REIMAGINING NIGERIA’S GRAIN MARKET
REIMAGINING NIGERIA'S GRAIN MARKET: UNVEILING OPPORTUNITIES AMIDST CHALLENGES FOR SUSTAINABLE AGRICULTURAL DEVELOPMENT
The International Grains Council put Nigeria’s total 2022-2023 grain production at 21.6 million tonnes, with maize at 12.5 million tonnes, sorghum at 7 million tonnes and rice at 5.4 million tonnes. Only 57%t of the 6.7 million tonnes of rice consumed in Nigeria annually is locally produced, leading to a deficit of about 3 million tonnes, which is either imported or smuggled into the country. <sup>4</sup>
CHALLENGES
The Nigerian grain market faces a number of challenges, with climate change standing out as a significant obstacle. The effects of climate change are seen in unpredictable weather patterns, such as erratic rainfall, higher temperatures, prolonged droughts, and flooding. These elements have a significant impact on the agricultural processes involved in grain farming, which can have negative effects including reduced crop yields, increased susceptibility to diseases, and, in extreme situations, the whole loss of a farming season. For instance, erratic rainfall disrupts planting schedule and affects production. Prolonged drought cause moisture stress, which has a negative effect on agricultural output. Upland rice farming regions can be severely damaged by heavy flooding, which can submerge crops, erode soil, and drastically reduce yields.
Insecurity also poses as one of the major bottlenecks in the grain market. The increasing incidents of banditry and clashes between farmers and herders have created an atmosphere of fear and instability within farming communities. Farmers have been severely hit by these security issues, which have resulted in the loss of their farmlands and, in some tragic cases, the displacements of entire communities in search of safety. Insecurity in the agricultural sector requires immediate action from various stakeholders. Enhancing security measures, promoting dialogue between conflicting parties, implementing sustainable conflict resolution strategies, and providing adequate support to farmers are crucial steps. The government, law enforcement agencies, community leaders, and other stakeholders must work together to create a secure environment for farmers to safely engage in agricultural activities. This is vital for the well-being of individual farmers, the resilience of the grain sector, and the entire Nigerian economy.
The foreign exchange market is another cause for concern. The high Naira to Dollar exchange rate is causing significant challenges to Nigerian’s agricultural sector, particularly for farmers who heavily rely on imported inputs like fertilizers and seedlings. This has resulted in the increase in the cost of these inputs, making it difficult for farmers to afford necessary supplies, affecting their ability to maintain or enhance production levels. To address these challenges, efforts are needed to stabilize the foreign exchange market thereby reducing the impact of exchange rate fluctuations on the agri-sector. Measures such as providing support mechanisms, subsidies, or incentives for farmers to access essential agricultural inputs at affordable rates could help alleviate the financial burden. Implementing policies aimed at stabilizing the currency, improving local production capacities for agricultural inputs, and promoting initiatives that enhance the value chain within the agricultural sector can also contribute to alleviating the adverse effects of currency fluctuations on agricultural productivity and food security in Nigeria.
CONTRIBUTIONS TO THE NIGERIAN ECONOMY
According the International Institute of Tropical Agriculture (IITA), more than 300 million Africans depend on maize as their main staple food crop. 7 Nigeria exports grains to various nations, serving as a major supplier within Africa. As the world’s second-largest producer of sorghum, surpassing all others except the United States, Nigeria’s projected exports for 2023 stand at 50,000 metric tons. 8 This export activity significantly contributes to Nigeria’s foreign exchange earnings, aiding in balancing the import-export trade margin.
Additionally, the grain industry helps in creating job opportunities. In Nigeria, grain farming is a sizable agricultural industry that employs both skilled and unskilled labour. Furthermore, grains are the main source of raw materials for many different industries. For example, a 2022 report from the United States Department of Agriculture (USDA) states that maize is a necessary component in the production of animal and aquaculture feed. 9 Industries that depend on these raw materials would face difficulties in the absence of a consistent supply from the grain market, highlighting the market’s critical contribution to the efficiency of other sectors.
As earlier stated, the Nigerian grain market comprises of certain staples, such as, maize, wheat, sorghum and rice. Like other sectors, it is faced with some challenges such as; climate change, lack of sufficient access to finance and sophisticated equipment, insecurity and fluctuations of foreign exchange rates.
Despite the numerous challenges it is faced with, it remains an integral part of the agricultural sector, which is a major contributor to Nigeria’s GDP.
2 n(1) 3 World-Grain, ‘Focus on Nigeria’ https://www.world-grain.com/articles/17302-focus-on-nigeria
4 FAO, ‘Nigeria at a Glance’ https://www.fao.org/nigeria/fao-in-nigeria/nigeria-at-a-glance/en/
5 Ayomide Adebayo, ‘Rice Farming in Nigeria: Harvesting and Processing techniques’ https://afrimash.com/rice- farming-in-nigeria-harvesting-and-processing- techniques/#:~:text=One%20of%20the%20major%20challenges,increase%20labour%20costs%20for%20farmers
6 InfoGuide, ’10 Roles of Agriculture in Nigeria Economic Development’ https://infoguidenigeria.com/role-of- agriculture-in-nigeria-economic-development/
7 IITA, ‘Maize’ https://www.iita.org/cropsnew/maize/
8 USDA, ‘Grain and Feed Annual’ https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed %20Annual_Lagos_Nigeria_NI2022-0005.pdf
9 n(9)