We
are doing a series of publication on the potential of Agriculture in Nigeria.
Agriculture is the next big thing in Nigeria after oil. It has the
potential to revolutionized Nigeria economy and reduced poverty in any nation.
Those who invest in Agriculture now will smile in the future.
Agriculture
is not crop production as popular belief holds - it's the production of food
and fiber from the world's land and waters. Without agriculture it is not
possible to have a city, stock market, banks, university, church or army.
Agriculture is the foundation of civilization and any stable economy.
Crude
oil sell at $40 per barrel while Palm oil sells at $90 per barrel in the
international market today yet Nifor (Nigerian Institute Of Oil Palm Research
Benin) Ewohimi Palm Company is moribund. Due to corrupt incompetent leadership
in Nigeria, some state government are crying they can’t pay salary, yet we have
arable land in Nigeria. Nigerians, we need to return to AGRICULTURE. Crude oil
is a curse AGRICULTURE is a blessing. The land will never ceased yielding
seeds. Where there is land there is blessings. Let US return to the land. @Williams
Patrick Praise Jr
AGRICULTURE, With its status as the largest employer of labour
in the country and its huge potential to become an alternative foreign exchange
earner, Eromosele Abiodun posits that now is the time to take a serious look at
the agriculture sector
Renowned
physicist and Nobel Laureate, Albert Einstein once said: “In the middle of
difficulty, lies opportunity.” A careful consideration of Nigeria’s current
economic meltdown reveals the truth behind this aphorism and why serious
attention must be paid towards diversifying the economy. In recent times, the
country’s foreign exchange reserves have dropped below $30 billion as at
January, 2016 and the currency has continued to lose value as the gulf between
the parallel market and official rates the naira to the dollar widens further.
Crude
oil accounts for over 90 per cent of Nigeria’s foreign exchange earnings, 35
per cent of gross domestic products (GDP), and 75 per cent of government revenue.
However,
with the fall in oil prices, and with no commensurate cut in production,
Nigeria now finds itself in an economic bind. The current state of agriculture
in Nigeria is only a shadow of what it used to be but it can be said that there
are encouraging signs of improvement. It is common knowledge that about 80 per
cent of Nigerian land is arable and has produced major crops, including beans,
sesame, cashew nuts, cassava, cocoa beans, groundnuts, kolanut, maize (corn),
melon, rice, millet, palm kernels, palm oil, plantains and rubber, among
others. For many decades, the sector has been under-funded and not received the
attention it deserves. As such, small holder farming forms a large percentage
of the sector within Nigeria. Poor farming methodologies, lack of access to
finance, post-harvest losses due to lack of storage facilities, unreliable
power supply, poor transport infrastructure and unattractiveness of farming in
terms of returns for many young people are some of the reasons why agriculture has
remained on the back burner of our national life.
Nigeria
has huge agricultural potential. With over 84 million hectares of arable land,
of which only 40 per cent is cultivated; a population of 167 million people,
making her Africa’s largest market; 230 billion cubic meters of water; and
abundant and reliable rainfall in over two thirds of its territory, the country
has some of the richest natural resources for agricultural production in the
world. Not surprisingly, Nigeria used to be a major player in the global
agricultural market in the past, as the world’s largest producer of groundnuts
and palm oil in the 1960s, and the second largest exporter of cocoa. The
country was also self-sufficient in food production before the emergence of oil
in the 1960s.
In the past four years, Nigeria’s agriculture sector has undergone major reforms and transformation.
The
introduction of Agricultural Transformation Agenda (ATA) brought about reforms
in the input delivery or Growth Enhancement Support (GES) Scheme, agricultural
financing, value chain development, including the Staple Crop Processing Zones,
and farm mechanization have yielded an abundant harvest for farmers and great
gains for the country. Between 2011 and 2014, national food
production grew by 21million metric tonnes and led to a sharp reduction in food
imports. Nigeria’s food import bill fell from an all-time high of
N3.19 trillion in 2011 to N635 billion in 2013; a 403 per cent
reduction. Direct farm jobs rose by 3.56million in the period 2012
to 2014 due to ATA interventions. Agriculture has become an exciting
sector in Nigeria.
Contribution
to GDP Agriculture is made up of four sub-activities, namely: Crop Production,
Livestock, Forestry and Fishing. In nominal terms, the sector grew by 9.50 per
cent year-on-year. This was higher than growth rates recorded in the
corresponding quarter of 2014 and the third quarter of 2015 by 3.22 per cent
points and 0.16 per cent points respectively.
According
to the National Bureau of Statistics (NBS), growth in the sector was driven by
output in Crop Production accounting for 87.01 per cent of overall growth of
the sector. The NBS in its Q4 2015 national GDP report said agriculture
contributed 22.56 per cent to nominal GDP during the quarter. This, it stated,
was marginally higher than shares recorded in the corresponding period of 2014
yet lower than the third quarter of 2015 by 0.49 per cent points and 1.95 per
cent points respectively.
