loading . . . Tinubuโs food import policy is strangulating northern agriculture ๏ฟผ
In British India, the colonial authorities noticed that there were too many cobras in Delhi, causing both health and social hazards. In response, they offered a bounty for every dead cobra. The locals were incentivized to start killing the cobras and claim their bounties, which helped to reduce the cobra population in the city, just as the authorities intended. Soon enough, however, enterprising locals began breeding cobras and killing them to claim the bounties. In response to this new development, the colonial government scrapped the bounty scheme, making the cobras worthless. In turn, the locals released the cobras they had bred, thereby making the overall cobra situation even worse than before the initial policy.
In public policy terminology, this tendency for well-intentioned policies to sometimes generate terrible results or even make the situation worse is called the โcobra effectโ or โperverse effectโ. It is a clear indication that a policy may not be working as originally intended, whatever the good intentions, and usually signals the need for policy review or abandonment. A classic example of this situation is playing out in Nigeria right now where President Bola Ahmed Tinubuโs food importation policy that started with good intentions are now generating perverse results by simply strangulating the agricultural sector in northern Nigeria, and by implication, the economy of the region as a whole.
By June 2024, when just about a year in office, the combined effects of Tinubuโs fuel subsidy withdrawal and naira devaluation policies had set the economy on a tailspin. Food inflation, in particular, had jumped by 66 per cent within a year, from 24.61 per cent in April 2023 to 40.87 per cent by June 2024. This meant that while the prices of most goods and services were rising sky-high throughout the economy, those of food in particular were rising higher and faster, taking staple foods like maize, rice, and even โcommon garriโ, out of the reach of millions of Nigerians.
The situation was so bad that people were talking openly in the national media about hyperinflation, Nigeriaโs road to Zimbabwe, and even hunger protests. In response, the government launched the Accelerated Stabilisation and Advancement Plan (ASAP) in July 2024 to address some of these pressing concerns. As a part of this policy, the government announced that it will suspend duties, taxes, and tariffs for the importation of food commodities like maize, rice, sorghum, millet, wheat, etc, and also directly import 250,000 metric tonnes each of wheat and maize to restock our depleted national reserves. This policy, the government said, was to run for 150 days, from August to December 31, 2024.
As the Nigeria Customs Service (NCS) reportedly said, the federal government would lose an estimated N188.37 billion from the import waivers during this period. Yet, given the spiralling prices of staple foods and the growing discontent against the government, many people thought this direct subsidy to private importers was worth it: the policy will bring food prices down in the short term, and give the government some time to work towards more sustainable and longer-term policies before the 2025 planting season. This is well-intentioned, no doubt.
The food importation policy was clearly intentioned to be temporary, with an expiry date of December 31, 2024. But seven months after this deadline, the government has been either unable or unwilling to suspend this policy. But by not returning to a more sustainable and longer-term policy strategy for food security and the agricultural sector more broadly, the federal government is directly generating a series of perverse or cobra effects that are now clearly on course to make the original problem of high food prices even worse.ย After all, subsidies hardly ever go away: they are only transferred, and in this case, the government is simply subsiding a handful of billionaire importers at the detriment of tens of millions of farmers across the whole northern region.
It is true that the prices of many stable foods have come down, and in some instances, quite significantly from where they were in July 2024. However, the current condition of cheap imports has perversely incentivised the government to retain the policy as an easy way out rather than work towards something more sustainable. One direct negative consequence of this situation is that the inputs for local farming have remained considerably high at the same time as food prices are down. A bag of fertiliser now sells up to N50, 000, as this newspaper reported recently. This amount is below the current price of unprocessed paddy rice, thereby completely disincentivising farming, the only job of tens of millions of Nigerians this part of the country. In other words, by retaining this policy beyond the temporary duration promised, the federal government is effectively punishing Nigerian farmers while subsidising farmers in India, Thailand, and other countries where the imports come from. That cannot be the intent.
The second perverse effect is that while food is cheaper, millions of Nigerians have no money to buy it, particularly this side of the country. This is what I have heard repeated countless times by a diverse group of Nigerians, from farmers to artisans, and from traders and civil servants to white-collar professionals across many northern states in the past several months. People know that food is cheaper, but they do not feel the relief intended by the government because they donโt have money to buy it. In the north, agriculture plays dual functions: it is both the source of food and of gainful employment/income for tens of millions of people, which in turn tie rural and urban economies in northern Nigeria organically together. So, if massive loss is the only option for farmers, as it is now, then it affects the entire regional economy.
Third, by retaining the importation policy beyond the temporary deadline, the government has disrupted the delicate balance in the agricultural policies of three past administrations in Nigeria. In order to make local food production viable, gainful and sustainable for the long-term, the federal government imposed a 70 per cent tariff on food imports, particularly rice, under Presidents Yarโadua and Jonathan. Buhari went further by banning importation for rice altogether. At the same time, Buhari launched initiatives that kept the price of fertilizer below N10,000 per bag, enabled farmers access credit at below double-digit rates, and helped farmers farm two or thrice times each planting year for most of his two terms.
These policies were undermined by the effects of the COVID-19 pandemic, the Russia Ukraine War, and, because this is Nigeria, massive corruption and racketeering in the administration of some of these policies. Still, the overall benefits of these policies far outpaced the drawbacks as farming communities throughout Nigeria were regenerated and year-on-year food inflation was generally stable, until the catastrophic naira redesign policy of his final months. More importantly, Buhariโs agricultural policies throughout the country, not just the north, are truly among the most important things the APC as ruling party can point to as a core achievement.
Unfortunately, the Tinubu government has scrapped most of these policies and found easy comfort in food importation that is increasingly costing the government billions of naira and unleashing real suffering to tens of millions of farmers across the country.
Perhaps calculations for the 2027 election make it difficult for the government to suspend a policy that is directly impoverishing tens of millions of Nigerian farmers. But anyone familiar with elections in Nigeria knows that the votes from the northern region come from the rural areas, majority of whom are the very farmers the government is pushing out of business by continuing with this policy. Perhaps the government is wary of the role of hoarders in the food chain or is worried about corruption in the implementation of some agricultural policies. These are genuine concerns in the governance climate in Nigeria. But these are no reasons to throw the baby away with the bathwater. It is time to review this food importation policy.
https://dailytrust.com/tinubus-food-import-policy-is-strangulating-northern-agriculture/
