The Impact of COVID-19 on Agriculture and Supply Chain on the Nigerian Economy
It is no longer news that COVID-19 Pandemic is disrupting critical activities in agriculture and supply chains sector. Reports from qualitative study shows that the non-availability of migrant labour is interrupting some cultivating and harvesting activities, leading to losses particularly in South west geo-political zone of Nigeria where cash crops like cocoa, Kola nuts, and cashew are being harvested. There is disruption in supply chains because of transportation problems and other issues. Prices have declined for cereals, vegetables, and other crops, yet consumers are often paying more. Reports from the media and public domain shows that the closure of hotels, restaurants, shopping Malls, supermarkets, and kiosk during the lockdown in big cities like Lagos, Abuja, Kaduna, Kano, Portharcourt etc is already depressing agricultural sales. Poultry farmers and the leather industry have been badly hit due to misinformation, particularly on social media, that animals like birds are the carriers of COVID-19.
Economically, the lockdown has choked off almost all economic activities in urban areas like Lagos and Abuja, leading to the widespread loss of jobs and incomes for informal workers and farmers who are stuck at home with no ability to access their farms. Estimates by Bismark Rewane’s Financial Derivatives Company market survey and regression shows a spike in the year-on-year headline inflation to 12.95% in April from 12.26% in March. This will be the 8th consecutive monthly increase and the highest inflation rate since 2018. The survey from Financial Derivatives Company is based on the normal economic conditions. However, macroeconomic conditions in times like this are far from normal due to COVID-19, causing panic buying and fear of the unknown. It is noteworthy that the pace of increase in headline inflation, which has eased over the last 3 months, has begun its upward spike. Similar to the annual price trend, the month-on-month inflation (a more accurate measure of prices) is projected to increase sharply by 0.72% to 1.56% (annualized at 20.38%). The sharp increase was due to a number of factors including the earlier border closure, lockdown, exchange rate pass through effect and the planting season. The commodities that were mostly impacted are rice, garri, sugar, vegetable oil and wheat flour.
The situation has become pertinent for all hands to be on deck for this to be corrected in order to put the economy on the right path. So here are some measures required to keep the agricultural sector and supply chains working smoothly;
The government has correctly issued lockdown guidelines that exempt farm operations and supply chains. But implementation problems leading to labour shortages and falling prices should be rectified.
It should be noted that 2 to 3 million deaths in the Bengal famine of 1943 (a famine in the Bengal province of British India during World War II.) were due to food supply disruption and not a lack of food availability. Keeping supply chains functioning well is crucial to food Security and a solution to food crisis.
Farm populations must be protected from the coronavirus to the extent possible by testing and practicing social distancing. This is in line with Nigerian Centre for Disease Control (NCDC) that there is community transmission and the larger population of farmers in Nigeria are of the rural populace. Therefore sensitization of the rural community on ways of how they can protect themselves should be initiated by the government.
The Government in spite of the lockdown must allow farmers to have continued access to markets. This can be a mix of private markets and government procurement rather than being harassed by the law enforcement agents.
Poultry and dairy farmers need more targeted help, as their pandemic-related input supply and market-access problems are urgent.
Farmers and agricultural workers should be included in the government’s assistance package and any social protection programs addressing the crisis more than any other sector.
As lockdown measures have increased, demand has risen for home delivery of groceries and E-commerce. This trend should be encouraged and promoted. This calls for improvement in agric-technology for sale of agricultural produce or input.
The time has come for the government to trade by avoiding export bans and import restrictions.
By and large, COVID-19 is an unprecedented challenge for Nigeria; its large population and the economy’s dependence on informal labour make lockdowns and other social distancing measures hugely disruptive. The federal and state governments have recognized the challenge and responded aggressively. Nigeria must be prepared to scale it up as events unfold; providing palliatives to rural communities to enable them practice the COVID 19 Safety rules, easing the economic impacts through even greater public program support and policies that keep markets functioning rather than constitute a clog especially in the wheel Agriculture and food chain.
