Nigeria: Food stocks low, prices high, despite good harvest

News and Press Release
Originally published
KANO, 31 October 2008 (IRIN) - Despite a good harvest in 2008 Nigeria's grain stocks are running low causing cereal prices - which usually fall post-harvest - to climb, according to merchants and farmers in northern states.

The combination of low stocks and high prices could have dire consequences for the whole country, since northern states produce 70 percent of the food for Nigeria's 131 million people, said Abdullahi Koya, head of Kano's Dawanau market, the largest grain market in West Africa.

Grain merchants usually maintain strategic reserves from previous harvests, to release into country-wide grain markets when a new 'lean period' approaches, to send prices down.

But with 2007 yields drastically cut - some say by as much as half on previous years - by locust invasions and unusually brief rains, merchants' stocks were near-empty by June 2008. This left merchants "in frantic competition to restock," said Hakeem Ajeigbe, an agronomist with the Kano office of the International Institute for Tropical Agriculture (IITA).

"The good yield recorded this season will hardly offset the food scarcity that we have been experiencing since last year because all the food stocks have been depleted, which puts a strain on new stocks collected [from this year's harvest]," Ajeigbe pointed out.

The 2008 grain yield has been 20 million tonnes, double that of 2007, according to Sabo Nanono, Kano head of the All Farmers Association of Nigeria (AFAN), Nigeria's commercial farmers union.

Normally grain prices drop and remain comparatively low for several months following the September harvest, according to Koya. It is only after this that they start to rise as the dry season progresses, until they reach their peak in March, he said.

Farmers sell low, buy high

Merchants, desperate to re-stock, have been going village to village buying grains from cash-strapped farmers at very low prices, then stashing them in their warehouses rather than making available for sale, which also drives up prices, explained Sabo Nanono, head of the Kano chapter of AFAN.

Farmers are willing to sell cheap because they need immediate cash but are then forced to buy back grain weeks later at much higher prices.

"We need money to marry off our daughters, renovate our rain-washed homes and settle other domestic responsibilities," farmer Usman Lawan from Badume village just outside Kano, told IRIN. "Our only source of money is our grains. We are desperate to raise money which is why we sell our grains cheaply."

Most subsistence farmers in the north aim to grow enough grain to live off for approximately 12 months, selling off the surplus, according to Ajeigbe. But the 2007 yield lasted just three months, forcing farmers into debt.

According to residents of villages across Zigawa state, farmers there are leaving to find work in construction or casual labour in nearby cities, and more and more children from farming families are now seen on city streets begging.

Soaring prices "a bad omen"

A 50kg sack of millet which sold for US$25 in September 2008 now costs $38, a sack of maize has risen to $51 from $34, and cowpea has jumped to $59 from $42, Koya said.

"We are worried grain prices may not go down at all. Prices have started picking up just a month after harvest which is very unusual. It is a bad omen," said Koya.

Farmers need credit

Not much has been done to alleviate farmers' plight so far, Kano agronomist Ajeigbe said. "The Nigerian government is not seen to be doing anything to address the problem. It should have provided credit facilities to farmers through rural cooperative societies so they are not forced to sell their grains cheaply to merchants to raise immediate cash."

This way, he said, farmers could repay the loans when prices rise, some months later.

But AFAN's Nanono thinks a different strategy is needed. "Ideally the government should intervene by purchasing the grains directly from the farmers to keep as its own strategic reserve which it will resell to farmers at the same price when the food shortage bites before the next crop season."

Currently the government runs a nationwide grain reserve, but individual states do not. Usman Bello, spokesperson with the Agriculture Ministry in Kano state, told IRIN this is set to change. "We have just concluded plans to set up our own strategic grain reserve, which we intend to re-sell at subsidised rates later on in the year."

But they will still be buying the grain at market prices, rather than from farmers directly.

"In the long term, allowing merchants to have a field day grabbing grains from hapless farmers will lead to disastrous consequences," farmers union leader Nanono warned. "If care is not taken, we will be faced with a worse food situation than last year."