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Bread Makers Agonise Over Hike In Price Of Ingredients



Recently, bread makers in the country cried out to the government to do everything within their means to ensure that the industry does not collapse due to numerous challenges they are facing. In this piece, ANTHONY AWUNOR , CHIKA IZUORA, JIDE FABAMISE, Lagos examine the plight of bread makers as a result of incessant increases in the prices of baking ingredients.

Bread has been a prominent food in large parts of the world and is one of the oldest man-made foods, having been of significant importance since the dawn of agriculture. The importance of bread cannot be over-emphasised in any society.

In Nigeria, bread is a staple food in many homes and it is consumed by people from all genders, ages, tribes, both the rich and the poor. With the high number of demand of bread, the product has become one of the most important food item in most homes. For this, there is virtually no household in Nigeria where bread is not consumed, especially as breakfast.

Economically, reports have shown that, the size of the Nigerian bread industry is estimated at N122.1 billion with a Compound Annual Growth Rate (CAGR) of three per cent within the next year. Beyond the huge market that bread creates, the bread industry creates jobs, direct and indirect jobs both at the level of manufacturing and at the distribution value chain.

The Dwindling Fortunes Of Bread Makers

Despite the importance of this staple food, bread makers in the country have complained that they are finding it extremely difficult to break even. To them, the way the industry is going, there may be adverse effects on the economy if the industry is finally allowed to collapse.

Speaking on their plight recently at a forum organised by Premium Breadmakers Association of Nigeria (PBAN) in Lagos, president of the association, Mr. Tosan Jemide expressed dismay the tough situation bread makers are passing through in the country.

Jemide claimed that, given the current situation, most premium bakeries may be forced to embark on a price increase which will further make bread unaffordable to the common man.

He however, assured that as an association, they are totally committed to ensuring that Nigerians have healthy, quality and affordable  bread on their table, adding that “It is in light of this that we appeal to the federal government to look into the issues that currently threaten the existence of the premium bakery industry in Nigeria”.

As an Industry, Jemide said the bread industry contributes significantly to job creation, food security and economic growth in Nigeria; thus should be supported to remain sustainable by accessing low interest loans from financial institutions to enable them grow their businesses with the job creation capabilities inherent therein.

According to him, the premium breadmaking industry currently employs well over seven hundred thousand Nigerians directly and indirectly, making it a significant employer of labour, by implication, there will be adverse effects on the economy if allowed to go into extinction.

He said “the role of premium bread in food security of Nigeria cannot be over emphasised, it therefore behoves on the government to do everything within their means to ensure that the industry does not go extinct. The challenges we face as a result of incessant increases in the prices of baking ingredients has rendered most premium bakeries comatose from operating at a loss; capital injection through loans and equity investments have been pumped into a lot of these businesses and repayments are no longer possible”.

“This has a ripple effect on the economy as a whole as it serves as a disincentive for investment. Between 2015 and now the price of flour which is our major ingredient has increased from N6,500 Naira per 50 kilogram, KG, a bag to N11,500 Naira per bag as at today, with the possibility of further price increases”, Jemide added.

High Cost Of Baking Ingredients

The most important bread ingredient is flour. Flour is grain ground to a powdery consistency which provides the primary structure, starch and protein to the final baked bread. The protein content of the flour is the best indicator of the quality of the bread and that makes flour a vital ingredient.

According to the PBAN President, in the last 3 years, the prices of flour, sugar and other baking ingredients have quintupled without a corresponding increase in prices of premium bread by PBAN members. As an association, Jemide pointed out that it is either the bread makers do something about the astronomic increases in prices of baking ingredients or go out of business.

To worsen the matter, he added that most of them get loans with double digit interest rates from financial institutions to fund their bakery projects and are finding it extremely difficult to meet their loan repayment obligations.

Despite the bakers’ claims of astronomical increase in flour, LEADERSHIP investigation shows that the price of flour has not increased on a short term period.

Confirming that no change in the price of flour has occurred, a staff of a notable flour producing firm said “We have been receiving calls from different parts of the country based on radio, television and newspapers’ reports that bread makers will increase price of bread and also planning to embark on a nationwide strike.

We acknowledge the concerns of stakeholders about the high cost of production inputs that is reducing profit margin and crippling businesses of bakers nationwide.

The worker who spoke on condition of anonymity added “In spite of these challenges, we are assuring the public that price of flour from us will not increase and we will continue to ensure highest standard in our production process,” they said.

Review Of 15 Percent Levy On Wheat Grain By Federal Government

To improve wheat production in the country, the federal government, on July 20, 2012, introduced a 15 per cent levy on wheat grain imports resulting in an increase of the effective duty from 5 per cent to 20 per cent . The levy is meant for the development of wheat cultivation in Nigeria.

Speaking on the review, Jemide stated that even after 6 years of the introduction of the levy bakers are yet to feel the impact.

“We have not seen the effect on wheat cultivation in Nigeria. We call on the Federal Government to review downwards the 15 per cent levy on wheat grain imports to help drive down the price of flour which constitute about 75 per cent of baking ingredient. We believe that a reduction in the 15 per cent levy on wheat grain by the Federal Government, will lead to a substantial reduction in the price of flour by millers”.

Other areas, the bread makes are finding their business difficult are in poor power supply and the high cost of alternative energy and the policy that premium bread should pay value added tax, VAT on bread

“Almost all our baking machines are powered by diesel generators. The cost of diesel has hit the roof top and is almost out of our reach. The consequences of high cost of diesel has led to the closure of some premium bakeries”, the President stated.

Cassava Bread To The Rescue

Meanwhile, the federal government is pursuing a new policy that will help bakers reduce much dependence on wheat flour for bread making.

