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Nigeria’s agric: When foreigners dominate

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The recent pronouncement by the Federal Government that Nigeria’s agriculture is dominated by foreigners has sent jittery to the spines of local stakeholders. Taiwo Hassan reports

 

 

In the beginning
Several decades ago, sustenance farming contributed majorly to Nigeria’s agric sector – enhancing the nation’s food sufficiency.
But unfortunately, the sector remained dormant basically because of the inability of the past governments to prioritise agric – relying on oil, which is susceptible to the vagaries of forces of demand and supply – raising concerns for the fate of the economy.
Basically, the headwinds in the sector prompted slow development and stunted growth as many people who had been into agriculture neglected it in search of greener pasture and other white collar jobs in the country.

However, the reason for this change in paradigm was not farfetched due to the fact that farming faced low patronage and neglect, which consequently affected its contribution to the country’s Gross Domestic Product (GDP).
Ideally, one of the major reasons responsible for the neglect of this sector was the surge in the oil price at the international market as past governments raked more revenue from the sale of the product to the detriment of agriculture, which was once a cash cow for Nigeria.

Shift to agric

However, in order to re-jig the sector positively, succour came during the regime of former President, Goodluck Ebele Jonathan when he appointed Dr Akinwumi Adesina, as agric minister in order to bring back the lost glory, which had stifled the growth of the sector.
Under Adesina, who is currently the President of African Development Bank (AfDB), Nigeria’s agric sector witnessed transformation following different policies that were unleashed to galvanise desirable the sector.

As part of plans to attract investments into the sector, the Federal Government and the state governments intensified Foreign Direct Investment (FDI) campaign to revamp the sector. The belief was that if foreign investors key into the Nigeria’s agriculture, it would spur rapid development and put Nigeria on the global economy as a food producing nation.

Foreign dominance

However, still basking in the euphoria of exiting recession, Nigeria’s agric sector was hit with the news of foreigner dominance.
The Federal Government said that it had discovered that more foreigners were doing businesses in the agricultural sector. It said this could be traceable likely to the high interest rates banks demand from local agriculture entrepreneurs.
Minister of State for Agriculture and Rural Development, Heineken Lokpobiri, was quoted as saying that low access to finance was a major challenge impeding the development of the agricultural sector in the country.

“The major challenge bedeviling this industry is access to finance. Agricultural financing in Nigeria is too costly; for even at nine per cent you can’t find it. They will ask you for all forms of collateral, the CBN will say bring your father’s house, bring this, bring that,” he said.
“And that is why if you look at it now, foreigners are taking over the agro sector here; either from India, they get it (loan) at three or four per cent, or from Europe at two or three per cent. But here, it is 30 per cent and they (banks) are not even willing to give. The only way you can compete with others is for you to have cheap funds that will reduce your production costs.”
Lokpobiri said that Nigeria had over the years had allowed the banking sector hold the country hostage with high interest rates.
Particularly, he was quoted to have stated that it was for this reason the government often borrowed less from the domestic market.

Compromise theory

Corroborating Lokpobiri’s stance, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, said that the present administration was against FDI, since this is the way other countries in the world attract investment into their mainstream economy but Nigeria’s agric industry is already compromised in its entirety.
According to him, with the current scenario in the country’s agriculture, it would be difficult for any local investor succeed since the FDI has been tailored to favour foreigners.
His words: “The way it is, we welcome foreign direct investment. Every developing country does that. It is a welcome development for a country that wants to grow and grow speedily. But it has other complexities, which are not always visible and noticeable to observers.
“Of course, when they want to come in, they ask for tax holidays, which countries are willing to give. But how about dangers they face in local economy in the long run? Take the problem we face now, that is nearly impossible for any Nigerian investor to have access to substantial credit to make any major investment, say in the agro-industrial sector where we operate now,” Ogbeh added.

High interest rates regime

Factually, Ogbeh’s grouse may be attributed to the high interest rate in securing agric loans at the banks, which is scaring many farmers from approaching the banks for loans.
Besides, findings also show that many of the banks are reluctant to give loans to farmers in the country. Basically, Nigerian banks are not willing to support long-term agric loans since they want to quickly recoup their facilities.

Ogbeh said: “At interest rates of between 25 and 32 per cent, what – on God’s green earth – can you do? You can’t do much. But these foreigners can borrow at two per cent, bringing a hundred or two hundred million dollars to invest. Of course, they will create some jobs but essentially low level jobs – for outgrowers and others. In a sense, they are jobs. But the way we are heading, what it means is that if these interest rates persist for much longer, the only people who will dominate agro-industry, and indeed major industrialisation, in this country are foreigners.

