‘Production Cost Remains High Despite Crash in Food Prices’

AgribusinessU.K. Wheat Harvest Using New Holland Agriculture Farming Machinery. Matthew Lloyd
  • ‘Production Cost Remains High Despite Crash in Food Prices’

Operators in the agricultural sector have complained about the high cost of production even though the prices of products such as palm oil have reportedly crashed.

The Chairman of Comtrade Group, an agro-allied firm, Mr. Abiodun Oladapo, said that the crash in the prices of agricultural products was not to the advantage of farmers since farming inputs and other factors of production such as diesel, animal feed, seed and fertilizers were exorbitant.

Reports had revealed that the price of palm oil went down from N30,000 per 30-litre keg in December 2017 to as low as N8,500 in places like Akure.

The Chairman, Ikeja Shop Owners Association, Mr. John Okonkwo, informed our correspondent that the product sold for between N14,500 and N14,000 in Ikeja.

He said the price of tomatoes also dropped from N12,000 a basket to about N6,500.

Oladapo lamented that the gains from the sector were very minimal compared to the amount of money practitioners invested in it.

According to the National President, Cassava Growers Association of Nigeria, Segun Adewumi, the cost of planting and harvesting cassava, for instance, was higher than the price that was being offered by buyers for the produce.

He said because of this, most farmers had refused to harvest their roots, choosing instead to leave them in the ground to rot.

The President, Nigerian Association of Small and Medium Enterprises Cooperative Multipurpose Society, Mr. Adams Adebayo, pointed out that farmers were exposed to a lot of risks.

He confirmed that the cost of inputs and harvesting was so high that it was difficult for farmers to make enough money to pay back loans that they borrowed from the banks.

Farmers also said they were at a loss and completely vulnerable when natural disasters such as flood and fire strike.

A farmer in Jos, Plateau State, Nandul Durfa, owner of Daje Palm Oil Farm, was reported to have lost 10 hectares of palm oil plantation to fire recently. He lost more than 4,000 palm trees, 4,000 seedlings for planting, 500 cashew trees and 200 mango trees after rat hunters set fire to the bush to smoke out rats, reports from the Lagos Chamber of Commerce and Industry’s agriculture whatsap platform indicated on Wednesday.

Describing the loss as devastating, Durfa was quoted to have said, “I have lost hundreds of millions of naira to the inferno. Palm trees are resilient; if you water the burnt trees consistently, they could come back to life but this year’s proceeds are gone.

“We spend an average of N40,000 every month to treat and maintain the new seedlings. It is difficult to quantify the financial loss and the psychological trauma.”

Adebayo lamented the fact that the Nigerian Agricultural Insurance Corporation did not make provision for farmers or their produce.

He said since the price of the produce was cheaper and purchasing power of consumers had dropped, farmers were not getting anything for their labour, adding that it would be helpful if marketing boards could regulate the prices of farm produce so that farmers would not lose so much.

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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