Logistics pushing up prices of commodities

MD Reds & Greens

One of the most important and seemingly difficult elements of the agriculture value chain is logistics. Logistics element contributes a large amount to the cost of production, which affects the final price of agricultural products to consumers in Nigeria.

Processing companies have the responsibility of making direct contact with the farmers to discuss terms of agreement, what quantity they require and when they need them. For example, in rice production, as a result of the distance and the muddy state of the roads from the farms to the tarred roads, it becomes difficult to access the farms to get the rice paddies. As a result, tractors, cars and buses cannot get to the farm locations. Extra cost and labor are then employed to move the bags of rice from the farms to pickup points. The transporters then charge their own fee to move the paddies, and as much as N4 000 per bag to move one bag or N2 500 if there are many bags.

Speaking with the owners of Reds and Greens, poultry, meats and vegetables firm in Lagos, MSMEsToday. Com can reveal that one of the issues many businesses are facing, whether small or big is the lack of collaboration. ‘A lot of companies are still involved in the logistics aspects of their business. They prefer to buy their own trucks and employ drivers ostensibly to ease the financial burden when it should have been outsourced to those equipped and trained to handle logistics matters’.

However, lack of maintenance of logistics vehicles or in most cases, absence of road infrastructure presents huge discouragement to private investors, even though there are huge opportunities for private sector companies to get involved in the logistics value chain in the agricultural sector they concluded.

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like