He continued: “Is that necessarily a good thing? It’s good in some ways. But if they take absolute control, then we are in danger. This is the complexity. And I keep complaining, for instance, about the interest rates, although many people don’t seem to agree with me. Where in the world have interest rates remained at over 25 per cent for 30 years and that country still claims the economy is growing? How does it grow? Or how does it develop its industries? Where in the world is the MSME industry flourishing when it is impossible to access credit? So, young people are reluctant. Retiring civil servants who want to create something can’t do anything. Those within the productive bracket who want to create and do things can’t do anything. We are facing a problem, and something has to be done very quickly about the entire interest rate regime.”

Govt’s political will

Speaking on agric sector’s support, the minister said: “The costs of production, processing, and export make us uncompetitive outside, in the international markets. If you’re going to set up a food processing outfit, all your machinery must be of food-grade stainless steel. And food-grade stainless steel is always very expensive.

“You don’t make them here in Nigeria; you import them. You pay the duties. You install them. Then you go for your standby generators and you pay local taxes of all kinds, such as local government tax, corporate tax, and so on. By the time you add these to your production cost; you can’t compete with the man in China or Brazil.

“If you go into the world market, you would hear them saying no! We are getting it cheaper from other people. On the other hand, you know what happened in India. If you build a brand new factory, and they commission it for you, the Indian government writes you a cheque of 35 per cent to help you stabilise your business, knowing that they will recover their money eventually from tax. That is the kind of support they give. We need to have such a scheme here.”

Dangers of FDI

On what the country is likely to face with the continued opening of its economy to FDI influx, the minister said: “Leaving everything to only foreign direct investments is also not safe because they come with certain strings, which are not always very easy. They will have to repatriate their profits. The other issue is, if agriculture doesn’t grow as fast as it should and agro-industrial exports and raw materials don’t happen as quickly as they should, when the oil and gas era is gone, what will be our source of foreign exchange? Again, that is something we need to deal with. And it’s all very complicated.”

Last line

With the Federal Government’s stance on foreign domination of the country’s agric sector, there are fears that the nation’s quest to attract foreign direct investments into the sector are being threatened and compromised.

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Agric

Sokoto introduces tractor hire scheme

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Sokoto state government said it will start a tractor hire scheme to boost mechanization in farms and assist farmers to enhance their production capacity.

Governor Aminu Waziri Tambuwal stated this in Kware LGA when he inspected agricultural processing machines to be distributed to farmers under the state’s FADAMA III additional funding scheme.

“We are starting with 30 tractors, with each of the three senatorial districts to have 10 tractors each. This initiative will be implemented with the collaboration of the FADAMA III coordinating office, the state ministry of agriculture and the state investment company which will provide the tractors,” the Governor stated.

 

He said a strict vetting process will be implemented for those to benefit from the gesture.

“We want to ensure that both the small and large scale farmers have access to the tractors and other machineries.

“We hope to expand the scheme to ensure we have enough tractors to help our farmers have access to modern farm tools at affordable prices,” he added.

Tambuwal said 127 farmer Processing Groups, made up of 1,385 small-holder farmers, have benefitted from the agricultural processing machines and equipment distributed to farmers across the state by the FADAMA III office in Sokoto.

According to him, in addition to the creation of two agricultural produce aggregation centres in the state, eleven tomato production net houses have been established at various locations in the state.

“This gesture is part of our collective efforts towards modernizing our farming techniques so as to improve yield and income of our farmers,” he stated.

The Governor further revealed that 243 unemployed youths have been trained to embrace agriculture, saying this was done with a view to exploring the agribusiness sector and instilling in the youths and women the technical and practical skills that could enhance their competitiveness in agri-prenueship.

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Agric

GMO: Who blinks first – NBMA or HOMEF?

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Efforts to establish Genetically Modified Organisms (GMOs) in Nigeria are currently enmeshed in controversy as two key agencies- National Biosafety Management Agency (NBMA) and Health of Mother Earth Foundation (HOMEF) accuse each other of sabotaging the nation’s food security. Taiwo Hassan reports

 

Nigeria’s agriculture
Indeed, Nigeria is one of the luckiest countries in the world that is blessed with large span of arable lands for planting of crops to ensure food productivity and security.
But in spite of the oil, which currently account for 90 per cent of Nigeria’s revenue and foreign Exchange earnings, agriculture remains the base of the nation’s economy, providing the main source of livelihood for most Nigerians. The sector, no doubt, faces many challenges such as outdated land tenure system that constrains access to land (1.8 ha/farming household), a very low level of irrigation development (less than 1 percent of cropped land under irrigation), limited adoption of research findings and technologies, high cost of farm inputs and poor access to credit. Also included are inefficient fertilizer procurement and distribution, inadequate storage facilities and poor access to markets, which have all combined to keep agricultural productivity low (average of 1.2 metric tons of cereals/ha) with high post-harvest losses and wastes..

Despite these challenges, agriculture still remains the largest sector of the Nigerian economy -employing two-thirds of the entire labour force.
Over the past three decades, value-added per capita in agriculture has risen by less than one percent annually. It is estimated that Nigeria has lost $15 billion in annual export opportunity from groundnut, palm oil, cocoa and cotton alone due to continuous decline in the production of those commodities. Food (crop) production increases have not kept pace with population growth, resulting in rising food imports and declining levels of national food self-sufficiency.

