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FEC approves measures to reduce food prices

Daniel Daniel
09 Feb, 2017 In General0 Comments , leave one
FEC approves measures to reduce food prices
The Federal Executive Council has approved some measures to reduce food prices.

According to the Agriculture Minister Audu Ogbeh who briefed State House correspondents at the end of the Federal Executive Council (FEC) meeting the committee identified that the hike in cost of food is not caused by shortage but high cost of transportation.

He noted that food items were moved across Nigeria by heavy trucks, which run on diesel. The price of diesel has gone up adding that the government has decided to start using railway wagons to transport food items.

Ogbeh said: “We had a committee set up last week to look at the issue of hike in food prices and we submitted an interim report today. Our work is almost rounded off.

“We identified the causes of food price increases. The good thing is that there is no real shortage of food. There is food but the prices are a bit too high and Nigerians are groaning under the pain.

“One of the things we found out is that the cost of transportation is becoming extremely high, especially because most of our transportation is by road and diesel prices have gone up and trucks are finding it difficult to move from place to place at old prices.

“So we considered the following alternatives: using railway wagons along the current railway network. As we did before when we moved cattle from North West to Lagos, we brought down the cost and avoided the multiple taxation on transporters by local governments which delay movement.

“We have decided to work with the state governments and the police to reduce delays. We are going to adapt what they have in Ivory Coast. Trucks carrying foods are given labels. In fact, in Ivory Coast, they cannot be stopped for more than 10 minutes anywhere.

“Even if something serious has happened, the security agencies will follow them to their destinations and come back to investigate whatever has happened.

“Finally, we shall be looking into our reserves, if in the next few days, the situation persists, to see what we can bring out to lower the prices because another bumper harvest will be coming up again at the end of March.

“There is really no starvation in the land. The other factor is what you know already. There is a lot of pressure on Nigerian food from West, North and Central Africa. Our food production is very robust and we are doing pretty well.”

To discourage importation of tomato paste, the Council also approved increase of tariffs on imported tomato paste.

Trade and Investment Minister Okechukwu Enelamah said: “Council approved a set of measures to boost production and attract investment into the Nigerian tomato sub-sector. This is a sector that has lots of farmers, in a state like Kano alone there are 75,000 farmers and so it is important to encourage them.

“And so we approved a set of measures to encourage them both in local production as well as to attract more investment into tomato farming, processing all the way, the value chain to how tomato gets to our tables.

“These measures will include things we are doing to make sure we plant tomato round the year, things like green house equipment, making sure that they can come in without any barriers or duties. They also include the use of both tariff and non tariff measures to address the issues Nigerians are most concerned about, which is the issue of dumping, issues around quality and the standards of what we consume.

“We also approved a set of measures that will boost local production in terms of financing seeds and all the other things.”

“Let me say that the most important thing about this set of policies is that in our approach we are going to be working with the stakeholders to actually implement the polices. So, we are going to set up an inter-ministerial committee that will work with the private sector and with different stakeholders to make sure that the implementation of the policy itself is not only done transparently but also robustly to ensure that we achieve the desired objective which is to make sure that we become self-sufficient in tomato within the next one or two years,” he said.

He added: “The issue of tariff to discourage import, dumping was very central to the approval of the memo. Most definitely, we are not coming down. We are going to go up. We will be announcing what the new tariffs are but clearly there is a new set of tariff that will discourage dumping. You can take that to the bank. To boost local production we are interested in all the input factors that will boost production.

“On financing, the Central Bank has been working with the tomato farmers already. I am confident that the measure taken will boost production. The minister of Science and Technology is working with us in terms of both the production methods and equipment

“In terms of the things that will boost year round production of tomato, notably the green house equipment, the duties on those will be zero so that the equipment will come in. Before now the duty on green house equipment is 20%. So, we are removing that to make it possible for people to grow tomato all-year round.

“We are going to restrict import of finished tomato products that can be produced locally, so all the products that people bring in, in terms of paste and powder and all those things will be restricted because they can be manufactured locally.

These things will be rolled out right away; these are policies for this year. We are going to use tariffs and levies as well to discourage imports of tomato paste and those levies will be used to develop the local industry just like we have done in the sugar and cement industry.

“We are also going to restrict the importation of finished products from other ECOWAS countries where products are dumped then transported across our borders, making sure those risky products don't go through our land borders, if you want to import them you have to go through the sea.

“We are going to make sure that in terms of incentives which goes back to production, the Nigerian Investment Promotion Commission will make sure that the production of tomato gets its pioneer status We are also working on financing from the CBN. In terms of financing of production, we are also working with the ministry of Agriculture on seedling quality and so on.”

The Council took the decision based on the interim report submitted by the food task force set up last week on how best to address the rising cost of food items across the country.

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