By: Prof. Nasiru B. Yauri
In 1987, in an Advanced Level Economics class, at the State College of Arts and Sciences (SCAS) Sokoto, my Economics teacher, Late Mrs. Adama Raji, would take us through relevant pages of Richard Lipsey’s “Introduction to Positive Economics”, and we would look at the dicey nature of agricultural pricing. I realized, as far back as that time, that even the most proponents of Capitalism and Free-market economies support some amount of government’s intervention to enable farmers rake fair prices for their output. This will guarantee sustained agricultural production and food security.
From 1996 when I began to teach BUS 408, now BUS 407 (Nigerian Economy), at the Usmanu Danfodiyo University, Sokoto, I have always told my students that the worst dependency occurs when a country depends on other nations for food. In addition to this, food imports will discourage local farmers due to an unfair price war.
It happened to our local manufacturing firms at the time of the implementation of the Import Substitution Industrialisation (ISI) strategy in the mid-70s. Local manufacturing firms were completely run down by imports since countries with advanced and cheaper technology could charge less prices for their output compared to their Nigerian counterparts.
In BUS 204 (Macroeconomics) class, I many times, explained Nigeria’s worst crisis as its inability to grow its own food in spite of the enormous amount of arable land.
The experiences I have recounted above happened long before this government came to power, and therefore preceded the raging debate on whether borders should reopen or remain closed.
So, here we are in 2020, and a certain government is insisting on boosting agricultural production by creating opportunity for local farmers, quite consistent with the policy direction technical experts and academics in the field would propose as the most probable solution to the challenges in Nigeria’s agricultural sector. But then overwhelming (but largely uninformed) public opinion will be in disagreement with an expert opinion that is not consistent with their present state of “welfare”.
Let me try to explain this dichotomy of interests so that, perhaps, a common ground could be found by the policy makers/implementers on the one hand, and the critical mass of the Nigerian population on the other. At the end, we can ask once again, should the borders reopen or remain closed?
Evidence on Nigeria points to a long and sustained period of disequilibrium in local food production (local production has remained far short of demand) which cannot be easily and tolerably adjusted in a short period. To adjust this disequilibrium requires a definite government policy and programme on food production. And I have often said that the decisions and policies which will return Nigeria on a trajectory of sufficient food production will be hard and unpalatable.
The large majority of people will not understand that policies sometimes could be very strenuous, difficult and demanding. They prefer ease today, although the difficult options chosen could make tomorrow better and solve a nagging problem once and for all. I recall, however, that my “Project Management” teacher, Professor Aminu Mikailu has often explained to us the benefits of DISCOUNTING PRESENT BENEFITS FOR FUTURE ONES.
So now, the dilemma, as I have already stated, hinges on finding the appropriate logic to explain to a crowd of people who believe in reaping present benefits while risking future benefits, that protecting local farmers and local food production is key to our food security and the future of Nigeria. It appears that is the policy direction that is pursued by Nigeria at this point in time.
For most Nigerians, reopening the borders and resuming dependency on foreign supply of food is the immediate solution to our problem. If, however, we reopen the borders, one of two things will happen; and both are potentially not good for the nation.
First, foreign food, particularly rice, will flood the Nigerian market as has always been the case. Chinese and Thai producers are more advanced in technology and have better financing for agricultural investment and will therefore charge lower prices for rice and other food imports.
Certainly food prices will crash, but local farmers will become edged out of the market. This will be mainly because they will be forced to sell at prices that are competitive to the prices of imported food. Unfortunately, cost of local production is higher and this will bring losses to Nigerian farmers and an exodus from the farms in subsequent seasons. This has been proven in the long history of agricultural production in Nigeria, in which consistent migration from the farms and from the villages has drastically reduced agricultural labor and subsequently agricultural output.
The second thing that will happen is, Nigeria will return to a period of food dependency, particularly on imports of rice from China and Thailand. When this happens, Nigeria will become at risk whenever the dynamics of international trade, foreign exchange, and international relations shifts.
In fact, whenever food imports become difficult or impossible either due to difficulties in foreign exchange, or due to some misunderstanding in Nigeria’s relations with other nations, then food scarcity will hit Nigeria, since local production had already collapsed to a level it cannot sustain local demand.
Yet the same critics who are today condemning the resolve of the current Nigerian government to boost local production, will attack the government of the day (it may not even be this government at that time) for failing to ensure that there is enough food in Nigeria, produced by Nigerians.
Perhaps upon diligent consideration of the dilemma as presented in these short paragraphs, Nigerians could further contemplate the question, should the borders reopen or remain closed?
Photo: Seme Border Post.
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