FG to Introduce Minimum Price Guarantee for Farmers to Tackle Food Inflation

The Federal Government has announced plans to introduce a Guaranteed Minimum Price (GMP) for agricultural products across Nigeria as part of a broader effort to stabilize food prices, protect farmers, and curb inflation.

The initiative, led by Abubakar Kyari, Minister of Agriculture and Food Security, was unveiled during a session on “Catalysing Agricultural Transformation: Capital, Innovation and Growth” at the Nigeria Economic Summit in Abuja.

Kyari explained that the measure is designed to balance the welfare of farmers and consumers while reducing the negative impact of market volatility and hoarding by middlemen.

“We are looking at how to balance citizens’ welfare and farmers’ welfare,” he said.

The government’s decision follows last year’s surge in food prices caused by market manipulation and hoarding. According to Kyari, some grain dealers deliberately withheld produce from the market, waiting for higher prices.

He shared an example of a farmer who refused to sell maize until prices reached ₦150,000 per tonne but is now struggling to sell at ₦30,000.

Similarly, the paddy rice market saw massive price disparities, as farmers sold at ₦350,000 per tonne while market prices skyrocketed to ₦800,000 — a clear indication of inefficiency and unfair pricing structures in the agricultural value chain.

To address these issues, the Federal Government will implement a Guaranteed Minimum Price (GMP) scheme that ensures farmers receive a fair base price for their produce regardless of market fluctuations.

The Ministry is also introducing a 150-day window to release stored food commodities into the market during shortages — a move expected to reduce artificial scarcity and stabilize retail prices.

Experts believe the GMP policy could encourage more investment in farming while also ensuring that consumers are protected from extreme price swings caused by speculation or hoarding.

As part of its agricultural reform agenda, the government has begun recapitalizing the Bank of Agriculture (BOA) to improve access to affordable credit for smallholder farmers.

Kyari revealed that President Bola Ahmed Tinubu has already approved ₦250 million for the recapitalization effort, marking the first step in a long-term plan to strengthen agricultural financing and empower small-scale producers to expand operations.

“Our goal is to support smallholder farmers to become largeholder farmers,” Kyari stated.

He added that the Ministry is developing a national database of smallholder farmers to streamline access to funding, inputs, and training opportunities.

To boost productivity, the Ministry is collaborating with private partners on nationwide soil mapping to improve fertilizer blending and enhance crop yields.

However, the rising cost of fertilizer remains a challenge. Prices have surged from about ₦35,000 to nearly ₦60,000 per bag, largely due to import bottlenecks, port congestion, and global supply chain constraints.

Kyari said the government is exploring local potash production to reduce import dependence and stabilize fertilizer costs. He also mentioned ongoing discussions with the Renewable Infrastructure Fund to address logistics challenges, including transportation of farm produce from rural to urban markets.

Despite progress in policy and reform, insecurity remains one of the biggest obstacles facing Nigerian farmers.

At the same economic summit, Segun Adaju, an agripreneur, lamented that widespread banditry and kidnapping have forced many farmers to abandon their farmlands. “Bandits are our biggest problem; we’re tired of paying ransom,” he said.

Similarly, Okeke Chukwujekwu, co-founder of Ocattu Nigeria, pointed out that poor road infrastructure discourages young people from investing in agriculture, as many farmlands remain inaccessible.

Aisha Bashir, CEO of Cam Dairy Foods Ltd, also highlighted that limited access to finance from commercial banks has worsened the challenges facing agri-businesses, reducing their capacity to scale or survive during inflationary pressures.

While the agricultural sector faces multiple barriers, Olapeju Ibekwe, CEO of Sterling One Foundation, emphasized that Nigeria still possesses massive untapped potential.

“Nigeria has between 35 and 37 million hectares of arable land, while the Netherlands has just two million hectares but maintains one of the most advanced agricultural systems in the world,” she said.

Ibekwe urged the government to regulate intermediaries in the commodity market to prevent hoarding and improve transparency. She noted that without proper oversight, the government would remain reactive — responding to crises instead of preventing them.

“That area of the ecosystem is completely unregulated. Unless it is addressed, we will keep seeing warehouses being raided in times of food scarcity,” she warned.

Preliminary data from the 2025 National Agricultural Development (NAD) assessment suggests that Nigeria recorded a higher crop yield this year compared to 2024. This improvement, according to the Minister, signals that ongoing reforms are beginning to deliver results despite persistent challenges.

Kyari reaffirmed the Federal Government’s commitment to building a resilient and self-sufficient food system, adding that current interventions would help reduce dependence on imports, attract investment into the agricultural sector, and stabilize the Naira.