The main factors undermining production include reliance on rainfed agriculture, smallholder land holding, and low productivity due to poor planting material, low fertilizer application, and a weak agricultural extension system amongst others
Introduction of GMOs

Meanwhile, the introduction of GMOs into the country’s agriculture may not have gone down well with many Nigerians over lack of empirical evidence to ascertain and certify
them safe for human consumption, even though the country is facing challenges in meeting food production for its teeming huge population.

Indeed, the Food and Agriculture Organisation of the United Nations (FAO) estimates that food production will need to double in some parts of the world by 2050 and this translates to the need for more land for cultivation, which will not be readily available. Hence, the introduction of GMO crops to make enough nutritious food available with limited land, water and other resources was one of the reasons GMO was approved to compliment food security in the world.
The Nigerian authorities had given legislative approval (‘junk science’) to the NBMA.

Those in support of GMOs said population growth will necessitate the need for more food production.
But this may not be suitable yet for Nigerians who are yet get acquainted to GMO products locally except the foreign nationalities living in Nigeria.
Besides, findings have shown that GMO crops are reportedly resistant to droughts, pests and crop diseases, while some are purported to be packed with extra vitamins, minerals and other health benefits.

GMOs’ feud
However, in order to buttress its stance on aggressively developing of GMOs in Nigeria, the NBMA accused an advocacy group- HOMEF for opposing GMOs empirical test and alleged that it was trying to sabotaging Federal Government’s efforts at moving Nigeria towards food security through the application of technology in food production.

The NBMA in a statement, said it was not established to halt the use of GMOs, but to ensure the safety of GMOs on human health, plants, animals and the environment.
The agency said: “The agency has no intention and will never verbally engage HOMEF, but these statements made against the agency are not only incisive but negate the efforts of the Federal Government to ensure safety in the application of the technologies that assure Nigerians of food security and food safety.”

NBMA accused HOMEF of being unpatriotic, noting that it had never breached the law in the discharge of its duties.
“The attention of the National Biosafety Management Agency (NBMA) has been drawn to a series of incisive and unpatriotic statements peddled by the Health for Mother Earth Foundation (HOMEF) about the agency and its activities,” said the agency in a statement..
“While the agency does not want to banter with HOMEF or any of its kind, it is important to state here that NBMA is a government agency established by law as a regulatory agency to ensure the safe handling and use of modern biotechnology and its products, which includes Genetically Modified Organisms (GMOs).”

It will be recalled that HOMEF and its partners had last September criticised the approval by the NBMA for the confined field tests of genetically modified cassava in Ibadan, Oyo State – a move they said was designed to flood the country with genetically modified foods.

But the agency in the statement defended its approval of the field tests of some genetically modified crops, stating that the approval followed due process.
Director of HOMEF, Nnimmo Bassey, accused the NBMA of abandoning its regulatory mandate.

“The NBMA are not the federal government, they are just an agency of the government and they are the ones that are inciting Nigerians because when they say that GMOs are safe and their job ought to stop GMOs but they are bringing GMOs. It’s completely what a regulatory agency should not be doing,” Bassey said.

Last line
Despite the controversy trailing GMO crops in the country, the multimillion dollar questions anti-GMO campaigners are asking is the safety of the environment and food

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Agric

FG okays 2nd consignment of yam export to UK, U.S.

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Nigerian yam exporters are set to export second consignment of yams to the United Kingdom and United States of America in the first quarter of this year. Prof. Simon Irtwang, Chairman, Technical Committee on Yam Export inaugurated by the Federal Government, disclosed this in Abuja.

The move, according to the committee, would eclipsed the 72 tonnes of yam that left the shore of Nigeria through the Apapa port to the U.S. and UK in June last year, which was widely reported as being rejected because it did not meet international specifications.

The chairman said that the committee had embarked on a tour of major markets, particularly those in the South-West, to ascertain the quality of the yams at hand.
According to him, the Federal Government is doing everything possible to ensure that yam rejection is not associated with the second phase during the export of the commodity.

“Not all species of yam are good for export. So, yam farmers and traders need to know the species that are good for export. They also need to know how to select, store and preserve them to increase their freshness and ability to stay long without decaying. We also have to let yam farmers know the seed yams they will plant that will be good for export,” Irtwang told newsmen in Abuja, last Tuesday.

He revealed that there would be no publicity for the second export as the flag-off had already been done last July by the Federal Government. He said that yam exports would be done without much publicity until the National Assembly repealed the Export Prohibition Act.

Irtwang said there was constant communication between the committee and companies involved in the production of cartons for yams packaging as well as those receiving them abroad.
He noted that with the lessons from the first export, the second export would not witness any challenges.
However, some stakeholders believe that the Federal Government’s move to commence second phase of yam export in the country will trigger outrageous price of yam and scarcity in the marketplace.

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