FG moves to support farmers as food prices drop below production costs

The federal government has announced plans to intervene in the agricultural sector to support farmers following a decline in food prices that has, in some cases, dropped below production costs.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this known on Thursday during his keynote address at the launch of the Nigerian Economic Summit Group (NESG) 2026 Macroeconomic Outlook Report in Lagos.

According to the minister, the government’s priorities for 2026 include strengthening competitiveness, promoting good governance, boosting agricultural productivity and food security, and urgently assisting farmers whose operating costs are no longer covered by prevailing market prices. He added that these efforts would run alongside accelerated investment in infrastructure, energy and human capital development.

“There is a point now to help the farmers, because prices have come below, in some cases, their costs, and that is being addressed very, very urgently, in order to ensure that we encourage continued investment in food production,” the minister said.

Mr Edun’s remarks come amid a sustained moderation in both food and headline inflation, following months of tight monetary policy and supply-side reforms.

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Data as of December 2025 show that food inflation fell sharply to 10.84 per cent year-on-year, compared with 39.84 per cent recorded in December 2024. Food inflation has been a major driver of overall inflation in the country.

The easing has been attributed to improved food supply conditions, reduced foreign exchange pressures and lower import costs.

While consumers have benefited from declining food prices, the minister cautioned that prolonged prices below production costs could undermine farmers’ incentives, potentially threatening food supply and reversing recent gains in price stability.

He said the government was seeking to balance affordability for consumers with adequate incentives for producers, particularly smallholder farmers who are most vulnerable to cost pressures.

Beyond agriculture, Mr Edun said Nigeria has exited the crisis stabilisation stage and is now entering a consolidation phase after two years of politically difficult economic reforms.

He noted that the country has recorded improved macroeconomic stability, including reduced foreign exchange volatility, stronger external reserves and growing investor confidence. However, he warned that these gains must be safeguarded.

According to him, the consolidation phase demands discipline, policy consistency and a commitment to sustaining reforms, stressing that Nigeria “cannot afford to pause or retreat” if stability is to translate into long-term growth, job creation and poverty reduction.

The minister said the reform agenda has already begun to enhance Nigeria’s global standing, citing the country’s removal from certain international risk lists and improved assessments by credit rating agencies.

He also highlighted stronger performance in the capital market, noting that stock market capitalisation has risen to levels that could boost Nigeria’s visibility in global investment indices and expand access to long-term financing.

Mr Edun said this was particularly important at a time when concessional financing and multilateral funding are declining globally, increasing the need for domestic savings and private investment.

Looking ahead, he described the 2026 budget as one focused on consolidation, renewed resilience and shared prosperity, with the aim of converting macroeconomic stability into tangible improvements in living standards.

He said key priorities would include food security, improved electricity supply, expanded access to mortgages, road infrastructure development and social protection for vulnerable Nigerians.

The minister added that the government would continue efforts to improve revenue collection, plug leakages and implement a pro-poor tax framework that exempts essential food items and small businesses while broadening the tax base.

According to him, the success of the consolidation phase will determine whether Nigeria achieves sustained, inclusive and job-rich growth in the coming years.

(PREMIUM TIMES)