Rising Transportation Costs Hurt Farmers, Food Processors

  • Rising Transportation Costs Hurt Farmers, Food Processors

Farmers and food producers are raising the alarm that the cost of moving produce is getting higher.

The increase in trucking costs is being blamed on some factors such as unavailability of trucks, bad roads and high fuel costs.

For instance, in Iseyin, Oyo State, a cassava production belt, the cost of moving 30 tons of cassava has moved to N15,000, from N10,000 two years ago.

It was learnt the situation is of major concern for consumers and produce growers.

This has pushed up operating costs for farmers, who would then pass the additional costs to consumers.

Expressing concern, the country coordinator, African Agricultural Technology Foundation (AATF) Cassava Mechanisation and Agro-processing Project (CAMAP), Mr. Ayodele Omowunmi, said farmers in Igunrin Village, Iseyin, are finding it costly to move their cassava to The Allied Atlantic Distilleries Ltd (AADL) at Igbesa in Ogun State where their tubers can be processed to ethanol.

AATF is an international programme working with smallholder and commercial farmers from Ogun, Oyo, Osun, Kwara and Kogi states, to deploy machines to assist them in improving the cassava value chain.

AADL is the first and largest cassava-based ethanol producing plant in Africa. It has an installed capacity of 10 million litres of ethanol per year and requires 240 tons of cassava daily at an average of 10 tons per hour.

He said CAMAP facilitated the partnership between the farmers and the company to ensure steady daily supply of cassava to meet up with the requirement.

He urged the government to assist farmers through the provision of adequate vehicles to transport cassava from the farm to promote the growth of the business.

The Chief Executive, Natural Nutrient Limited, Sola Adeniyi, said rising freight costs as a reason for lower profit margins with more pain as vehicles break and higher diesel prices make it even more expensive to transport farm produce to the market .

Adeniyi said high transportation costs hurt profits, preventing them from taking advantage of lower commodity prices.

According to him, the benefits that should trickle down to the farmers are locked down by high cost of transportation, which eats into their profits.

The National Publicity Secretary, National Cashew Association of Nigeria (NCAN),Anga Sotonye, said most of the agro commodities containers coming into the ports are not attended to in time thereby affecting timely shipments.

According to him, it is one thing to aggregate agro exports for onward movement to the ports, but moving goods through the road to the port is the bigger challenge.

He urged the government to tackle the situation on Apapa port access road, adding that its conditions are an obstacle.

Sotonye complained that the ports have recorded slow turn around times.

He said the road users were fed up with delays that have stretched for several days.

The Group Managing Director, Niji Group, Kola Adeniji, said there are challenges facing food supply chain.

According to him, things are becoming stretched across food supply chain and current logistics thinking is no longer fit for purpose.

He explained that the transport infrastructure that are dilapidating is bringing challenges to food manufacturers and logistics companies.

Meanwhile, the Oyo State Executive Council said it has approved the rehabilitation of the 65km Moniya-Ojutaye-Iseyin Road for the sum N6,952,565,074.97.It said the project is expected to be completed in 18 months.

The Commissioner for Information, Culture and Tourism, Mr. Toye Arulogun, said the 65km road had been awarded to M/S Oladiran Engineering and Trade Nigeria Limited, explaining that the contractor was picked after careful evaluation of both technical and financial responsiveness by the state Consultants on Road Projects under the leadership of Reyog International Nigeria Limited.

He pointed out that 30 per cent of the contract sum will be paid to the contractor as advance payment subject to the provision of an open-ended advance payment guarantee from a reputable bank.

Arulogun maintained that the road will boost both intra and intercity transport links, improve trade, drastically reduce intercity transport connection, encourage trade and investment as well as to generally bring about better socio-economic development to the citizenry.

He noted that this is in line with the Governor Abiola Ajimobi’s philosophy to decongest traffic at all entrances and exits to the state as part of the massive infrastructural development going on in the state.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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