Dr Ikechi Agbugba is an economist and pioneer of the Brain Re-engineering Initiative.
- Could you elaborate on what factors individually contributes to both high prices and volatility?
May I state that these variables are important and closely linked to the key causes and possible solutions to rising food prices and volatility in Nigeria, among other countries of the global south.
Truly, high prices and volatility in Nigeria are driven by a complex interplay of factors, such as exchange rate fluctuations, supply chain disruptions, rising energy costs, insecurity, and government policies. These variables significantly and individually contribute to the general economic instability thereby impacting various sectors, particularly food and fuel prices.
It is quite saddening that insecurity forces farmers off their land, disrupts harvests, and increases transport risks leading to scarcity and price hikes. It also causes panic buying and hoarding, which worsens volatility. More so, insecurity significantly impacts food systems by forcing farmers off their land, disrupting harvests, and increasing transportation risks, which leads to scarcity and higher prices. This, in turn, can trigger panic buying and hoarding, further destabilizing markets and exacerbating the initial problems.
A more detailed breakdown on insecurity are as follows:
Interrupted Harvests: Even if farmers can stay on their land, insecurity can hinder their ability to plant, tend, and harvest crops, leading to reduced yields.
Displacement of Farmers: Insecurity, such as conflict or political instability, can force farmers to abandon their land, leaving fields uncultivated and crops unharvested.
Escalated Transport Risks: Insecurity can make it dangerous to transport food from farms to markets, leading to spoilage, higher costs, and reduced availability.
Undersupply and Price Hikes: The combination of reduced harvests and transportation problems can create shortages, driving up prices and potentially leading to food insecurity for vulnerable populations.
Emergency Buying and Hoarding: News of shortages or potential price increases can trigger panic buying, where consumers rush to stock up, further depleting supplies and driving up prices.
Unpredictability: The overall effect of insecurity is to create a volatile food market, with prices fluctuating wildly and availability unpredictable
Weak investment symbolizes poor access to quality seeds, finance, infrastructure for farming practice such as tools, storage, to mention a few. Truly, farmers cannot grow enough crops or preserve their harvest, leading to low supply and unstable markets. In order words, weak investment in agriculture directly correlates with limited access to quality seeds, financial resources, and essential infrastructure, hindering farmers’ ability to improve productivity and livelihoods. This lack of investment creates a cycle of poverty and food insecurity, particularly for smallholder farmers.
A more detailed breakdown on weak investment are as follows:
- Viable Planting Materials (e.g. seeds):
Farmers need access to high-quality, climate-resilient planting materials especially seeds to maximize yields and adapt to changing environmental conditions. Weak investment can restrict access to these vital inputs, leading to lower productivity and increased vulnerability to pests and diseases.
- Credit Facilities/Finance:
Access to finance is crucial for farmers to invest in inputs like seeds, fertilizers, and equipment, as well as to manage day-to-day operations and respond to market fluctuations. Limited access to credit, particularly for smallholder farmers, restricts their ability to adopt improved technologies and practices.
- Infrastructure:
Inadequate infrastructure, including irrigation systems, storage facilities, and transportation networks, further compounds the challenges faced by farmers. This can lead to post-harvest losses, difficulty accessing markets, and increased vulnerability to price volatility.
- Impact on Farmers:
These interconnected issues contribute to a cycle of poverty and food insecurity, particularly for smallholder farmers in developing countries. Without access to quality seeds, finance, and infrastructure, farmers struggle to increase their yields, improve their livelihoods, and contribute to overall food security.
Climate change generates inundations or floods, droughts, and unpredictable weather, damaging crops and cutting yields. This uncertainty makes food supply unreliable, pushing prices up disorderly. Therefore, climate change’s impact on agriculture, characterized by unpredictable weather patterns, including floods, droughts, and extreme temperatures, significantly disrupts food production and supply chains. This leads to reduced crop yields, increased food prices, and greater food insecurity. Like I earlier pointed out in my last interview on how climate change will likely affect South-South Nigeria, this is now seen manifesting in the recent persisting rains in the region for over two weeks.
Well, I have summarised the climate change impact on agriculture and they as follows:
- Climate change introduces instability to agricultural practices. Extreme weather events like droughts and floods can destroy crops, damage infrastructure like irrigation systems, and make land unsuitable for cultivation.
- Unpredictable weather patterns make it difficult for farmers to plan and execute their planting and harvesting cycles, resulting in lower and more variable crop yields.
