Norma's Letter from Jos: Cost of Operations Rise with Petrol Price Increase

Vegetable orders

From: Norma, Zamani Farms

Date: January 5, 2012

Hello customers,

If we resolve one problem, we are confronted by another. It seems we never get any breathing space in our struggle to keep our farm going. We were encouraged by the progress of our crops on the farm, and the fact that things seem to be settling down in Jos despite the state of emergency in the local government where our farm is located. We had hoped the new year would get off to a good start, but we were thrown into confusion by the government’s 115% increase in the price of petrol. Aside from labour, petrol is our major expense in running the farm, and also, of course, in delivering your orders. We run as many as 5 petrol powered pumps daily for our irrigation system, as well as using petrol in our vehicles for visiting local markets to obtain items like potatoes, plum tomatoes, onions, etc. In addition, our workers who come from distant villages mainly come on motorcycles and they also need fuel. So this petrol increase has really thrown a spanner into our financial calculations and daily operations.

As you might know, our farm van has been out of service for some time, and we have been depending on hired vehicles to deliver orders to Abuja, so we are not in a position to control the cost of delivery. We have been trying to raise funds for a new vehicle, but we are not yet in a position to buy one. As you probably also know, commercial transport costs have doubled (at least) since the petrol price increase and we will now have to pay a minimum of N50,000 each time we come to Abuja. As a result of this situation, we have been forced to add a delivery charge of N800 to each order to cover additional costs. Otherwise we would not be in a position to deliver your orders this week. We really apologise that we had to do this without notifying you beforehand, but unfortunately the circumstances made this emergency measure necessary. We hope you will understand.

At this point, we do not know how the situation as far as petrol increase will resolve. A general strike has been called for next week Monday, and we don’t know how this might affect deliveries for next week. We will operate under the assumption that we will be able to deliver orders as usual next week, so we hope you will order if you need anything. Even before the petrol increase we had been considering a general price increase, which we have not done for a couple of years, but the present situation has made this an urgent matter or else we would not be able to survive. So you will see on the order form that we have effected some increases in prices. We hope this will not be too onerous for our customers.

We will also continue to add a delivery charge to your orders, at least for the time being, until we see the final price we will have to pay for petrol. Please note that the N2000 minimum required order is exclusive of the delivery charge. We will monitor the situation, and if the price of petrol comes down to a reasonable level we will adjust the delivery charge accordingly.

Meanwhile, we have really lovely things for you, as our crops are looking beautiful on the farm...