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Friday, August 10, 2012

Food Price Hike: Effects of importation on Africa


World Food Laureate, Dr. Monty Jones
There have been changing fortunes on food price hikes on the continent. YINKA AWOSANYA examines the effects despite claims that Africa’s major occupation is agriculture.
Introduction:
In Africa, the record is still high when it comes to cost of food importation despite having a higher percentage of the population claiming to be practising agriculture. As such both local and international institutions as well as African governments have been lamenting the effect on the continent’s economic standing, especially long run.
For instance, the global food import bill for the year 2012 was projected to decline to $1.24 trillion, a 3.87 per cent less 2011 record of $1.29; the feasibility of the prediction lies in the increase to be recorded in food productivity in individual countries.
Traceable Facts:
This is traceable to the fact that the youths are not showing enough interest in taking up agriculture due to its unattractive status thereby leaving food production at the mercy of the aged as well as those living in the rural areas to cater for the food needs of all, both those in the urban and rural dwellers.
World Food Laureate, Monty Jones once raised an alarm that crop production in Africa is lagging behind the rest of the world with a very wide gap. This, he said, contributed greatly to the rate of food importation as little produce is not enough to cater for the ever growing population. Noting though that some African countries still export farm produces, but the rate of exportation is insignificant compared to importation.
NaijaAgroNet gathered that one of the stable food exporting countries in Africa, Kenya still imports maize to boost stocks of foods despite recording a big harvest which followed good rains in the last season. The maize imports for Kenya last season stood at 1.05 million 90-kg bags, both from regional and international markets in a bid to supplement food supplies.
Nigeria is not exempted from the food importing countries of the continent despite being the largest producer of cassava in the world, even though most of the cassava produce come from subsistence farmers. For instance, in 2011 alone, Nigeria recorded about N1.59 trillion in the importation of wheat, rice, sugar and fish only.
To curtail the rate of importation, Nigerian president, Dr. Goodluck Jonathan recently revealed an increase in tariff on wheat in a bid to encourage the use of cassava flour in the production of bread which will lead to a drastic reduction in wheat importation.
He also said that Nigeria, in 2012 alone will be making an export of a million metric tonnes of dried cassava chips to China which will work in favour of the economy as the export would earn the nation the sum of $136, about N21.7 billion in foreign exchange.
Factors:
The increase in global food prices in the past few months could be attributed to poor weather conditions leading to low productivity as well as drought and social insecurity.
Various food prices index, especially the Food and Agriculture Organization’s (FAO’s) recent food price index which showed that agricultural commodities from November 2011 to April 2012 indicated an upward movement of food prices globally.
With foods like cereals, sugar, dairy products and meat leading the global food index with high prices, the overall price index rose by two per cent, 7 per cent lower than that of January 2011.
Nigeria records downward trend:
Although maize in Nigeria recorded a downward trend in January 2012; selling 100kg for N5,500 equivalent of $34.08 as against N6,500 in December 2011, the latest peak then. While the global maize price has the highest rate of increase with six per cent, wheat also recorded an increase but less significant despite the improved weather conditions in favour of the crop.
The global food prices could be attributed to poor weather condition affecting crops in major food producing regions of the world and the rate of mechanised or commercial farming compared to subsistence farming as the produce from subsistence farming is not enough to feed the ever growing world population.
Drought and insecurity:
Recent droughts that affected some parts of the world, especially Eastern and Sub-Saharan Africa, hinder global food security as food situation of vulnerable groups of people remained precarious.
The global price of Wheat, for instance, may not witness a sharp reduction in 2012 as its production is expected to drop to 675 million tones, a 3.6 per cent decline; another influence that may also contribute to this is the price of maize.
Due to the critical growing months ahead, crops that might have witnessed a drop in May 2012 may still remain high and vulnerable. Just as the cereal price towards the end of the year might reduce as the United Nations’ Food and Agriculture Organisation (FAO) predicted an increase in cereal production, which is anticipated to reach 2.371billion tones, thereby creating a new cereal production record.
Other agriculture produce to witness an increased production capable of leading to a reduction in their market prices or at least maintain a stable price includes milk with a forecast of 750m tones, a 2.7 per cent growth with the expectations that Asia will account for most of the productions.
While the wholesale price of local maize in Kano State in Nigeria, recorded an increase in February 2012 to N6,300, a 14.5 per cent rise over the January’s price, it dropped again in March to N6,200 and N6,800 in April, just N300 down its peak in seven years; February 2005 it was at N7,100.
Conclusion:
Although Nigerians would have expected a very sharp increase in food price in the country and never to drop from its January 2012 price due to the increase in pump price of petrol with about 50.76 per cent in January as well as the case of insecurity in the northern part of the country.
Yet, food prices did increase but not all food commodities correlate with the 50 per cent rise in fuel pump price, because some commodities did not witness an increase while others get about 20 to 100 per cent rise in prices.



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