How private security measures on farm investments push food inflation
• Average spending on security measures costs N1m per farm
As kidnapping for ransoms and killing of farmers escalate countrywide, high cost of ensuring security of life and property on most farms has pushed up cost of production and food inflation in the country amid other production constraints.
Surveys by The Guardian revealed that Nigerians spend more than twice the size of their normal monthly budgets on food now as food inflation rises. The first quarter report of the National Bureau of Statistics (NBS) disclosed the fact categorically.
The NBS data states: “The composite food index rose by 20.57 per cent in January 2021 compared to 19.56 per cent in December 2020. This rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fruits, vegetable, fish and oils and fats.”
In the last few years, insecurity has metamorphosed from Boko Haram terrorism in the northeast to banditry in the entire northern Nigeria and kidnapping in every part of the country.
Herder/farmer clashes have also claimed thousands of lives and displaced millions who now reside in internally displaced peoples’ camps across the north. Hence, the combined security threats have dislocated the workforce for yearly cultivation of crops, harvesting, transportation and processing of food, among other value chain activities.
The available food, therefore, is produced with too much resources, making the cost unbearable to Nigerians. This is affirmed by commercial farmers who spoke with The Guardian.
A commercial farmer and food processing entrepreneur, Mr Kolawole Adeniji, who is also the Managing Director of Niji Foods Ltd, in Oke-Iho, Oke-Ogun area of Oyo State, said to keep his workers, crops and farm property protected, he engages 20 vigilante members whom he pays N30,000 each monthly.
Again, as the managing director, he needs three Special Protection Unit (SPU) officers of the police in and out of the farm to prevent kidnapping and assaults. Other paraphernalia provided to the security personnel, according to him, include motorcycles and patrol vans with maintenance cost.
He said the cost implication of the personal security arrangement on the farm and processing facilities is over N1.5 million monthly.
“In other safer countries, farmers do not spend on personal security. The governments also give their farmers subsidised inputs and farm insurance. Everything is not working in Nigeria now. Insecurity will not let food prices come down.
“Cost of farm operations has also gone up. A bundle of cassava stems, which was N500, is now N2500. Cost of a tractor has gone from about N6 million to over N16 million,” he lamented.
Another commercial farmer and founder of a poultry hatchery in Ibadan, Terudee Farms Ltd, Mr John Olateru, also reiterated the burden of security cost on business survival and profitability, saying, it had become a necessary cost to invest in means of securing self, workers and farm investments in the face of rampaging killings, kidnapping and other threats.
He disclosed to The Guardian that he spends at least N200,000 on security monthly, pushing up the cost of production and reducing profitability marginally.
Managing Director of Agro Park Ltd, Mr Sola Olunowo, also bemoaned the security challenges facing farmers and Nigerians.
His farm in Ogun State falls under the jurisdiction of three police divisions because of the large hectares of land cultivated. It costs him over N200,000 in cash and products to get police cover twice a week moving round the farm and responding to emergency calls.
Also, six guards – two for days and four for nights – are employed directly by the farms. The cost on the guards and fuelling of vehicles and motorcycles runs into N300,000 conservatively in a month.
At another farm location in Tede, in Oke-Ogun area of Oyo State, the farm spends equally about N500,000 monthly. In a nutshell, the farm spends nothing less than N1 million to maintain security measures on the two farm locations, according to Olunowo.
Secretary of the All Farmers Association of Nigeria (AFAN), Oyo State chapter, Prince David Bamidele Ogundele, said a minimum of N20,000 is spent on securing one hectare of land monthly by each farmer to avoid farm destruction by herders and stealing of produce.
Also, the chairman of the association in the state, Mr Olumide Ayinla, said women farmers were being raped and farmers kidnapped daily. He said it was no longer safe to farm, and the cost of farming was getting unsustainable as more resources were allocated to ancillary security measures rather than core farm operations.
He called on the Federal Government to take the security of life and property more seriously, as this might push food inflation to the unbearable levels.
A multi-million-naira poultry investor in the country, who prefers anonymity, disclosed to The Guardian that the company spends between N2.5 million and N4 million monthly on ensuring security of poultry farms, feed mills, hatcheries and chicken abattoirs.
He said failure to do so would engender not only the lives of workers, suppliers, business partners, farm property but also investments. But the cost incurred contributes to high selling prices of feeds, chickens, beef, day-old chicks and other products of the company.
Meanwhile, the National President of the All Farmers’ Association of Nigeria (AFAN), Mr Kabir Ibrahim, acknowledged insecurity as a disincentive to farmers. He, however, said spending millions of naira on securing farms in Nigeria would not make economic sense to any small-scale farmer. He lamented that most small-scale poultry farmers had stopped production because of cost of feeds caused partly by insecurity as grain farmers had been displaced.
As the situation remains hopeless in the face of inertia on the part of the government, and low morale of security personnel continues unabated, food production will likely remain encumbered, and Nigerians may have to pay more for less food.