Give Manufacturers Palliative If You Want Cheap Food, BUA Tells Tinubu

Large-scale food manufacturers in Nigeria are asking for inclusion in the distribution of palliatives targeting the country’s agricultural sector, as the only way to make food cheaper.

Ayodele Musibau Abioye, the Managing Director of BUA Food Plc made the demand on Thursday during an interview on Arise TV monitored by THE WHISTLER.

Food prices have become out of the reach for the poor due to the removal of fuel subsidy and the floating of the naira. Food inflation was measured by the National Bureau of Statistics in June at 25.25 per cent.

In response, President Bola Tinubu is dishing out N200bn to small-scale farmers to ensure prices of food crash in the shortest time possible.

Abioye said, “What I think is very important to talk about is that we need to look at the food system holistically. This is because if you provide palliative on one end of the system, and you do not consider the other end, it goes away and it does not actually get to the common man.

“So, what we should look at is to look at the food system. It starts with the production, it starts with the processing distribution and of course the consumption. And the production side agriculture is being looked after.”

Tinubu in his last national address unveiled plans to release 200,000 Metric Tones of grains, 225,000 tonnes of fertilizers and seedlings to farmers across the 36 states and the FCT.

Tinubu said, “Our plan to support cultivation of 500,000 hectares of farmland and all-year-round farming practice remains on course. To be specific, N200 billion out of the N500 billion approved by the National Assembly will be disbursed as follows: Our administration will invest N50 billion each to cultivate 150,000 hectares of rice and maize.

“N50 billion each will also be earmarked to cultivate 100,000 hectares of wheat and cassava.”

But Tinubu said the expansive agricultural programme will be implemented targeting small-holder farmers.

Abioye said, “Sincerely if that is done and you multiply it, it is about 6 million metric tons of paddy rice which will be very useful for most of us that are in the rice milling business. It will go a long way in addition to other efforts as it were.

“I think the palliative needs to be extended across the entire food system. Because for us in manufacturing in particular, if we get some palliative, we are able to pass on the cost in terms of abating the cost of goods such that we can also ensure our end consumer at the end of the day is able to have an affordable price competitive on their table. This is the place is it critical.”

The cost of production based on BUA books which was N188bn out of N320.9bn revenue in the first half of 2023 demonstrates how expensive it is for manufacturers in the industry to operate.

He said the issue of power is a local problem that has impacted many manufacturers.

The MD said gas which is used to power its plant comes with a huge cost.

“How can we make sure that gas energy is democratised and liberalised to come at a lower price to industries such that we are able to also pass this cost down the value chain.

“In the big manufacturing we are using gas energy as it were, the others that are SMEs are probably relying on diesel which is more expensive than gas. If they are able to reduce something across the board, which is why I said the manufacturing palliative is very important.

“The government has done some, but more needs to be done. The critical thing is to look at the entire food system, apply the palliative across wherever it is needed to ensure that prices benefit to get to the end user.”