- As food production declines and supply chains are disrupted, the cost of food rises. This disproportionately affects vulnerable populations, who may struggle to afford essential food.
- The combination of decreased food availability and increased prices can lead to widespread food insecurity, impacting people’s health and well-being, particularly in regions already facing poverty and instability.
For examples:
- Floods: Widespread flooding affected more than 30 states in Nigeria, leading to the destruction of an estimated 180,000 cultivated farmlands nationwide. This caused extensive submerging of farmland thereby damaging crops.
- Droughts: Droughts in Nigeria severely impacted food production, leading to reduced crop yields, livestock losses and increased food insecurity thereby challenging livelihoods.
- Extreme Heat: Rising global temperatures can lead to crop failures and reduced yields, particularly for crops sensitive to heat like potatoes.
- The economic consequences of climate change on food production are significant, including higher production costs, damaged crops, and lower yields. These costs are ultimately passed on to consumers through higher food prices.
- Human Security:
Climate change is increasingly recognized as a threat to human security, as it can exacerbate existing social and economic inequalities, leading to displacement and conflict.
- Adaptation Strategies:
To mitigate the impacts of climate change on food security, strategies like climate-resilient agriculture, crop diversification, and soil regeneration are crucial.
- How do these 3 core issues, insecurity, weak investment, and changing climate, interact with and exacerbate one another to affect food prices and overall food insecurity?
The fundamental points form a vicious cycle. As a matter of fact, insecurity discourages investment, while lack of investment makes it harder to adapt to climate change. More so, climate shocks in the form of flood and droughts reduces food supply, thereby elevates poverty and sometimes fuels conflict. Invariably, this means that they do not just co-exist, but they compound each another.
A. Insecurity costs lives and property and displaces survivors from their environment. Sadly, this disrupts their normal economic lives such that they are unable or less able to go about making their livelihoods the way they used to, whether it be business or farming. The fact that the current insecurity being experienced in Nigeria is perpetrated against local communities, means that subsistence farming suffers as locals abandon their homes in search of safer regions or must make do in Internally Displaced Persons (IDP) camps until they can resettle. Therefore, little or no farming activities take place and this causes food insecurity.
From research conducted, statistics indicate that about 70 per cent of teenagers do not make it into university due to high cost of education. In addition, over 70 per cent of graduates with diplomas or degrees, lack decent paying jobs and lack funding for business. I wish to advocate that young people be encouraged to secure grants and equity investments to do food production and other aspects of agriculture. To a large extent, these funds will enable them to acquire expensive machinery to employ qualified labour. Investment and employment must go together, to unlock food security.
B. Weak investment and poor supply chain network are facilitators of food insecurity in Nigeria. Farming requires funds and for large scale production to meet the needs of the populace a lot of financial investment is required. For the average farmer, these funds are limited, and studies have shown that majority of farmers operate using personal funds. Capital from investors or government grants even though available through various mechanisms are low and limited.
About 70 – 90 per cent of our food production is in Northern Nigeria, especially tomatoes, rice, yams, cow, amongst others. While there is a food surplus but market demand deficit in Northern Nigeria, but there is a market demand surplus but food deficit in Southern Nigeria. Yet the road and rail infrastructure are very bad, which increases the time and cost of food supply chain between the North and the South. To tackle this problem, private sector investors and entrepreneurs need to support agricultural opportunities in the Southern Nigeria, especially in areas where there is good land, good water and good roads. This will help reduce market pressure in the supply chain between the North and South, while moderating food prices to low-income households.
C. Over time, climate change coupled with poor government policy has affected agriculture and food insecurity in Nigeria through afforestation, desertification and flooding. Flooding in recent years has cost farmers all over Nigeria billions of Naira in losses during the rainy season. These floods are caused mainly by high levels of rainfall, overflowing rivers, destruction of dams and opening of dams during excessive rains (both within Nigeria and from neighbouring countries).
Bad governmental policy affects cost of raw materials and finished products in the marketplace. For instance, removal of fuel subsidies increased the cost of transportation. Transportation is the most fundamental cost in buying, selling and delivery of raw materials or finished goods.
To moderate prices of agricultural raw materials and finished goods, government create incentives for small holder famers, including but not limited to foreign exchange waivers, custom duty waivers and trade credit guarantees to acquire machinery such as tractors, harvesters and food silos.
