Low Purchasing Power Limits Sale of Agro Products

purchasing power
  • Low Purchasing Power Limits Sale of Agro Products

Escalating prices and low purchasing power of consumers are leading to poor sales and capacity utilisation in the agriculture sector of the economy.

An entrepreneur in the sector, Mr. Abiodun Oladapo, told our correspondent that the cost of production had become so high that farmers were being forced to increase prices while those who could not cope had decided to withdraw from the sector completely.

According to him, the result is that prices of farm produce and livestock have risen so high that they are becoming unaffordable for many consumers.

For instance, he said, “The cost of a bag of fertilizer is N10,000 against the N2,000 that it was sold last year. Last year, corn used in poultry feed cost N50,000 per tonne, now it sells for N150, 000 per tonne.

“Prices have become so high that people no longer patronise farmers. Also, a good number of people have withdrawn from the sector.”

Oladapo added that while there was a lot of emphasis on the export of agricultural produce, the cost of production had made it difficult for practitioners to compete in the export market.

“The cost of producing cassava chips in China is less than the price of chips in Nigeria. How then can we export cassava chips to such a country?

According to him, in addition to high prices, exporters are also faced with indiscriminate port charges and multiple government agencies making the business of exporting a nightmare.

“There is too much regulation. You have the National Agency for Food and Drug Administration and Control, Standards Organisation of Nigeria and the rest of the agencies. They are not there to help the exporters but to make things more difficult for them,” he said.

As a way of addressing the food crisis, Oladapo advised the government to encourage local production of fertilisers instead of leaving it in the hands of importers.

“It is only in Nigeria that government leaves food security in the hands of private individuals. That is not what obtains in advanced countries and other African countries,” he said.

Speaking on the scarcity of fertilisers, the Senior Special Adviser to the Minister of Agriculture, Dr. Olukayode Oyeleke, attributed the development to the insecurity situation in the country and efforts by the government to ensure that fertilisers did not get into the hands of terrorists.

He said that since it was established that terrorists were using fertilisers to manufacture explosive devices, there had been close checks on both the distributors and buyers of the product to ensure that they did not supply same to terrorists.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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