Addressing agriculture

The Nigerian government is waking up to the fact that agriculture can play a key role in lessening the country’s dependence on oil, reduce food imports and feed its people.

Despite its huge population and vast arable land, Nigeria agriculture capacity has dwindled in recent years. The country spends trillions of Naira annually on food imports despite the fact that it has a land area of more than 924,000 square kilometers of which three-quarters is suitable for farming. The problem is that less than half of that land is being exploited agriculturally.

Still, because of its abundant land and water resources, Nigeria’s output of food per capita is among the highest in Sub-Sahara Africa and agriculture still accounts for 40% of GDP. The sector provides employment (both formal and informal) for 60% of the country’s population of approximately 160 million people.

Nevertheless, the undeveloped state of the country’s agriculture is shown by the fact that 80% of agricultural output comes from poor, rural farmers farming on less than one hectare plots. Most of the smallholder farmers lack access to capital to purchase seeds, fertilizers, herbicides, and buy or rent mechanized equipment and related services to increase their productivity and raise their incomes enough to get out of poverty.

While successive administrations have focused on developing the capital-intensive oil sector, the agricultural sector has been neglected. As a result, Nigeria, which was a large net exporter of agricultural products before the oil boom in the 1970s, is now a net importer of agricultural products. In 2010, agricultural imports exceeded $3 billion.

Moreover, there are regular shortfalls in national domestic production, which, while on the rise, is not enough to meet national food demand. Part of this is due to post-harvest losses which range from 20% to 40% because poor harvesting, processing and storage techniques. Due to the unstable food supply, 61% of Nigerians are malnourished.

Boosting production

To resolve this situation, in August 2011 the federal government identified agriculture as a key development priority. By focusing on agriculture, the government hopes to halve poverty by 2015 and diversify the economy away from the oil sector. The aim is to make agriculture a business rather than a development issue with emphasis on public private sector partnership (PPP). The government’s efforts will focus on five crops (rice, cassava, sorghum, cocoa and cotton) and is expected to inject a total of $2 billion additional income into the hands of Nigerian farmers.

By 2015, the government intends to increase the annual production of rice from the current 3.4 million metric tons to 7.4 million metric tons; cassava production from 34 million metric tons to 51 million metric tons; sorghum production from 9.3 million metric tons to 11.3 million metric tons. Cocoa bean production is projected to increase from 250,000 metric tons to 500,000 metric tons with For the cotton lint sub-sector, the agriculture ministry aims to achieve a record increase of 140,000 metric tons from its present production level of 20,000 metric tons.

Minister of Agriculture and Rural Development, Dr. Akinwunmi Adesina says that the agricultural sector has the potential to create about 3.5 million jobs under the program. “If we fund the sector well, about two million jobs can be created from cassava alone, one million jobs can be created from rice, about 400,000 jobs can be created from cocoa, while about 125,000 jobs can be generated from cotton,” Adesina says.

Nigeria has seen some improvement under earlier programs. Improved cassava varieties helped Nigerian farmers boost production by 10 million tons between 2002 and 2009, which made the country the world’s biggest cassava producer. And a research team led by the International Institute of Tropical Agriculture developed three new varieties of cassava high in vitamin A that could improve the livelihoods of millions of farmers in Africa and help put an end to malnutrition due to vitamin A deficiency on the continent.

“There is no way we can hope to develop Nigeria if the agriculture sector is left at the subsistence level”, Gordon Bristol, Nigeria’s Ambassador to France, said in an interview. “Our path to industrialization has to come through the development of agro-allied industries. We have large areas of arable land and there are literally no tropical cash or food crops that we cannot grow in Nigeria. However, we need to grow them on a large commercial scale thereby seeing agriculture as a business that adds value to the economy.”

Agricultural subsidies

The Central Bank of Nigeria has implemented a sweeping set of financial reforms to develop the real sector, including funding for agriculture. In reviewing the performance of the agriculture sector over the last year, Lamido Sanusi, Governor of the Central Bank of Nigeria, stated: “A total of $22 million was guaranteed to 20,830 farmers under the Agricultural Credit Guarantee Scheme (ACGS) in the third quarter of 2011. This represented an increase of 190.5% and 6.6% over the levels in the preceding quarter and the corresponding quarter of 2010, respectively.

“A sub-sectoral analysis of the loans guaranteed indicated that the food crops sub-sector received the largest share of funds for 17,798 beneficiaries, while the livestock sub-sector got the second largest share for 683 beneficiaries. Also, 333 beneficiaries in the fisheries sub-sector obtained funds as did 433 beneficiaries in the cash crop sub-sector.”

The government has also addressed protracted issues of inadequate credit and high interest rates in agricultural lending through the Commercial Agriculture Credit Scheme (CACS) a $1.3 billion program that makes money available at low interest rates to foreign investor-farmers and other practitioners in the agricultural sector.

