Mixed blessings for food businesses in virus times
The outbreak of corona-virus (COVID-19) pandemic was indeed a trying time.
Before the lockdown was announced last month, millions of Nigerians were already overwhelmed by urban challenges, such as power supply, traffic and sanitation.
The effects of Covid-19 restrictions on people worsened the situation.
Though several areas of the economy were on lockdown, the food subsector was not, thereby making grocery stores, among others, to be busy.
To mitigate the effects of the lockdown, the government allowed the food subsector to open. This allowed many people to stock essential items, such as onions, yams, garri, potatoes, rice, garri, bread, salt, sugar, noodles, beverages and drinks.
Food shops witnessed huge orders from consumers of flour, canned meat and fish, vegetables, rice and other staples.
There was an explosion in sales as residents buy fruit juices and pulps, dehydrated and frozen fruit and vegetable products.
Social distancing norms were tossed to the wind as large crowds crammed food stores for food items they could get.
Several supermarkets and food shops built stock as consumers rushed to buy things. At some food stalls, a paint of rice that sold for N1, 800 sold for between N2, 400 and N2, 800. Similarly, a paint of garri, that initially sold for between N300 and N350 went for N1, 400. Traders made huge profits while the lockdown lasted.
One of them is Onyeka Abia. He however added that he spent more on ferrying his foodstuff to his base in Shomolu, Lagos.
Abia attributed the price hike to increase in the cost of logistics.
According to him, the restrictions had increased their logistics cost, which was added to the cost of the commodities.
Entrepreneurs flocked into the market since demand rose. Food stalls run by small business men and women outside locked markets in Shomolu Local Government thrived.
Seeing the demand, many of them sold vegetables and other staples within the neighbourhood.They took advantage of restrictions that had impacted food supply to increase prices.
Third-party delivery services appeared a quick fix for restaurants looking to up their delivery game. The pandemic pushed producers to explore off-premises delivery programmes.
With social distancing rules in place, and the restriction on eating out to stop the spread of COVID-19, food firms were forced to reinvent their business models to maintain cash flow. One of them was OK Foods Limited, a key player in the confectionery and biscuits category.
In a market where customers are more demanding than ever, the firm found new ways to meet production targets.
While the work-from-home experiment lasted, the company brought its factory workers to work to sustain production.
Sales revenue coming for the food industry was massive such that it could transform the eceonomy of countries, such as Somalia. However, it proved a challenge for the domestic agricultural sector already facing many difficulties.
With the lockdown, farmers were forced to leave farms to the cities.
While in places, such as Oyo State, there was no shortage of food, the industry is concerned about having enough workers. Many foreign agricultural workers have returned home to Togo and Benin Republics.
Co-founder, Cato Food,Tinuke Lebile, based in Osun, said the pandemic presented them with problems, one of which is labour. Most small scale farmers in the area relied on their kinsmen, who come from the remote or the low-income areas before the harvesting season.
But they could not make it this time due to the lockdown.
The government’s lifting of restriction on vehicles transporting farm produce was supposed to be a relief for farmers. It turned out not to be so. The Nation learnt that even those farmers, who had harvested their crops were not able to sell them in the absence of transportation.
The fare went up costing them three times the actual amount.The Chief Executive, FarmCredit Nigeria, Afioluwa Mogaji, said farmers could not transport their produce because of shortage of trucks. The challenge was that many trucks were stuck at various check-points and interstate boundaries.
A few food processing firms obtained permits in some states to move in their products.
According to them, interstate and local truck movement was impacted with the challenge of shortage of manpower in factories. Many food firms faced supply cut after factories and units were shut in several places by the authorities.
Mogaji added that the availability of raw materials with free movement of trucks and lorries transporting agro produce to warehouses and cold storages was critical to food supply chain for the entire population.
Across the sector, packed food products business that depend on agri-products for sourcing raw materials operate on a thinner margin. Some of the operators said supplies had been irregular with raw materials costs being unpredictable, which varies across the states.
