Concerned by the high cost of Garri, a common staple food, the Managing Director, S&P farms and Ranch, Agboola Banji, said there is no justifiable reason for the 100 per cent price increase, considering the labour, input and processing costs.
Justifying his claim, he told The Guardian that it is not unusual that; “Those who specialised in garri production run into losses in the early part of the year, especially when trying to fry at 0.6mct. It takes a lot of efforts to get the desired produce, so there is always lot of waste when trying to get the desired mash in the early part of the year, coupled with the weather, which are recurrent factors.
“In cassava cultivation, when there is a boom in maize, it affects the production of cassava because many will do more of maize. Most of the farmers intercrop maize with cassava, and there was a high infestation of army worm on maize, so majority of farmers ran into losses,” he said.
Agboola said the cassava harvested at the early part of this year, is what was planted in early 2016, saying those planted in late 2016 when the farm hands were leaving are yet to be harvested and those for 2017 are still in motion.
“Let’s look at the costs in this business-this time last year, we were buying cassava at the rate of N16, 000 per ton, the highest we paid the farm hands from neighbouring countries ranged between N130, 000 to N160, 000 per head. This was based on contract, which was equivalent to the value of a motorcycle as negotiations were based on the level the farm hand could cover. Compare the exchange rate at the early part of last year and check the exchange rate towards the end of last year; you’ll see how much we purchased Okada, which was around N160, 000 to N195, 000 last year,
“Concerning labour, which happens to be the bulk of our expenses, those we hired in 2015 were the ones who produced the 2016 harvest. The farm hands come in around March and April. We started preparation then and planted around May-June for this annual crop. So, in 2016, we consumed the labour of 2015.
“In 2017 what we planted was the labour of 2016, however the contractual agreement they entered in 2016 after the dollar was increased at the end of 2016 was the reason majority did not return in 2017. The Cassava in the market was planted in early 2016 when the cost of labour was constant, which is the bulk of our expense. With labour cost, there is no justification for the high cost of cassava ranging from N40, 000 to N57, 000 per ton,” he said.
He noted that variable costs like the Stem/bundle- N350 to N600 based on the seller; chemicals, have an increase of N200; “lease of farm land is still 5000/ha; tractor is still N8, 000 to N12, 000/ha just that due to less farmhands, machine owners are going with highest bidders, feeding allowance was N4, 000 against N2, 000 of last year.”
He predicted that by next year, the price of cassava will crash due to panic planters because there will be a huge supply and no processor will break-even with cassava purchased from the farm gate at N55, 000.