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The Centre for the Promotion of Private Enterprise (CPPE) has called on the Nigerian government to urgently adopt what it described as a “rules-based Farm Price Stabilisation and Farmer Income Protection Framework” to safeguard food security, rural livelihoods and long-term agricultural investment.
The call was made in a policy brief released on Sunday and signed by CPPE’s Chief Executive Officer, Muda Yusuf, against the backdrop of a sharp decline in the prices of major staple food commodities across the country.
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According to the brief, CPPE acknowledged that the federal government’s recent food security measures have delivered short-term relief to consumers through lower food prices and moderated food inflation.
However, it warned that the steep fall in prices of key agricultural commodities has inflicted heavy losses on farmers and investors across the agricultural value chain.
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Nigeria’s food insecurity crisis
Nigeria has in recent years grappled with a severe cost-of-living crisis, largely triggered by President Bola Tinubu’s economic reforms, particularly the removal of petrol subsidies and the floating of the naira.
These measures led to sharp price increases, with food inflation reaching alarming levels before moderating slightly following the rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS) early last year.
The crisis also sparked nationwide hunger protests, with many Nigerians expressing frustration over the government’s handling of the economy. Despite interventions such as an increased minimum wage and food subsidies, the impact has been limited, as food prices remain high amid a steep decline in purchasing power.
The situation has been described as dire, with many families struggling to afford basic necessities. During the 2024 festive season, fatal stampedes were recorded during relief food distributions in several parts of the country.
Beyond weak policy implementation, food system experts have repeatedly identified climate change, poor post-harvest handling, inadequate storage and transportation infrastructure, and weak market regulation as key drivers of the food insecurity crisis.
In a recent warning, the United Nations, through its Office for the Coordination of Humanitarian Affairs (OCHA) in Nigeria, said about 35 million Nigerians were at risk of acute hunger this year.
Falling food prices
In recent months, consumers across the country have observed a significant drop in the prices of major staples, largely attributed to government reforms, including massive grain importation aimed at addressing supply shortfalls.
While households have welcomed the relief, farmers and food vendors have expressed mixed reactions.
Local farmers complain that large-scale food imports have depressed prices at harvest time, making it difficult for them to recover the high cost of inputs such as fertiliser, seeds and pesticides. Many say they are being forced to sell at a loss due to market glut.
“Yes, the prices of food items have dropped significantly, but we are concerned because we are currently in the harvest season. It is expected that prices will drop. We don’t know if prices will shoot up again during the lean season. So we are still observing,” said Abdulsalam Yunus, a raw food vendor at Lugbe Market in Abuja.
In an interview with PREMIUM TIMES on Sunday, Mr Yunus said the prices of both local and foreign rice have fallen sharply compared to the same period last year.
“Last year by this time, we were selling local rice at about ₦80,000 and above per bag, while foreign rice was going for ₦105,000 to ₦150,000 per bag, depending on the grain size,” he said.
“Now, local rice is going for ₦52,000 and above, while foreign rice sells for about ₦62,000 and above, depending on how clean it is.”
He added that beans have recorded similar price reductions.
“A 100kg bag of beans now sells for about ₦75,000 and above, compared to ₦180,000 and above last year,” he said.
Consequences
According to CPPE, while the welfare gains of cheaper food are significant, the unintended consequences for producers are equally profound and pose serious risks to Nigeria’s agricultural sustainability.
“There is an urgent need to strike a sustainable balance between keeping food affordable for consumers and protecting farmers’ incomes,” the policy brief stated, warning that persistent price collapses could undermine confidence, discourage investment and weaken one of the country’s largest sources of employment.
The organisation noted that recent surges in food imports—particularly staples such as rice, maize and soybeans—have disrupted domestic markets, depressed farm-gate prices and weakened incentives for local production.
Although consumers have welcomed lower prices, CPPE cautioned that prolonged income losses could eventually reduce output and trigger renewed cycles of scarcity and higher food prices.
The think tank attributed recurring farm price collapses not only to import pressures but also to structural weaknesses, including harvest gluts, inadequate storage and cold-chain facilities, poor rural logistics, insecurity and limited processing capacity.
These factors, it said, force farmers into distress sales immediately after harvest, only for prices to spike months later when supplies tighten.
Recommendations
To address the challenges, CPPE called for the establishment of a National Farm Price Stabilisation and Farmer Income Protection Framework that is rules-based, market-friendly, targeted and digitally enabled.
The framework, it said, should focus on correcting market failures rather than crowding out private enterprise.
A key recommendation is the introduction of Minimum Guaranteed Prices (MGP) for selected priority crops, including maize, rice (paddy), sorghum and soybeans, to protect farmers from severe price crashes. CPPE stressed that the price floors should operate strictly as a stabilising backstop, supported by transparent pricing methodologies and adequate storage capacity.
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The organisation also urged reforms of Nigeria’s Strategic Grain Reserves into a professionally managed buffer stock system that buys during harvest periods and releases grains during lean seasons to reduce price volatility.
In addition, CPPE advocated the nationwide expansion of the Warehouse Receipt System to curb distress sales, strengthen structured commodity trading and improve farmers’ access to credit. It also recommended structured institutional procurement through programmes such as school feeding schemes, relief operations and military supply chains to guarantee offtake for local producers.
CPPE further called for major investments in storage, cold-chain infrastructure, agro-logistics and processing capacity through public-private partnerships, noting that agro-industrial development is essential for absorbing harvest surpluses and stabilising prices.
On risk management, the policy brief urged the expansion of agricultural insurance schemes, including weather-index and revenue insurance, alongside predictable trade safeguards to prevent import-driven price crashes. It also emphasised the need for a national agricultural market information system to improve transparency and efficiency.
CPPE warned that Nigeria’s agricultural transformation cannot be achieved without stabilising farmer incomes.
“Price collapses destroy incentives to farm, worsen rural poverty, and weaken food security,” the organisation said, calling on federal and state governments, commodity exchanges, development finance institutions and private investors to collaborate in building a transparent, fiscally sustainable and market-friendly stabilisation framework.