“Real
agricultural GDP growth in the Fourth Quarter of 2015 stood at 3.48 per cent
(year-on-year), a decrease of 0.17 per cent points from the corresponding
period of 2014. Growth in the Fourth Quarter was 0.02 per cent points higher
from the Third Quarter of 2015. While positive, growth in agricultural output
has been relatively lower compared to the corresponding period of 2014 as a
result of lower crop output which in turn was as a result of security
challenges during the quarter. The contribution of Agriculture to overall GDP
in real terms was 24.18 per cent in the Fourth Quarter of 2015, marginally
higher from its share in the corresponding quarter of 2014, and lower from the
Third Quarter of this year by 2.61 per cent points,” the NBS said.
Overtaking
Oil, Manufacturing Sectors Analysis
of the performance of the three sectors in the fourth quarter of 2015 showed
that the agricultural sector is doing well. There are 13 activities in the
Manufacturing sector; Oil Refining; Cement; Food, Beverages and Tobacco;
Textile, Apparel, and Footwear; Wood and Wood products; Pulp Paper and Paper
products; Chemical and Pharmaceutical products; Non-metallic Products, Plastic
and Rubber products; Electrical and Electronic, Basic Metal and Iron and Steel;
Motor Vehicles and Assembly; and Other Manufacturing.
Nominal
GDP growth of manufacturing in the Fourth Quarter of 2015 according to the NBS,
was recorded at 6.93 per cent (year-on-year), 12.19 per cent points lower than
the 19.12 per cent recorded in the corresponding period of 2014 partly as a
result of higher operating costs.
“Growth
was 2.13 per cent points higher than the Third Quarter 2015 recorded at 4.80
per cent. On a Quarter-on-Quarter basis, the sector grew by 0.33 per cent.
Contribution of Manufacturing to Nominal GDP was 9.09 per cent in the fourth
quarter of 2015, lower than the 9.11 per cent recorded in the corresponding
period of 2014, and 9.67 per cent in the third quarter of 2015 “In the
fourth quarter of 2015, real GDP growth of the manufacturing sector slowed by
13.09 per cent points to 0.38 per cent (year-on-year) from 13.47 per cent
growth recorded in fourth Quarter of 2014. Growth was however 2.13 per cent
points higher than rates recorded in the Third Quarter of 2015, (Figure 6). On
a quarter-on-quarter basis, the sector slowed on the margin by 0.03 per cent,
with oil refining and motor vehicle and assembly weighing on the sector
manufacturing, “the NBS said.
It
added: “During the period under review, Oil production stood at 2.16million
barrels per day (mbpd) 0.3 per cent lower from production in Q3 of 2015. Oil
production was also lower relative to the corresponding quarter in 2014 by 1.0
per cent when output was recorded at 2.19mbpd. As a result, real growth of the
oil sector slowed by 8.28 per cent (year-on-year) in Q4 of 2015.
“This
represents a decline relative to growth recorded in Q4 of 2014 recorded at 1.18
per cent. Growth also declined by 9.33 per cent points relative to growth in Q3
of 2015. Quarter-on-Quarter, growth also slowed by 19.10 per cent. As a share
of the economy, the Oil sector contributed 8.06 per cent of total real GDP,
down from figures recorded in the corresponding period of 2014 and in Q3 of
2015 by 0.91 per cent points and 2.21 per cent points respectively.”
However, with its status as the largest employer of labour in the country, its
huge potential to become a major foreign exchange earner and help boost the
nation’s revenue base, now is the time for everyone, government, citizens and
corporates to take a serious look at the sector, even as the nation moves away
from over dependence on oil.
Corporate
Bodies to the Rescue However,
it is heartwarming to see that corporate bodies such as the Dangote Group,
Guinness Nigeria Plc, British American Tobacco Foundation, have picked up the
gauntlet in the drive to give agriculture the oxygen it needs to thrive. During
the company’s pre-annual general meeting briefing in Lagos, Managing Director
of Guinness Nigeria Plc, Peter Ndegwa, had said that the company has a target
of sourcing over 80 per cent of its raw materials locally in the coming years.
He said that this was a fundamental part of the company’s social and economic contribution to the Nigerian market and this commitment is reflected not only at local but also at regional level as the Diageo Group has a target to reach the 80 per cent mark on Local Raw Materials (LRM) for Africa by 2018.
Ndegwa
noted further that the multiplier effect of this strategic move of the company
on society and the economy will far outweigh the challenges that may be
initially faced.
Apart
from driving down costs for the manufacturers and ease the pressure on the
nation’s dwindling foreign reserves, local raw materials sourcing will also
play an important role in creating employment opportunities, boost income
levels and empower farmers along the agriculture value chain as well as small
and medium enterprises who serve as suppliers to big businesses thereby
resulting in such benefits as application of modern technologies, improved
quality control, higher output, product marketing and self-sufficiency.
