unearthing Agro-Allied potentials and Government intervention
A sizeable portion of the former President Goodluck Jonathan’s achievements in Agriculture cannot be over emphasised. Both his friends and antagonists are united on this one point at least, hence his Government’s ground work and enviable strides in Agricultural reform is veritable platform for President Buhari to continue from.
As things stand now it is a moot point even restating the notion that Nigeria needs to diversify its earnings potentials from present reliance on crude oil to the non oil sector. It is plainly obvious to all and sundry, what with price of our bonny light crude presently hovering between $45-$50 in the international market with dire warnings of reducing even more, in ensuing months.
The reasons for the drastic fall in crude oil price was not sudden but gradual, it came about as a result of several connected factors. United States one of our biggest customer’s focus on domestic production of their crude oil consumption meant the loss of their custom, they have doubled domestic production this year alone illustrating their determination not to import crude in the nearest future, in addition to this is Saudi Arabia and Algeria competing with us for a share of the remaining Asian market which has upset the precarious economics of supply and demand.Canadian and Iranian oil also struggling for a market share amidst recent discovery of oil in some nations fostered unintended consequence of an equilibrium imbalance, which has since then consistently pushed down the price of crude worldwide, this is including the global recession which has blighted the western world.
These developments have colluded to have a negative impact on our collective fortunes, with the constriction in economy leaving us in financial doldrums,weak naira, over reliance on exports coupled with the rampant unemployment, and this is just a tip of the iceberg.In view of these cornucopia of worrying occurence,it was a welcome development the favourable body language displayed by the new Government towards the diversification of economy, especially the president’s solemn promise to make expansion and growth of the Agro-Allied sector topmost priority. Even though previous government cannot be denied their strides in the Agric renaissance, with this present government’s promise backed by the party manifesto to make an investment in the agro-allied sector a top priority, it is imperative not only for us as Nigerians to run on that initiative, but also to identify the critical areas suffering a dearth of potentials and create awareness with fervent hope that government will hearken and pay keen attention to these areas highlighted.
While the conventional and even modern methods of farming, including an all encompassing appraisal of farming methods even covering livestock will not be looked at in this piece, the three cardinal areas of critical importance which this piece will restrict itself to are the following
Financial impediments faced by the agric industry (farmers both active and entrepreneurs)
The constraints faced by farmers in effective storage, marketing and distributing of farm produce
The limitless potentials still laying untapped in the agric derivatives sector
Presently as it stands it is extremely difficult for both an established farmer, and (or) even a newbie venturing into the sector to access loans from the banks and other financial institutions. Most banks would not even lend to farmers without collateral which majority of farmers who are subsistence simply do not have, the farmers who can come up with the collateral are financially buffeted with the high rate of interests they are charged, prompting the former president to decry the lack of Nigerian bank’s support, during a speech he gave at the 7th annual banking and finance conference in 2014.
To put this in context compare the lending interest rates of between 11-20% amidst other stiff requirements by Nigerian banks to lend to farmers with 1.5% charged European farmers, this is in addition to a guarantee of up to 80% of the loan by the European investment bank as underwriters, in addition to other financial palliatives given to the European farming industry. The European Agric rebate worth a yearly 3.8billion Euro enjoyed by European Nations, has also served to cushion the effects of any shortfall in prices, harvest etc.
Many European countries and especially the United states have enacted protectionist policies which has prevented much better quality organic African and generally third world produce from coming into their country and competing with their farm produce, the conservative Government in the Uk are presently in the process of banning some African food imports out right,ostensibly to also protect their domestic market. Note that in Nigeria the opposite is the case, with cheap substandard mass produced imports undercutting indigenous farmers whose organic farm produce cannot compete.
To deal with this anomaly Government must work with the banking sector to considerably lower interest rates to farmers, in addition they must partner with financial institutions to introduce soft loans without collateral for subsistence farmers. The considerably lower financial constraints will translate into a much lower cost of produce, but more importantly a removal of the financial constraints associated will encourage the legion of unemployed to embrace farming as a vocation and livelihood thereby fostering a small and medium industry that will go a long way in stimulating the jaundiced economy,can you imagine Gdp per capita that would be added with the Agro Allied sector employing only 1million yearly?
The existing Cbn intervention schemes like commercial Agricultural Credit Scheme (CACS) Nigeria incentive based risk sharing system for Agricultural lending (NIRSAL) should also be restructured where necessary, more funds injected for maximum impact.
Another constraint seriously hampering the delivery of total food security are the difficulties faced by farmers in transporting their produce to the towns, lack of modern storage facilities. The combination of poor storage facilities for their harvest and abjectly bad road networks affecting a quick transportation resulting in unnecessary wastage of produce. The lack of electricity also plays into this wastage as well, bad roads and an archaic railway system still stuck in primordial times,a form of transport which should normally alleviate the prompt and effective transportation has also failed them resulting in not only less tonnage harvest, but an haphazard ineffectual distribution network, this added cost contributes to overhead which invariably results in much dearer food stuffs and livestock by the time it ends up in the market.
The Government must be implored in conjunction with the multiple layers of Governance to repair the roads, in addition to an efficient railway network, even cheap and fast alternatives that can be developed after all the saying “necessity is the mother of invention” has held true in worse scenarios. This multiple transport system will not only get the produce to the markets in good time but it will also eradicate unnecessary wastage, lower cost.
In conjunction with this Government sanctioned major distribution depots should be set up in the various geo political zones as a one stop produce farmers market where farmers unload their harvest and sell wholesale.
The last area which is the untapped potentials of Agric derivatives just like the fore going demands critical Government interference and actions. In first world countries research into Agric derivatives is led by the Government partnering with science community, in addition the higher education sector research students and counterpart funding by food industries. Because of the uniquely fertile land diverse botanical species we are blessed with, there are wide and varied species of plants, fruits, seeds we are still unfamiliar with their potentials, which require diligent and in-depth scientific research to unlock.
In Holland the country is built on dairy produce which is derived from livestock one of many different sectors we are blessed with. In Switzerland they have built a reputation and fortune on making the most luxurious chocolate derived from cocoa which we also produce. We have maize with several derivatives, there are more derivatives from cassava, cocoyam, rice to mention a few amongst many other commodities whose potentials have not been explored scientifically. The agricultural derivatives market is a multibillion dollar sector we can also get an healthy slice of but only after the right Government intervention and subsequent enabling environment fostered.
For us to be able to achieve this, the government must fund researches into food technology, research laboratories must be set up to come up with non toxic and safe ways of discovering and preserving farm produce and even processed food,fruits etc from our wide and varied agric produce, creation of hybrid seedlings which can yield much more bountiful harvest to feed our bourgeoning population. The funding of the science community, food technologists cannot be overstated. Our various higher institutions can also offer rich pickings in researchers of modern and cutting edge research,all they need is Government funding and encouragement. The food industries are also a sector that can be encouraged to spend more in funding researches, they have vested interest in this area hence with government encouragement in forms of helpful policies, tax rebates etc can encourage them to invest even more.
All these advice or suggestions are by no means exhaustive, besides realistically speaking such policies can only be enacted gradually over an extended period of time, especially factoring in reality of political expediency, and the crippling government bureaucracy. However Government enacting policies in this direction will not only fulfil the election manifesto of diversification in the direction of non oil, it will also rescue us from an over dependence on imported food in the process strengthening the Naira, providing a sector that can successfully absorb the legion of unemployed Nigerians while stimulating the dormant economy and providing food security.
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