It was his first experience farming anything as an economic activity. Luckily for him, Maize and Rice fetched a premium price that year. He doubled the investment in 2016 so much that he produced more than 1000 sacks of Maize, Rice, and Beans. I will come back to this later. However, in December 2017, there was a policy directive that gave waiver to a certain company to import Maize. That singular decision crashed the price of Maize in 2018 and the effect spillover into 2019. My brother has abandoned farming for good in 2020.

The import of the above anecdote is to point out what drives economic activity and human motivation. My brother ventured into farming to make a profit. If he had wanted to do charity work he would have joined any non-profit organizations. And when he realized nothing was forthcoming (at least from his experience) he abandoned it for something better.

The hue and cry on price hiking of agricultural produce we are currently dealing with is a misplaced agitation. I am not being insensitive to the plight of the many who may not be as fortunate and lucky as I am. By the way, the last time I received my salary was in May. So, in a way, I am also a victim. Basic economics should tell us that what drives investment in any business activity is the prospect of profit. Part of the reason why we abandoned agriculture in the 70s is that oil exploration is more profitable.

My brother opted for another venture in 2020 because Maize didn’t fetch premium prices in 2018 and 2019. And that happened because we allowed the importation of cheap Maize from countries that highly subsidized agriculture. That we are witnessing continuous investment in Rice milling all over the country is because of the prospect of profit in the endeavour. There must be sufficient incentive and prospect of profit in agriculture to attract investment into it. And profit can only come when agricultural produce fetches premium prices. And premium price can only come when there is high demand. And demand is the chief motivator for investment. So our yearning for food security, self-sufficiency, value addition, and processing can only come when agricultural produce continues to fetch premium prices. The agitation for the reduction in the prices of agricultural produce is a misplaced protest, and praying for the prices to go down is a misdirected endeavour. Ours is to strive hard to improve our productivity and reign in our expenditure. Alternatively, the government can introduce another policy that would lessen the suffering in the land but import of agricultural produce is not an option.

It’s on this note that I am appealing to President Buhari to overrule the poorly thought policy directive that gave waiver to WACOT, Premier Feeds Mills Company Ltd, Chi Farms Ltd, Crown Flour Mills Ltd to import Maize. That policy is counter intuitive to your administration’s effort to achieve food security and it would lead to a reversal of the gains made in the agricultural sector.

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