Bulk Purchases For COVID-19 Palliatives Causing Rise In Food Prices – FG

The government however noted that with the harvest season having set in, prices would begin a gradual downward journey and will ultimately be felt across the Federation soon.

President Muhammadu Buhari
President Muhammadu Buhari

The Nigerian government said on Tuesday that bulk purchases of food items for use as COVID -19 palliatives across the states was one reason prices were rising.

The government however noted that with the harvest season having set in, prices would begin a gradual downward journey and will ultimately be felt across the Federation soon.

This position came out of the meeting of the National Food Security Council held at the State House, Abuja.

The meeting, which had state governors in attendance, was presided over by the Chief of Staff to the President, Professor Ibrahim Gambari.

The governors of Jigawa (Abubakar Badaru); Kebbi (Atiku Bagudu); and Plateau (Simon Lalong) states, addressed State House Correspondents as the meeting rose.

For instance, Badaru made the point that the Coalition Against COVID-19 (CACOVID), comprising the federal and state governments, usually made bulk-buying of food items for distribution as Coronavirus palliatives to the people.

He explained that such bulk-purchases could still push prices up in the interim, despite the fact that at the local level, prices had dropped.

The the Jigawa governor, who represents the North-West zone on the council, explained, “Let me explain further on the prices of food crops. You will not see it (drop in prices) immediately living in the cities, living in Abuja. You will not see the price drop immediately because there is always transition between drop in the price and on the counter price dropping.

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“Prices started dropping at the local markets. It has to be bought, it has to be transported. If you have a 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.

“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.

“I’m sure if you go out now, you will see the drop. But I’m worried about people talking about expensive food, this is a cycle. For all of us that understand farming cycle, we know that May, June, July always produce, food get expensive because all the stock have started going down.

“And even the farmers that keep some to consume have probably exhausted and have to go to the market and buy. So, the demand is becoming higher.

“And this is also exacerbated because there is bulk buying. CACOVID, states bought a lot to distribute as palliatives; federal government is also buying. All are buying at the same time at the same market, and you know when there is chunk of demand at the same time, things will naturally go up and that brings about the hike in price and coupled with the fact that it is an off-season period.

“An off-season period met with this huge demand certainly, price will go up. We have started seeing them going further down. It takes little time to translate into cheaper prices and in retail stores.”

On his part, Bagudu, who doubles as the Vice-Chairman of the council, claimed that data collated by the body so far, indicated that prices had dropped.

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He added, “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 association, farmer groups prior to the National Food Security Council meeting.

“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.

“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.

“The CACOVID was buying food items for the coronavirus pandemic response in bulk at a peak of the beginning of the season, at a time when demands are not high. So, it 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 huge draught but that has been overcome by the food coming from elsewhere.”

The governor insisted that there was no food crisis in the country, irrespective of the fact that farmers lost more yields to flooding this year than before, among other negative factors.

He went on, “Is there going to be good crisis? No, by God’s grace. Yes, flooding is devastating. Unfortunately, that is part of life. We have a good eco-system where immediately after flooding we can plant again.

“In fact the farmers are more confident because the risk of flooding has reduced.

“So, what is important is for us to mobilize 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.

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“That is why since last week and a week earlier, the challenge has been ‘come up with how we can intervene so that farmers, fishermen and those in husbandry can resume economic activities as quickly as possible.’

“In fact, one of the key initiatives as the very first intervention of the national Food Security Council, was to recognise how to support people to resume economic activity following the disaster. That is why in 2018, N23 billion was spent to support farmers in 14 states as well as another N8 billion to support some states that were affected by conflict and the need for people to resume economic activity.

“That is part of what we resumed today and that experienced will certainly come to play in this model.”

According to him, President Muhammadu Buhari directed a reduction in the price of fertiliser from N5,500 to N5,000 per bag, in a bid to assist farmers.

Written by The Interview Editors

The Interview is a niche publication, targeting leaders and aspiring leaders in business, politics, entertainment, sports, arts, the professions and others within society’s upper middle class and high-end segment in Nigeria.

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