The introduction of High Quality Cassava Flour inclusion in wheat flour will not only boost Cassava cultivation which has other economic values but is anticipated to save the country a whopping N127 billion scarce foreign exchange.

This is the initiative of the Federal Institute of Industrial Research Oshodi (FIIRO), a parastatal under the Ministry of Science and Technology.

The agency has pioneered research and development effort in cassava production in Nigeria which led to the development of over 25 commercial cassava products. One of such products is the development and utilization of high quality cassava flour for cassava wheat composite flour production for bread making which received presidential attention in 2004.

According to director general of FIIRO, Dr. Gloria Elemo, the institute had in the last 20 years been involved in the training of over 2,000 master bakers in cassava bread production.

She told the LEADERSHIP, exclusively that while FIIRO has carried out consumers’ acceptability studies on cassava bread produced at various levels of inclusion of high quality cassava flour, the response had been very encouraging.

She said, “Here at FIIRO, we have been working on cassava bread for decades and there has been improvements. It tastes just like the normal bread everybody is used to and that was the whole idea- not to introduce an entirely new product but to manage what we have to taste and look exactly like what is existing. “It has been managed through what is known as ‘recipe manipulation’ and ‘recipe readjustment’ along with the existing recipe”.

Elemo said in terms of foreign exchange saving, a whopping sum of N127 billion will be saved at 20 per cent substitution of high quality cassava flour in wheat flour. Noting that this figure will, however, be N63.5 billion at 10 per cent substitution, the DG said, “Again, no matter how you look at it, whether in the short term or in the long term, bread is going to be cheaper and affordable through inclusion of cassava flour. “Prices of bread could be reduced by 20-45 per cent at 20 per cent inclusion in the long term if the policy is adopted.

But also, one may not rule out some resistance from some quarters due to reluctance to change but change is one thing that is inevitable. “Some have actually said that cassava bread would cause diabetes or aggravate diabetic condition but as scientists, we have been able to debunk this through Glycemic Index (GI) studies, using human samples.

“The subjects consumed the cassava bread and we monitored the effect on the blood glucose. Interestingly, at 20 per cent inclusion, even at 10 per cent inclusion, there has been a slight drop in the GI for both breads than it is with bread baked with 100 per cent wheat flour. “So, there is no threat and it is not the cause of diabetes. Rather, I will even say it is better to use it for management of diabetes.

Cassava bread is safe just like wheat bread for human consumption”. Explaining why there is no fear of rejection, she added: “The bread tastes exactly like any of other normal bread. In fact, studies show that people have not been able to detect which one is the cassava bread from the normal bread. “We have the recipe and it is standardised, and because of that the FIIRO recipe has been adopted as the nationwide recipe and we  have been doing a lot of training nationwide with Ministry of Agriculture to train master bakers in the baking of cassava bread at 20 per cent inclusion.”

Elemo stated that with what FIIRO is doing, it will get to a time when Nigeria is definitely going to have more than enough cassava to export. She said, “Presently, there are demands in the export market for cassava but because it is a food security crop, we are using it extensively for foods like garri, fufu. So, it is not easy to meet export demand. “But by the time the value chain is pulled, there will be need for us to increase production.  A country like China is in high demand for our cassava”. She said FIIRO has developed over 250 technologies in its 61 years and these technologies can be deployed in the 774 local government areas for massive job creation and economic stimulation through processing and raw materials of relative advantage in each LGAs for the micro, small and medium enterprise.

At the moment, implementation of the policy will require government backing through a legislation to ensure flour millers include cassava in the processing stage.

Elemo said that the cassava bread initiative had experienced delays in implementation due to low acceptance by consumers, a development the government could have checked with the policy implementation.

“For now, the cassava bread initiative has experienced a slow growth due to low acceptance by consumers and partly because it is a new development that needs reinforcement and an enabling environment.

“At a point in this journey, there arose some insinuations that cassava bread may cause diabetes because of the cassava addition.

“But we went ahead with further research and discovered that cassava has even lower glycemic index, which proved the opinion wrong,’’ she said.

“While we are talking about unemployment and the need for value addition to our agricultural products, we should be looking at resolving them because Nigeria is the highest producer of cassava in the world.

“Cassava products in FIIRO alone are more than 100 products and bread is just of them, others are industrial products like ethanol and other chemicals, all of which we have trained more than 250,000 youths on.

“The difference between cassavas wasting away on our farms, value addition to the product in flour is our action.

“We appeal to the government to support our drive for economic diversification through cassava products.’’

LEADERSHIP also reports that a Cassava Bread Fund was created by the Federal Government as part of the transformation policy in the agribusiness sector.

It is learnt that the Fund will go a long way to ensure that Nigeria becomes the largest cassava processor having occupied the position of largest producer of the commodity in the world, and guarantee the reduction of food import bills; a number of measures including the cassava bread policy were endorsed by the Government.

Government’s intervention in the Cassava Value Chain by funding Cassava Processors and Bakers would translate to foreign exchange savings and job creation along the cassava value chain and also prevent post-harvest losses.

Aside the Fund, chief Audu Ogbeh, minister of agriculture and rural development, recently disclosed that plan is underway to sponsor an executive Bill to encourage 15 percent cassava flour inclusion in bread industry to encourage key players along the cassava value chain.

Ogbeh said also that the plan would curtail slightly above $5 million daily spending on wheat importation, a key raw material for the bread industry, while encouraging key players in the cassava value chain to provide the raw material for value addition.

He said further that the capacity of farmers in accessing finance would be enhanced by strengthening and repositioning the Bank of Agriculture to give credit at 5-6 per cent interest rate so that the farmers could engage in profitable business.