The funds are channeled through the Deposit Money Banks (DMBs) in Nigeria to farmers. The loan scheme carries an interest rate not exceeding 9%, with a maturity period not more than seven years. As of February 2011, more than half had been released to finance 109 projects made up mainly of privately owned projects. Also, 19 state governments received up to more than $6 million each for disbursement to farmers’ cooperatives and unions within their constituencies.

Bank sources have reported that less than two years from the establishment of CACS, about 50 percent of the available funds have been taken up by medium to large-scale farmers. In this scheme, the private commercial banks are obligated to recover their loans, so the selection of projects is very thorough and the funded projects are achieving the desired expansion in scale, while steady repayment has started on some of the facilities.

Leading producer

Nigeria’s agricultural features include food crops, forestry, livestock and fisheries. Food crops account for about 30%, livestock about 5%, forestry and wildlife about 1.3% and fisheries about 1.2%. Its agricultural sector has performed remarkably well, with estimated growth rate in 2010 exceeding 6%, reflecting the good weather conditions that boosted crop production.

Nigeria is the largest producer and consumer of cowpeas, one of the most important food legume crops in the semi-arid tropics. Nigeria harvests 4.5 million hectares annually of cowpeas and accounts for 61% of production in Africa and 58% worldwide. Nigeria is also the largest producer of soybean in Sub-Saharan Africa. In Nigeria the stems and post-processed pulp (soybean meal) serve as important sources of animal feed.

The country produces nearly 50 million tons of cassava a year making it the world’s largest producer, but consumes virtually all its produce. Most of the world’s yam (sweet potato) production comes from West Africa and Nigeria alone produces 71% of that, equal to 37 million tons a year.

Cassava inclusion policy

In 2012, the Nigerian government plans to introduce policies to encourage the substitution of high quality cassava flour for wheat flour in bread. Bakeries were given 18 months to make the transition period and will enjoy a corporate tax incentive. Also, the government plans to prohibit the importation of cassava flour to further support this program.

“If we fund the sector well, about two million jobs can be created from cassava alone.”

As an added incentive to bakers for composite flour utilization, all equipment for the processing of high quality cassava flour and composite flour blending will enjoy a duty free regime. In the mean time, consultations are ongoing with the stakeholders to ensure a smooth transition.

Furthermore, the government’s agricultural initiatives include extending farmers’ credit and subsidies, supplying tractors, tools and fertilizer at subsidized rates, providing financial support for the production, and distribution of planting seeds and seedlings for Nigeria’s major cash crops, and providing grants to exporters of semi-processed agricultural products.

Storage problems

Nigeria’s total land area is 92.4 million hectares. Of this area, 91 million hectares is suitable for cultivation. Approximately half of this cultivable land is planted with permanent and arable crops, such as rubber, oil palms, while the rest is covered by forest and habitable areas. Among the states with the most abundant land areas are Niger (7.6 million hectares) and Borno (2.8 million hectares) in the northern part of Nigeria.

Despite its enormous agricultural production and potential, Nigeria spends billions annually on food imports. This is due largely to post-harvest losses which occur partly because of the absence of storage and processing facilities.

At present, the country has 12 silos distributed across the country with a combined storage capacity of 300,000 tons for assorted grains, beans and cassava, while 20 additional silos are being planned to raise the storage capacity to 1.3 million tons.

Foluke Oluwatoyinbo, Provost of the Federal College of Agriculture, Ibadan, explained that post-harvest losses largely arise from multiple sources, namely pests and diseases, natural disasters, careless human actions and inadequate storage and processing.

“People are producing foods but we lose a lot of them because we do not have the facilities to preserve and store them,” Oluwatoyinbo said.

Nigeria’s peculiar weather condition is not kind to food preservation without the aid of refrigerators and other storage and preservation devices, and most foods produced in Nigeria are perishable at harvest.

Adebayo Sodiq, Chairman of the Oyo State chapter of the Association of Cashew Growers and Buyers, says that about 50% of cashew fruits produced in Nigeria annually go to waste due to lack of storage facilities.

“The situation is compounded by the lack of foreign and local investments in storage and processing of the fruit into packages to span all seasons,” Sodiq says.

Susan Phillips, the National Women Leader of Potato Growers Association of Nigeria, recently complained that huge volumes of potatoes are wasted annually leading to enormous loses by growers.

“The federal government should broaden the strategic grains reserve program and the construction of silos by integrating facilities for storage of other ranges of agricultural products including sweet potatoes,” Phillips says.

The federal government should also provide more agricultural storage facilities for use by different categories of farmers across the country, according to Raheem Adeniji, Chairman of the Osun chapter of the All Farmers Association of Nigeria (AFAN).

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For more information:
Federal Ministry of Agriculture and Rural Development
Nigerian Association of Chambers of Commerce,
Industry, Mines and Agriculture