Through agriculture, we are able to have food and energy to face life and maintain healthy living. Adequate access to food has to be made available in terms of affordability, quality and quantity.
How inflation in Nigeria affects agriculture and food security
Agriculture plays a vital role in the life of man.
In Nigeria, inflation has been the major topic in the news for months. It certainly has a negative impact on businesses of different sectors and also consumers. In simple terms, inflation is simply a rise in prices of goods and services.
Recently, Nigeria's economy revolves around the petroleum sector. Prices of petroleum and petroleum products affect the prices of goods and services.
With hikes in prices of petroleum products, goods and services will be unstable especially food prices because price plays a crucial role in people accessing food.
Citing a poor household, they will face a significant risk of choosing foods or consuming food below critical level, in regards to health and survival. In the long run, this level of living will lead to malnutrition and worst case starvation.
Inflation is not just limited to consumers but producers also. In the agricultural sector, commodity prices generally rise during inflation.
The higher the commodity prices, the higher the demand for farm products like; farm tools, seeds, livestock etc, thus putting upward pressure on input prices which have placed significant economic and psychological pressure on farmers.
Due to this, some agricultural producers are unable to cope and are left with few alternatives like; stopping the business, selling out to larger producers or settling to use the farm produce for internal use only. This in turn affects the overall purchasing power of farm resources and reduces the channels for consumers to access food.
Undoubtedly, the effect of inflation on agriculture is negative, particularly food producers because most of them derive their income from food production as food price increases are not reflected in higher farm gate prices.
The rise in the price of food doesn't necessarily increase the real incomes of food producers. It's because such a phenomenon may not induce a downward shift of the supply curve in the long run due to lack of short-term incentives to invest, innovate, acquire and adopt technical improvements that could boost food supplies.
World Bank predicted that “the rising prices of food items in the country could push an additional six million Nigerians into poverty.” This prediction is true as Nigerians experience heavy weight of inflation without an increase in their salaries.
A recent survey conducted in Lagos and Ibadan markets revealed that a 50-kg bag of imported rice is between N24,000 and N26,500 respectively, while locally refined rice is around N25,000 - N27,000 respectively.
Brown beans of 50 kg are 37000 and 4000 respectively. Tomatoes of 25kg which were 4,000 now are 9,500 respectively. Palm oil of 25 litre was 14,000 - 17,000 respectively, now it is 20,00 - 25,000 respectively. Yellow garri of 50kg is 22,000 while white garri 50kg is 17,000.
Meanwhile, most of Nigerians' incomes haven't changed, decreasing the number of purchasing power and value of naira is practically of little value compared to other foreign currencies.
However, the present hike in food prices is likely to derail Nigeria‘s path towards achieving the Millennium Development Goal (MDG) one on hunger targets.
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