Interestingly,
Diageo’s brands have always been closely connected with agriculture. In the
1800s, Arthur Guinness, the son of the brewery’s founder, served in the Farming
Society of Ireland. Currently, maize and sorghum constitute 80 per cent of the
Guinness Nigeria’s agricultural raw material input. Therefore, building
strategic partnerships with banks, agricultural NGOs, donor agencies and
research organisations and leveraging these partnerships to mitigate some of
the challenges that currently affect the sorghum value chain will take the
industry to the next level.
Sourcing
Raw Materials Locally Guinness
Nigeria, which has been in the brewing business in Nigeria since 1950, was the
first major brewing company in Nigeria to begin sourcing its raw materials
locally. In 1984, the brewery acquired a 3000 hectares farm in Mokwa, Niger
State for the production of maize. Between 1995 and 1998, the company had
established an out grower scheme primarily for the promotion of ICSV 400, a
particular sorghum variety among farmers in Nigeria.
The
variety made it cheaper to process sorghum for malting than other varieties. By
1997, the company started a contract grower scheme with farmers in Kano,
Kaduna, Katsina and Taraba States. The objective of the company’s contract
growers’ scheme was to create awareness about the improved variety and
consequently get a large group of farmers to adopt and grow the crop. With this
rich pedigree of engagement in agriculture, it therefore does not come as a
surprise that the company has made a strategic commitment to continually
increase the quota for its locally sourced raw materials.
Job
creation and economic empowerment, Ndegwa acknowledged, remain major challenges
in Nigeria, but the local content initiative will substantially address these
challenges by targeting the poorest areas and channeling investments into
job-creating segments in the agriculture value chain.
Similar
initiatives by other private sector entities will decidedly trigger a huge
impetus towards diversifying Nigeria’s economy and reclaiming its primacy as a
leading agricultural economy. The Lagos state government recognises this fact.
Lagos,
Kebbi States Initiative Recently,
the state governor, Akinwumi Ambode announced the plan to work with Kebbi state
to provide food for Lagosians, stressing that the future of Lagos State was
partly tied to deliberate resolution on food security
He stated this during the signing of Memorandum of Understanding between Lagos
and Kebbi State on the development of Commodity Value Chains.
He said
food production and self-sufficiency required its immediate attention at policy
and strategic levels to sustain the state, adding that Lagos State is the
largest consumer of food commodities in Nigeria by virtue of its population.
“We have the market, with the required purchasing power also. Lagos State has an estimated consumption of over 798,000 metric tons of milled rice per year which is equivalent to 15.96 million of 50kg bags, with a value of N135 billion per annum.
“We
have the economic prowess to produce rice locally. The era of imported rice is
gone. The reality is for all of us to embrace the consumption of local foodstuff
and commodities. In addition to rice, Lagos is currently consuming 6,000 herds
of cattle daily which may increase to 8,000 in the next five years,” he said.
According
to Ambode, the bulk of the vegetables produced in the country end up in the
Lagos markets as the state is one of the largest producers of poultry and thus
had a large demand for maize for livestock feed production.
He
said: “The state also houses most of the industrial users of wheat and sorghum;
mostly flour mills, bakeries, breweries and food manufacturers. Kebbi State, on
the other hand, is blessed with a vast arable land suitable for the cultivation
of rice, wheat, groundnut, maize, sorghum and sugar cane.
“It is
an agrarian State with over 1.2 million hectares of arable land characterised
by very large floodplains, lowland swamps and gentle slopes. In the 2014/2015
wet season, over 600,000 hectares of land was deployed for rice cultivation in
the three senatorial areas of the state.
“The
numerous thousands of our market women and men can become key employers of
labour as distributors of ‘Ibile Rice’. We can also brand and package rice in
the names of our distributors and market women. As a state, we shall adopt our
local rice as a state dish in all ramifications.”
He
explained that the special purpose vehicle will allow the entrance of private
sector investors and other states in expanding the rice mill at Imota, Ikorodu
and other locations. We have already designated the 100 hectare land at Imota
as the Agric Park in the State. Other locations in and outside the State will
be vigorously activated to fulfill our mission in record time,” he stated.
Speaking,
Governor Atiku Bagudu of Kebbi State said that the two states had a long
history of trade partnership and were just making it stronger with the MOU,
adding that the partnership would provide 60 to 70 per cent of the country’s
rice need.
He said
his state had four emirates, including Gwandu, Argungu, Yauri and Zuru
Districts in some particular goods and that they would all contribute to the
commodity value chain.
“We believe in the vision of President Muhammadu Buhari to transform Nigeria from dependency on oil. We believe that the two states can significantly contribute to and improve food sufficiency and food security for our country. We believe that our states can benefit from this cooperation and we can jointly add value by creating employment,” he said.
