Reducing the price of fertilizer, by Jide Ayobolu

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President Muhammadu Buhari has ordered marketers of fertilisers to sell their products N5,000 per 50kg bag, even amidst the scarcity and rise in prices of farm inputs recently in the open market.

This was disclosed by the Jigawa State governor, Abubakar Badaru, at the meeting of the National Council on Food Security held at the presidential villa recently.

He said the president gave the orders to ensure that farmers are able to access the commodity.

The governor, who is the chairperson of the Presidential Fertilizer Initiative (PFI) said the federal government had spent about N23 billion to support farmers in 14 states, while another N8 billion was spent to support some states that were affected by conflict, so that farmers can resume economic activity.

Mr Badaru had announced in April that the federal government has reduced the price of NPK fertiliser from N5,500 to N5,000 per 50kg bag, as part of palliatives introduced to cushion the effect of the COVID-19 pandemic on farmers and other end-users.

“As part of measures introduced by Mr President to provide relief to Nigerian farmers on account of COVID-19 pandemic, the price of NPK 20.10.10 fertiliser is now N5,000 from N5,500 per 50 kg bag,” Mr Badaru said.

He promised that sufficient quantities of the fertiliser would be made available in time for the wet season farming, in spite of the COVID-19 pandemic.

Now, Mr Badaru has said that the bulk purchase of food commodities distributed as COVID-19 palliatives is one of the factors responsible for the observed high cost of food in the country.

He said he is confident that the situation will change since harvest season has begun and more commodities are arriving at the markets. He noted that the Coalition Against Covid-19 (CACOVID), federal and state governments were all involved in the bulk purchase of food items to distribute as coronavirus palliatives leading to increased costs.

While explaining further, the governor said the drop in prices of food items will not be noticed immediately, because there is always a transition between the drop in the price and on the counter price drop.

“Prices started dropping at the local markets. It has to be bought, it has to be transported. If you have an existing stock, you will not lose money and drop the price. They will wait until they have exhausted the stock or there is a lot of the produce in the market, then they will be forced to drop the prices,” he was quoted to have said.

“So, the crops have started coming up, getting cheaper. It’s being transported and it takes time, depending on how fast the stocks are and how fast the traders are bringing the cheaper stock into the market, before you will see that final drop.”

Also speaking on the issue, Kebbi State governor, Atiku Bagudu, reiterated that food prices are coming down judging by the data obtained and made available to him. “Yes, I said food prices for crops have started coming down.

That was from data collated and made available to me in my state and from a pre-meeting with all the commodity associations’ farmer groups prior to the National Food Security Council meeting,” he explained.

“In the last one week, I have been going round my state in the last one week and have seen further drops in prices and it makes sense and is self-explanatory. Harvest is coming in, harvests of millets, maize and of rice,” he added.

Mr Bagudu also said, “Yes, we had a lot of devastating floods that affected the rice crop but again, there is upland rice that is being harvested that has not been affected by flood.”

He reiterated that the CACOVID was buying food items for the coronavirus pandemic response in bulk at the beginning of the season, when demand was not high. So, that, according to the governor, contributed to the high cost.

“The global lockdown also contributed because of lack of movement of food items. But now, harvests are coming in and it is good. Yes, there are some states that experienced a huge drought but that has been overcome by the food coming from elsewhere.” he said.

Mr Bagudu assured that despite the flood disasters in parts of the country this year, which he said is worse than previous ones, there won’t be a food crisis.

“Is there going to be a food crisis? No, by God’s grace. Yes, flooding is devastating. Unfortunately, that is part of life. We have a good ecosystem where immediately after flooding, we can plant again,” he said.

“In fact the farmers are more confident because the risk of flooding has reduced,” he added.

“What is important is for us to mobilise and ensure we time properly and is part of the reason Mr. President has been working very hard because that is what bothers him most, how to deliver to Nigerians.

“That is why since last week and a week earlier, the challenge has been to come up with how we can intervene so that farmers, fishermen and those in husbandry can resume economic activities as quickly as possible.” Mr Bagudu further said that production of the commodity has normalised in the country following the reopening of Indorama’s plant in Rivers State, which was closed because of Covid-19 related deaths.

It is important to note that “Prior to December 2016, Nigeria’s stock of blended Fertilizer was shipped into the country as fully-finished products, even though Urea and Limestone, which constitute roughly two-thirds of the components of each bag, are available locally.

