Welcome, Guest: Register On Nairaland / LOGIN! / Trending / Recent / New
Stats: 3,152,896 members, 7,817,641 topics. Date: Saturday, 04 May 2024 at 04:06 PM

Nigeria Needs Trade As Much As It Needs Food (read Bolded Part) - Politics - Nairaland

Nairaland Forum / Nairaland / General / Politics / Nigeria Needs Trade As Much As It Needs Food (read Bolded Part) (534 Views)

Obaseki Cuts Barriers To Trade As MADE II Proposes £10m Investment Inflow For... / Kemi Adeosun has opportunity to reshape African trade as Afrexim Bank Chairman / Africa Rejects Europe's 'dirty Diesel' (read bolded parts) (2) (3) (4)

(1) (Reply) (Go Down)

Nigeria Needs Trade As Much As It Needs Food (read Bolded Part) by Blue3k(m): 10:02pm On Apr 08, 2017
The United Nations (UN) has called for $5.6 billion in donations to fight a famine that threatens over 20 million people in Nigeria, South Sudan, Somalia, and Yemen. In Nigeria alone, upwards of 5 million people face acute food shortages.

Considering the progress Nigeria has made in food security since the 1980s, the country’s placement on the list is disheartening. While the UN’s efforts might bring temporary relief, the root causes of this famine must be addressed to prevent similar crises in the future. Boko Haram might be partly responsible for this crisis, but the reality is that Nigeria’s famine is worsened by protectionist policies that restrict agricultural trade and force Nigerians to depend on insufficient domestic food production.

Restricted Food Imports

In 1983, Nigeria averaged less than 2,000 calories per person per day. By 1998, Nigeria had caught up to the global average of over 2,630 calories. However, food production has dropped in recent years because Nigerian agriculture is stuck in the past. In a country of over 170 million people, there are fewer than 5,000 tractors. Traditional small scale farming permeates the food production In Nigeria. Small plots a couple of hectares in size account for 90 percent of domestic food production. With a growing population, such small-scale production has become insufficient.

This lack of technological development has adversely impacted Nigerian farmers’ competitiveness against other producers, as shown by the Revealed Comparative Advantage (RCA) Index. The RCA provides scores to determine each country’s comparative advantages in a certain classes of goods or services. RCA scores between 0-1 show disadvantages, while scores above 1 show advantages. Per the RCA scores, Nigeria has a competitive disadvantage in every category of food production, with scores ranging from 0.21- 0.58. This would not be a big problem if the government allowed for more food imports. However, this is not the case.

According to the Brookings Institute, Nigeria imposes high tariff rates and protectionist policies with the intent of protecting domestic industries, including the agriculture sector. As of 2014, import tariffs ranked second, behind oil and gas, in their contributions towards government revenue. In an attempt to keep high value foreign currency within the country, President Buhari restricted foreign exchange access for [url=https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Grain%20and%20Feed%20Annual_Lagos_Nigeria_4-21-2016.pdf]41 goods and services[/url], including wheat and rice.

In 2016 the import tariff on wheat was 5 percent plus a 15 percent levy, and flour products were banned from import. More strikingly, wheat tariffs are low compared to the 30 to 50 percent tariff placed on rice products. These tariffs work to artificially increase the price of food for Nigerians, while doing nothing to make domestic agriculture more competitive. The lack of competitive production combined with low imports has created a system where domestic food consumption is directly linked to food production. This increases Nigerian vulnerability to environmental factors such as drought, floods, or violence.

Violence and Burning Farms

To further complicate matters, since 2015, the insurgent group Boko Haram has displaced over 2 million people, including farmers, and worse, it is a common practice to burn farms as they pillage regions. Expecting domestic production to feed Nigerians in peaceful times is ignorantly optimistic, expecting them to do so when farmers are displaced and crops destroyed is insanity.

In a violence-torn country, placing hope in their domestic, archaic agriculture sector is not a recipe for success.

Self-reliance on domestically produced food is a pipe dream for Nigeria. If the government wants to help their citizens, they must repeal harmful trade policies that drive up the cost of food.
Domestic production has failed to meet local demands, as evident by the ongoing famine.

Within the next couple months, 75,000 Nigerian children could die as a result of the famine. Protectionist policies and nationalist mentalities all mean very little when plates and bellies are empty and children are dying. The continuation of import limitation and bans will do nothing but hurt the Nigerian people further.

It may be too late to prevent this famine, but changing current policies can still bring relief. By learning from past mistakes, future Nigerians can hopefully avoid a repeat of history.


source: https://fee.org/articles/nigeria-needs-trade-as-much-as-it-needs-food/

Legend:
Black- facts
Blue- claims

summary coming later
Re: Nigeria Needs Trade As Much As It Needs Food (read Bolded Part) by DjAndroid: 10:07pm On Apr 08, 2017
Summary of the above.

Re: Nigeria Needs Trade As Much As It Needs Food (read Bolded Part) by Blue3k(m): 2:05am On Apr 09, 2017
Summary points: Domestic production is not enough to sustain Nigerian food demand. Unless we address capital constraints and violence no food sustainability possible.

● Capital inputs like tractors limited
● 90 percent of farming small scale
● Nigeria lacks revealed comparative advantage in food production
● North East violence hinders productivity
● Food import ban doesn't address production shortfall
● Food ban raises price of food futher hurting poor in North east.

Anyway I looked at ERGP and most of the issues above seem like they'll be addressed in some form. The other issues can be solved by states to better productivity. None of this can be addressed in a day obviously but out everything written in plan Agriculture most thought out. Best part is this section doesn't require too much FDI to be improved the currency issue won't hinder investment much. (Besides buying machines)

The small scare farming can only be solved by consolidationin industry which takes time. Then states can encourage co-ops along with what ever federal government doing. Lastly more farm to market roads.

Anyway the food ban does like bad idea I.M.O. It's not like these protectionist policies did much all these decades.

Some points in ERGP that address issues above.

● Improve access to finance
● Recapitalize the Bank of Agriculture (BoA) to provide single-digit interest rate credit to small farmers through the network of micro-credit banks
● Re-vitalise the Nigerian Commodity Exchange (NCX) to fast-track exports, and improve inventory management/storage capacity at the national level
● Open up a minimum of 100,000 hectares of irrigable land through the 12 River Basin Development Authorities by 2020
● Expand the GES scheme by expanding the eligibility threshold above 5 ha[quote]
Re: Nigeria Needs Trade As Much As It Needs Food (read Bolded Part) by Boleyndynasty2(f): 4:11am On Apr 09, 2017
Their policies and decisions is really killing this country. But we'll get through it all, and even have stories to tell our Grandchildren faaa

1 Like

(1) (Reply)

I Need Your Advice Please..what Would It Cost Me To Be Elected As Governor. / How Fashola's Rascality Got Replicated In Adamawa / Presidency Seeks Ways To Strengthen Whistle Blower Policy

(Go Up)

Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health
religion celebs tv-movies music-radio literature webmasters programming techmarket

Links: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Nairaland - Copyright © 2005 - 2024 Oluwaseun Osewa. All rights reserved. See How To Advertise. 19
Disclaimer: Every Nairaland member is solely responsible for anything that he/she posts or uploads on Nairaland.