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Fuelling Hunger: Implications of increase in pump price of petroleum on food security in Nigeria

Being text of a joint press conference by ActionAid Nigeria and Oxfam GB Nigeria on the implications of increase of pump price of fuel on food security in Nigeria at Bolton White Hotel, Area 11 on Wednesday, October 25, 2011

The recent announcement by the federal government of intention of withdrawal of fuel subsidy by January 2012 has generated debates and several statements of concern from individuals, interest groups, professionals and labour The reasons given by the government for the proposed hike in the pump price of fuel has been severally contested and described as unconvincing given the fact that the country is a major producer of crude oil. Many have also argued that the federal government’s grounds for the increase in petroleum price have always sounded more like punishing the general public for the benefit of few individuals who benefit from the trade.

. Between 1998 and now the price increase has taken place at least seven times with a litre of petrol soaring from N11 to N65 while within this same period, the price of crude oil rose steadily from $20 in 1998 to $147 in July 2008  per barrel. As at 7:00am on Monday this week, Nigeria’s Brent sold for as much as $109.73.

The people at the receiving end of these hikes are always the poor, women and children. Quoting late Beko Ransome-Kuti in the Newswatch in 1999, Janet Mba-Afolabi wrote that “the outrageous price increase had made life unbearable for Nigerians as prices of goods and transport fares had risen, forcing people to trek long distances”

Implication of increase in pump price of fuel for food securityThough several bodies and individuals have highlighted implications of the increase pump price of fuel on the economy and on the poor especially, we find it both important and urgent to also call attention to the effect any rise in pump price of fuel would have on food security in Nigeria.

Agricultural system globally consists of production, processing, storage, marketing, extension, research and training. All of these items are however tied to use of petroleum products, especially the petrol and diesel in transportation and other petroleum derivatives such as herbicides and other chemicals for pest control.

The Nigeria federal government in taking its decision on hiking the price of petroleum obviously did not consider the implications of such for a nation which its food production is largely dependent on the peasant farmers. With more than 12 million undernourished people, nearly a third of children underweight and 38 per cent of children showing signs of chronic malnutrition  there is clear evidence that food is not enough and need to be strengthen. Any policy decision undermining food production is hereby ill-advised

The Nigeria peasantry live mostly in remote and hard to reach locations with roads that have either totally collapsed or have been pending for construction for decades. Construction and or repairs of these roads have been given as part of the reasons for the increase in petroleum products prices in the past. Unfortunately, these have turned out to be mere ruse for government to achieve its aim of hiking fuel prices. At a time the Nigeria federal government has indicated interest in putting agriculture back on the political agenda, increasing fuel price given its strategic role in food production and distribution is not a good signal and is counterproductive.

It should also be noted that the peasant farmers all over the country are largely dependent on the transport system which because it has little or no government input is perhaps one of the most erratic and volatile in the world. Transportation of goods and people from the remote farms where foods in Nigeria are produced are largely run by private individuals without government intervention and as such are easily affected by market forces and changes in prices of accessories and fuel.

Newswatch magazine reporting the effect of the January 2002 rise in pump price of fuel in urban centres is quoted below:

Nigerians have started experiencing more hardship as a result of the fuel price hike especially in terms of transportation. In Lagos and other parts of the country, transport fares have been increased by between 80 and 100 percent even though the fuel price hike is 18 percent. For instance, transport fare from Palmgrove to Ojota which was formerly N20 went up to N50, while that of Oregun to Ikeja has been increased from N10 to N20. Commercial drivers on long routes have also increased their fares. Transport fare from Lagos to Port Harcourt now goes for N2, 500 instead of N1,800.

With Nigeria major cities experiencing as much as a hundred per cent and above increment in cost of transportation, the rural Nigeria definitely would suffer untold hardship with roads that are unattractive to transporters and with occasional vehicles going there to move people and farm produce.

This also has grave implications for food security in the country. Rise in the cost of transportation would definitely affect cost of moving farm produce to markets where such can be accessed by consumers. Invariably it is expected that prices of staple foods will skyrocket as a result of rise in transporting them to the markets.

Unfortunately, the rise in the price of food occasioned by rise in the pump price of petroleum would not guarantee improvement in the lives of the farmers who are likely to pay more to get their farm produce to the markets and would also be left open to exploitation by middle folks who brave the dilapidated roads to the farms. This is likely to serve as disincentive for young people to remain on the farms and invariably would lead to further migration from the farms to urban centres, further reducing the farming population.

As the increase in the pump price of fuel hamper the normal flow of goods and food within the country and the increased cost of transportation is transferred to the prices of food items there definitely would be huge limitation on the ability of poor households to buy food at reasonable prices. Apart from these poor households spending most of their earnings on staple foods, it is also envisaged that this would further impact negatively on an already deficient nutrition status of poor households in the country.

In 2005, two Agricultural Economists, Raphael Babatunde and Eniola Oyatoye have in their study of food security situation in Nigeria have stated clearly the impact of fuel on food security. According to them “Increased cost of petroleum products and spare parts has also led to increased transportation cost. - - - The combination of these factors led to increased transportation cost, which result to high consumer food prices that contribute in no small measure to food insecurity in the country.”

Attack on the poor?In our opinion, in a country where studies by both national and international agencies have shown that prices of food have increased in recent years with as much as 100 per cent and where price of fuel and cost of transportation impact heavily on cost of food, increase in the pump price of petroleum now or in the future is a direct attack on the poor. It will force more people into poverty and hunger.

There are -evidence that the poor are already under severe pressure and the cost of feeding in poor households has grown in recent times to the extent that any further pressure on their lean resources by the Nigerian state would amount to a targeted vicious attack on the poor and socially disadvantaged.Thus it is also our belief that it is not in the interest of the nation for government to venture into such ill-advised project,

We hereby call on the federal government of Nigeria to refrain from such act, moreso as the government has admitted that very few privileged individuals are beneficiaries of this much contested fuel subsidy.

We also advise that the federal government rather than put more yoke on the poor in the country review its accountability process, especially in the oil sector and concentrate efforts at living up to its obligation of providing basic services to the people rather abdicate such as it is wont to do in recent times.

Finally it is the obligation of the Nigeria state to protect the poor rather than visit on them further deprivation and hunger as its current attempt at increasing pump price of petroleum would amount to.