The Director, Graceco Industries Limited,Tunji Kalejaiye said since the lockdown was declared, unexpectedly almost all food firms faced distribution challenges.
As state-to-state procedures were different, inter-state transportation was restrictive.
He said food firms were grappling with operational challenges and were under pressure due to hindrance in movement.
For instance, despite the food sector being one of the essential services exempted from the lockdown, several food delivery firms had complained of harassment by police personnel.
The Ogun State Commissioner for Agriculture, Dr Samson Odedina, said the government took cognizance of that and several measures were implemented to ensure enough food supply.
He said the government made efforts to allow food processing firms to operate, though some, in turn, were dependent on their raw material from firms in Lagos State.
Consequently, the government decided to issue permits to food firms. This was to ensure smooth supply of food items for consumption in times of lockdown. The passes became handy for easy passage at the checkpoints to deliver provisional supplies.
Odedina said industry operators facing any problems in operations, management and distribution of food products could send their queries.
The Lagos State Government also reacted to food industry operators’ complaints.
While the lockdown and other social distancing measures posed major problems for food traders using regulated markets, the government instructed security agencies not to block or close food processing units. This helped to keep a lot of food firms in operation amid the lockdown.
The Commissioner for Agriculture, Prince Gbolohan Lawal, stated that uninterrupted manufacturing of food products was critical for maintaining supply chain and availability of food.
There were agreements to enable the functioning of food products factories, movement of their products and inputs/raw materials and allowing workers to attend factories.
While the pandemic brought money to the food industry, the disruption and uncertainty occasioned could produce a new food crisis, which could see further price hikes, losses and shortages as well as rising malnutrition and health issues in the months ahead.
One of the experts, who shared this thought is the Country Manager, HarvestPlus, Dr Paul Ilona. He said the country could face a food shortage if the authorities failed to properly manage the aftermath of the pandemic.
Following attempts to curb the spread of COVID-19 by restricting population movements, Ilona said the food supply chains were affected.
He said COVID-19 pushed the food industry to a tipping point, calling upon the government to prioritise food production to ensure that farmers could continue to feed Nigerians.
According to him, if the country do not rise to address the rising challenges immediately, Nigerians could see a decrease in food production as well as higher prices in the months ahead.
Ilona said the events that during the lockdown exposed the fragility of the food system.
The solution, he added, is to find ways to intensify the production of safe and nutritious food over the long term. This would ensure that Nigeria withstood shocks, such a disease outbreak.
According to him, the food processing industry is of enormous significance for Nigeria’s development, as it could be linked the industry and agriculture. The proper linkage of these pillars, he stressed, would help synergise the development process and promote the growth of the nation.
Ilona added that the fact that a large volume of Nigeria’s agricultural output is wasted is a signal for the country.
He maintained that though the pandemic may have disrupted the food system, in the longer run, it could also create opportunities for those ready to adapt to the changing realities.
Experts were of the opinion that the pandemic could galvanise the governments to take action and grow their agriculture and food processing industries.
The Country Manager, OCP Nigeria, Mr Caleb Usoh said Covid-19 has affected the food industry.
In the remaining months of the year, he wants the sector to focus on synchronous implementation of tasks and solutions to boost agricultural, production to ensure domestic food security and increase exports, achieve the highest goals assigned by the Government.
He urged for support to ensure that the market is supplied with the necessary food as usual during the COVID-19 crisis.
The President, Federation of Agricultural Commodity Association of Nigeria(FACAN), Dr Victor Iyama, said the food system had been under stress before the crisis.
According to him, the demand on food system is immense. He explained that becoming a continental agri-food giant involves building an ample food-processing sector.
He said his organisation was looking at how to bolster food security and ensure that growers were producing, at an affordable rate, food for Nigeria.
In view of the foregoing, stakeholders want the government and the private sector to monitor the quality of supply.
They urged for investments in the development of commodity lines along the value chain, processing and infrastructure.
The challenge, however, according to the experts, is that even after the pandemic subsides, the strain on the food system would continue as a result of a growing population with evolving needs.
Source : Thenationonlineng