In all these cases prices of available food goes up, as demand now exceeds supply. An intersection of all these factors interact to worsen food insecurity in Nigeria. For example in 2024, Lagdo Dam in Borno state was damaged due to excessive rainfall over time, and this caused flooding all over the state, including IDP camps where displaced persons had taken refuge from insecurity. This caused huge problems for them because it was difficult for humanitarian organisations to even reach them with external food supplies. A lot of loss of lives were recorded. In this situation these IDPs cannot farm because they have run from insecurity, they have little or no funds to get food and they have also experienced harsh effects of flooding due to climate change.
- How can addressing these high drivers of food prices, like insecurity, poor investment in growing Nigeria’s agriculture sector, help address food insecurity in Nigeria?
Addressing insecurity, investment in agriculture and reducing climate change will greatly improve food security in Nigeria. Security within all communities means that people are free to farm as they used to and food production will be improved. Receiving funding support for agriculture, including funding of the entire value chain, will also boost food production, post-harvest handling, processing, storage, marketing and distribution and hence availability of food. Implementing policies and measures to reduce climate change will also facilitate food production and availability. If all this is done, more food will be available and this would drive down prices of food and make food more affordable to the populace, hence boosting food security.
Tackling insecurity will empower farmers to return to their land, reopen supply chains, as well as rebuild markets. On the other hand, investment brings better tools, seeds, roads, and storage thereby boosting productivity and job creation. More so, climate-smart solutions protect farms from floods and droughts, and will necessitate year-round food availability. Together, they lead to lower prices, more stable supply, and stronger rural economies.
- What are the immediate and long-term consequences of persistent insecurity on a country’s ability to produce, distribute, and afford food for its population?
Persistent insecurity in the country would lead to a vicious circle where people become more desperate for their livelihoods and would be willing to commit more crimes in order to survive. This could lead the country towards a situation of anarchy. Food and water are the most basic of human needs, and where these are not available insecurity thrives, malnutrition is rife, and preventable deaths are experienced. In the long term there will be migration out of the country, as people look outwards for greener pastures for their survival. This threatens the very fabric of society and nationhood.
May I underscore that on a short-term basis, the following occur: farmers flee, markets shrink, and food becomes scarce and expensive. On a long-term basis, agriculture declines, youth leave rural areas, hunger rises, and the country becomes more dependent on food imports.
- Given that addressing these real drivers, insecurity, weak investment, and changing climate, can curb rising food insecurity, what are the most effective strategies for a country to mitigate the impact of insecurity on its food supply and prices, build agricultural resilience against climate change to stabilise food production and prices, and mobilise and direct appropriate investment into its agricultural sector to enhance food security and reduce price volatility?
From experience, findings from my research factory have shown that reducing the impact of insecurity can be actualised through strengthening of rural security and protection of farmlands; supporting displaced farmers with compensation and resettlement; and engaging of communities in peacebuilding.
More so, building resilience to climate change can be achieved by promoting irrigation, drought-resistant crops, and better land practices, as well as setting-up early warning systems and support disaster recovery.
Additionally, to attract direct investment can be attained by building rural roads and infrastructure (storage facilities and green energy/power) in farming areas; offering tax incentives and reduction of lending barriers; and provision of support for youths and women in agribusiness.
Moreover, to address these challenges, increased investment in agriculture, particularly in access to quality seeds, finance, and infrastructure, is crucial. Investment should be targeted and context-specific, ensuring that it reaches the most vulnerable farmers and promotes sustainable agricultural practices. Moreover, to enhance food security and price volatility reduction, the following points should be observed:
i) Enforcement of the already established national policies such as the National Agriculture Technology Innovation Policy (NATIP) is key. This policy has outlined key measures to boost agricultural production (can be supply and the value chain, with the incorporation of technology.
ii) Climate change policies should also be implemented, with sensitization and awareness campaigns to all citizens on reduction of practices that contribute to climate change. Use of alternative sources of energy and cleaner energy should be encouraged and financially supported.
iii) Financing for the agricultural sector should be improved from what it is now, especially at the rural levels. Mechanization in agriculture should be enhanced for improved food production.
iv) Capacity building of farmers and other stakeholders in the agricultural value-chain is key to boosting food security in Nigeria. Training should cover improved agricultural practices and use of improved technology, through direct training and extension services.
v) Collaboration of all actors and stakeholders in the agricultural sector should be enhanced. A multi-stakeholder approach to tackle these issues should be adopted.
vi) The government should cease to handle the problem of insecurity with kid gloves. Insecurity should be dealt with decisively.
