Role of agritech in easing rising food prices in Nigeria

THE Nigerian food crop production sub-sector value chain is characterised by weak and inefficient producer-market/consumer linkages due to poor infrastructure. The sector is overburdened by the lack of improved processing facilities, low farm productivity, poor post-harvest handling and storage, expensive and poor access to inputs (high quality seeds, fertilizing and crop protection products), inadequate market information, lack of transparency among players, low capacity to meet quality standards, and limited distribution networks. This has adversely impacted productivity, resulting in low income for farmers and high price of food for consumers in Nigeria. With the Nigerian population growing at 3.1 per cent per annum, and estimated to reach 400 million by 2050, enhanced agricultural productivity through adaptation of new technologies and innovation is necessary to ensure food and nutrition security, especially for the poor and the vulnerable. Tremendous support is required from all private sector participants in the crop productivity value chain, including efforts by the federal and state governments in achieving this goal.

According to Statistica, between January and March 2021, agriculture contributed to 22.35 percent of the total Gross Domestic Product (GDP) of Nigeria. Although over 70 percent of Nigerians engage in the agricultural sector, they mainly operate at a subsistence level. Despite the contribution to the economy, Nigeria’s agricultural sector faces many challenges which impact on its productivity. These include poor land tenure system, low level of irrigation farming, climate change and land degradation. Others are low technology, high production cost and poor distribution of inputs, limited financing, high post-harvest losses and poor access to markets. These challenges have stifled agricultural productivity, thereby affecting the sector’s contribution to the country’s GDP as well as increased food imports due to population rise, hence declining levels of food sufficiency. For instance, between 2016 and 2019 Nigeria’s cumulative agricultural imports stood at N3.35 trillion, four times higher than the agricultural export of N803 billion within the same period.

The Consumer Price Index (CPI) for food, which measures the average change over time in the prices paid by urban consumers for a representative market basket of consumer goods and service, has been on a steady increase in Nigeria in the past few years. In July 2021, the CPI of food in Nigeria stood at 477.2. The increase becomes obvious when you compare the 2021 figures with figures from the same period in July 2020 (369.5) and July 2019 (319.9), or even the values in January 2019 (298.9). This shows a 37.3 percent increase from January 2019 to July 2021. The impact of these numbers on living standards, quality of life, and nutrition become obvious when you consider data from the Nigeria Bureau of Statistics (NBS), which shows that an average Nigerian spends over 57 per cent of their income on Food alone. (Transportation: 6.4 per cent, Health: 6.2 per cent, Education: 5.9 per cent, Services: 5.53 per cent, Rent: 5.28 per cent, Fuel: 5.01 per cent, and Entertainment: 1.07 per cent). According to the World Bank, the growing increase in food prices could push additional six million Nigerians into poverty, calling on the government’s attention for short-term policies to support welfare.

The summary of the aforementioned statistics suggests that the share of Nigerians living below the national poverty line could have increased from 40.1 percent to 42.8 percent due to the food price inflation witnessed between June 2020 and July, 2021. President Muhammadu Buhari’s recent claim that food price increases are as a result of artificial shortages created by middlemen who have been buying and hoarding these essential commodities because according to him, our food production capacity has increased, might be too simplistic. Several other factors are at play, including increasing electricity costs, cost of fuel, transportation and the current insurgencies bedevilling the country, especially in the North and in some agricultural states, are all contributory to the rising food prices.Some of the greatest problems confronting rural farmers and communities in Nigeria are absence of critical infrastructure such as motorable roads, storage facilities and irrigation facilities. A few days of rainfall, most farming areas and markets become totally impassable, impacting negatively on the prices of food items across the country. It has been shown that farmers who have access to bigger markets, on average, produce high crop yields.

Infrastructure required to further process or store excesses are lacking. Post-harvest losses in Nigeria are huge due to inadequate storage facilities. Huge investments are required in the country’s primary agriculture infrastructure to enable the transition into a sustainable process of economic growth and development. In the absence of such needed infrastructure, the ability to move food quicker from the farm to the consumer becomes a greater imperative. Technology like agritech can reduce the huge infrastructure gap and enhance the ability of farmers to directly access many consumer markets.

Agritech products such as Big A, an innovative e-commerce platform that creates cash value to crop or produce for farmers by providing real-time access to consumers and consumer markets, can ameliorate the pains of farmers, resulting in the reduction of food prices. Officially available since December 25th, 2021, Big A’s platform brings farmers and farm produce aggregators to various customers and customer segments: processors, wholesale buyers, retail buyers, restaurants/hotels, and individual buyers.

Agritech innovations such as this creates value by eliminating multiple factors affecting farmers, including greater market access, activities of profiteering middlemen, control of prices, access to financing by pooling transaction data and performance histories that were previously unavailable, farmer education and opportunities in food packaging, processing, storage, and export opportunities.

• Umeseaka writes in from Lagos