“The objective of the Presidential Initiative is to procure the 4 constituent raw materials for NPK Fertilizer – locally-sourced Urea, locally-sourced Limestone granules (LSG), Diammonium Phosphate (DAP) imported from Morocco, and Muriate of Potash (MOP) sourced from Europe – and blend these locally to produce NPK Fertilizer at a much reduced cost.

“The finished products will be delivered to Nigeria’s farmers at a starting price of about N5,500 per bag, compared to the N8,000, – N9,000 cost of imported fertilizer.”

The statement is also hopeful that Presidential Fertilizer Initiative would “stimulate local production of NPK fertilizer by resuscitating moribund fertilizer plants, and reviving the local blending fertilizer industry.

‘’It will also make fertilizer available to Nigerian farmers at affordable prices and in time for the 2017 wet season farming; result in projected savings of US$200 million in foreign exchange, and ‎ 60 billion in budgetary provisions for fertilizer subsidy; enhance food security as a result of the expected increase in food production.

‘’It will equally reduce food-induced inflation and stimulation of economic activities across the agriculture value chain and create thousands of direct and indirect jobs.” Meanwhile, the Initiative is executed by the Nigeria Sovereign Investment Authority (NSIA) through a Special Purpose Vehicle that would roll out the one million tonnes of NPK fertilizer in 5 batches of 200,000 metric tonnes each.

“Beyond the broader goal of ensuring food security for the country by providing high-grade fertilizer to enhance harvest in the 2017 farming season, the Buhari administration is by this initiative, reinforcing its commitment to reviving and diversifying the economy, and creating growth, through focus on agriculture”.

 It is important to note that,

  1. With a projected population of 200 million, Nigeria has the greatest number of people to feed in Africa.  In terms of employment, agriculture is by far the most important sector of the economy, engaging about 70% of the labour force.

  2. Agricultural sector has the highest potential to diversify food supply and expand foreign exchange earnings.

iii. Agricultural growth has remained steady at 6% in the last five years despite growth of the overall economy.

  1. Currently, agriculture’s contribution to total exports has been relatively low, between 0.5% and 2.0% over the last four years.

  2. Agricultural produce yields per hectare is 20% – 50% lower than those obtained in similar developing countries.

  3. Despite enormous agricultural production potentials Nigeria is currently a net importer of food.

vii. Fertilizer and other agric-inputs use is very low. Fertilizer per capital consumption is 6.1 kg/ha as against 18.9kg/ha for Senegal.

It is also imperative to underscore the fact that fertilizer, agricultural production and food security are mutually related.

  1. fertilizer along with improved seed use is the key driver to agricultural production which in turn drives the attainment of food security.

  2. Fertilizers are critical in improving agricultural production and food security through nutrient loss replenishment on farmers’ fields.

  3. Food security exists when all people at all times have access to sufficient, safe and nutritious food to maintain active healthy life. UN/FAO refers food security to the availability of food and accessibility to it.   A household is considered food secured when its occupants do not live in  hunger or fear of starvation.

  4. Agricultural yields have remained the same or declined in the past two decades.  Rise in agricultural productivity is derived more from expanded planting areas for staple crops than from yield increases.

  5. Studies have also  identified poor agricultural policies, low fertilizer use, low access to agricultural credit, land tenure insecurity, land degradation, poverty and gender issues,  l o w   investment in agricultural research, poor market access and marketing efficiency as    the constraints for agricultural productivity.

  6. Though Nigeria has proven 159 billion cubic feet of natural gas reserve (7th in the World) and large quantity of phosphate rock deposits, local fertilizer production and supply is still a major constraint to fertilizer use.

To   shore up and attain food security level in Nigeria, there must be improvement in the agricultural production system.

  • One key to the food security pathway is providing farmers with access to quality inputs, particularly fertilizers and the knowledge to apply them efficiently and effectively.

  • There is also the need for a concerted effort, coordinated public-private partnership to achieve the scale of reform necessary for sustainable agricultural growth.

Fertilizers, along with other inputs are important contributors to raising agricultural output by increasing yields and thus securing food security.

  • Excess output allows farmers to feed their families’ better, increase their income and develop commercial activities.

  • Farmers need access to inputs especially fertilizers and improved seeds at the right time and affordable prices.

One of the best remedies is the development of a virile network of private agro-dealers, who in addition to supplying agricultural inputs can also relay information on good farming practices complementing agricultural extension services.

Jide Ayobolu is a public affairs analyst

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