High prices of food items unsettle residents

The Gwagwa Market, Karimo, Abuja.

Generally, economists agree that the three basic needs of man are food, clothing and shelter. Of all the needs, food plays a significant role, as it provides nutritional support for the body, assists in the production of energy and stimulates growth.

Historically, people secured food through two methods: hunting and agriculture. But currently, most of the food products consumed by the world population are supplied by the food industry.

The critical role that food plays in the society has made agencies such as the International Association for Food Protection, World Resources Institute, World Food Programme, Food and Agriculture Organisation and International Food Information Council to focus on food security.

The right to food is a human right that is derived from the International Convention on Economic, Social and Cultural Rights, recognising the “right to an adequate standard of living, including adequate food,” as well as the “fundamental right to be free from hunger.”

A survey by the FAO, an affiliate body of the United Nations, shows that more than half of all employment in Nigeria depends on agriculture, but 90 per cent of the produce comes from small rain-fed farms of a few hectares, constrained by poor infrastructure and little access to credit.

Many of these farms, it says, are unable to meet their own subsistence requirements, exposing families to volatile prices in the market. The FAO also estimates that 65 per cent of Nigerian population is food- insecure. Experts say the 65 per cent food insecurity figure, though frightening,  might increase further if urgent steps are not taken to boost food production.

For instance, many residents of the nation’s capital have, in the last few weeks, been struggling to survive, owing to a sharp increase in the prices of food items.

An insurance broker, who gave her name as Mrs. Eunice Anyanwu, says the prices of consumer goods, especially food items, have increased by over 50 per cent within the last few months.

She says, “I’m always scared whenever I’m going to the market because the price of things keep increasing.

“A few months ago, I used to prepare a budget before I went to the market; but these days, I can’t conveniently do such because you can’t predict what will happen to the prices of foodstuffs when you get to the market.”

Another resident, who simply identified herself as Rachel, blames the rising food prices on the planting season.  A civil servant, she notes that the supply of agricultural products had been on a continuous decline since May. This, she noted, was responsible for the upward surge in prices.

A survey of some of the markets in Abuja shows that the price of  a basket of tomatoes at the popular Gwagwa Market has risen from N800 to N2,500, while that of onions has risen from N800 to N1,600. The prices of groundnut oil and palm oil have also increased from N180 and N170 to N240 and N230 per bottle respectively.

The prices of other consumer goods, such as meat, fish, and fresh pepper,  among others,  have also soared significantly by between 20 and 40 per cent.  As a result of this, food vendors in the nation’s capital have also jacked up their prices.  For instance, a plate of food at the local food sellers popularly called “mama put” has risen from N350 to N500.

Explaining the reason, a tomato seller,  who gave her name as Patience,  says the market was facing tight supply of farm produce.  This, she adds, is primarily responsible for the price surge. According to her, between June and July, the country witnessed high increase in prices of the fruits, oils, bread, cereals, and vegetables.

The National Bureau of Statistics, in its Consumer Price Index report for June, says the country’s inflation rate has only risen by 8.4 per cent. The CPI measures the average change, over time, in prices of goods and services consumed by people for day-to-day living.

In the report  signed by the Statistician General of the Federation,  Dr. Yemi Kale, the bureau says the June inflation rate was 0.6 percentage points lower than the 9.0 per cent rate recorded in May.

The NBS notes that since the beginning of this year, inflation rate has continued to trend lower across all three indices — headline, core and food. It says when the year began, headline, core and food sub-indices were 9.0 per cent, 11.3 per cent and 10.1 per cent respectively. He adds that the three averaged 8.9 per cent, 8.0 per cent and 9.9 per cent respectively.

Relative to the month of May, the slower rise in the headline index was attributed to slower rises in all Classification of Individual Consumption According to Purpose classes (except the Food and Non-alcoholic Beverages Class).

This, it states, resulted in the muted rise of the core sub-index as well. On the other hand, food prices increased at a faster rate,  compared to May,  as the country is deep into the planting season. Food supplies continue to be tight as inventories decline, creating upward pressure on prices

The report reads in part, “In June, the CPI, which measures inflation, rose by 8.4 per cent year-on-year. This was 0.6 percentage points lower than the 9.0 per cent rate recorded in May.

Compared with January this year, rates continue to trend lower across all three indices — the Headline, as well as the Core and Food sub-indices when they were recorded at 9.0 per cent, 11.3 per cent and 10.1 per cent respectively.

“Lower rates are further reflected in average rates over the first half of this year. During the period, the headline, core and food indices averaged 8.9 per cent, 8.0 per cent and 9.9 per cent respectively.

“This is lower than the average over the same period last year, which were recorded at 12.5 per cent 14.1 per cent and 11.8 per cent respectively.”

The report also put the percentage change in the average Composite CPI for the 12-month period ending in June 2013 over the average of the CPI for the previous 12-month period at 10.4 per cent.”

But reacting to complaints from Nigerians about the significant drop in inflation without tangible reduction in commodity prices in the market, Kale says the recent reduction in inflation is not a pointer to the fact that prices of goods and services are reducing.

The NBS boss adds that inflation is often not commensurate with reduction in commodity prices.

He notes, “Inflation is not a reduction in prices; inflation is a rise in prices. When you say it has gone down, it means the rise, this time, is not as much as the previous time.

“Inflation is the slow-down in the rise of price; it’s not a reduction in price, as most people think. Price rise is actually a good thing, but you have to ensure that the extent of that price rise is reasonable and going at a sustainable pace.”

Illustrating with figures, Kale adds, “If your price is N100 and it goes to N200 last month and this month, it goes to N250, this difference is N50, — compared to N100; but it has still risen. All it is showing is that the rise is slower than previously.

“So, what I will say is that going to the market and saying that prices are still going up is just a lack of understanding of how inflation works.”

Nigeria’s decline in agricultural production,  according to reports from the ministry, is attributed to very low usage rates of agricultural inputs, and low mechanisation intensity.


Source: Punch