Smoothening Trends of Food Prices in Nigeria: Political Economy and Policy Vistas

The food crisis of 2008 in Nigeria was influenced by price changes in the world market and the escalation of the price of imported fuel into Nigeria which led to sharp increases in the prices of agricultural inputs and transportation cost. The soaring prices of food staples benefited the producers whereas there was a worsening of malnutrition among the poor. To cushion the effects within the short-term, the government released grains from the reserve, ordered the import of half a million tonnes of rice to be sold at a subsidized rate and suspended the tariff on rice imports. The policy measures adopted caused a reversal of the trend of food price increase within six months, generated awareness about the nutritional importance of major food staples, and led to changes in preferences in the demand for food commodities and stimulated increased financing for commercial agriculture. This study sought to (i) examine the political economy issues surrounding the 2008 food price crisis, (ii) analyse the performance of the medium-term policies and strategies to prevent a recurrence of the 2008 episode and (iii) draw policy implications for price stability in the country. The study found that the country has not been under any threat of food crisis since the 2008 episode. Right from 2011, the medium-term policies and strategies were re-designed and entrenched as major components of the agricultural transformation agenda (ATA). The implementation of the ATA has led to an increase in domestic food production, reduction in food import and stabilization of food prices.