By: Abdulmalik Adetola Lawal
Boosting food and agriculture resource production is crucial now, as investing in agriculture promises high returns.
However, the current lack of bank funds may hinder profitability due to the associated high costs.
This was stated by Dr. Ikechi Agbugba, a Senior Lecturer, at the Department of Agric & Applied Economics, Rivers State University, Port Harcourt City, Nigeria; and a Visiting Professor, at Rome Business School.
In his interview with AgroNigeria, he emphasized the need to increase the production capacity of food and any other agriculture resource in Nigeria.
He noted that Investing in agriculture can yield significant returns, even if funds from banks are not readily accessible. However, channeling funds into production may not guarantee profitability, as it could contribute to increased costs.
In his words: “From principle, it can be said that it is time to increase the production capacity of food and any other agriculture resource, because any investment in agriculture will result to high returns regardless of inaccessibility of funds from the banks to increase production may not necessarily lead to profitability since the funds will lead to high cost.
“This is a clear indication that the price of food items is what is driving the high inflation rate in Nigeria.”
He further explained that the rise in food prices in Nigeria, with a 31% increase in September 2023 compared to the previous year, is not new information but has become dated.
“Projected by Trading Economics global macro models and analysts, food inflation in Nigeria is expected to reach 33% by the end of the last quarter.
“Truly, the figures are so scary… No doubt, its impact on almost every activity across food value chains is affected.
“This can be seen in the rise in Inflation and its impact on the agriculture sector will definitely transcend from the increase in the cost of production to the reduction in the purchasing power.
“Thus, further increasing food prices and drastically reducing the standard of living”, he added.