Odds against Nigerian agricultural promotion policy

Unless the Federal Government assert firmness on policies that discourage importation of certain food items that could be produced locally in large quantity for consumption and export, efforts to diversify the economy through agriculture would remain a mirage.

Available information indicates that activities of some big players in the sector whose businesses have been thriving on importation are already threatening the realization of the lofty goals of the Nigerian Agricultural Promotion Policy.

Indeed, farmers such as rice millers, dairy processors, and tomato processors are crying that their businesses are being threatened by the increase in smuggling and importation of agricultural produce into the country.

They are now at the mercies of the government to take the bold steps by calling off the bluffs of many of the multi national companies so as to increase local production.

Many local producers have complained bitterly on how smuggling or importation of food items is threatening their investment, and unless decisive measures are taken by the government to protect their investment, their businesses may go down the drain.

The Nigeria’s population of over 170million people has made the private sector, both local and foreigners to develop an uncontrollable appetite for the Nigerian market and everyone wants to have their own share of the market, it is now imperative that the federal government, in line with its diversification campaign, to strengthen the capacity of the indigenous players who are willing to grow Nigerian market and create more jobs.

The Rice Processors Association of Nigeria (RIPAN) recently at a press briefing in Abuja raised alarm over massive smuggling of finished parboiled rice from the Republic of Benin, Niger and Cameroon. Of concern to them is that Nigeria is the only country on the West African coastline that eat parboiled rice, however they were able to gather facts that 1million metric tone of finished parboiled rice berthed at the Republic of Benin, their fear is that if the rice is pushed into the Nigerian market, it would not only affect their investment but also kill the huge investments made by the federal government in various intervention programmes including over 25million farmers that are engaged in rice farming.

RIPAN has therefore, urged the federal government to engage the governments of the neighbouring countries on modalities to fashion out joint anti-smuggling initiatives in tackling illicit smuggling of the rice into the country borders. The group also stressed the need for the countries to increase their tariffs on rice.

They also advised that the federal government could threaten the countries with strong economic sanctions for aiding and abetting smuggling of rice into the country, saying it would go along way in reducing the perceived economic sabotage against Nigeria.

RIPAN stressed the need for Nigerian Custom Service to collaborate with the Director of State Security Service and other relevant security agencies to design strategy to track the unpatriotic elements and bring them to book.

“We recommend that the security agencies set up a committee that would do a guerrilla raid on markets to pick up samples of these rice products: trace and apprehend their source and confiscate the products to serve as deterrent measure,” RIPAN said.

They also urged the Comptroller General to sustain his policy of zero tolerance to corruption in the service and also send strong signals to his men at the borders to maintain discipline and integrity and not be used by smugglers to smuggle over 1million tons of rice currently warehoused in the neighbouring countries with the dubious intention of smuggling them into Nigeria during the forthcoming festive season.

They said the customs service need to investigate the roles played by some conglomerates based in Nigeria who are at the forefront of smuggling by importing and diverting rice cargoes to neighbouring countries, saying RIPAN would stand by to provide the Custom Service with necessary information at their disposal.

Indeed, Dangote Tomato Processing Plants had to shut down three month after opening their factory because of increased smuggling of tomato paste into the country despite ban by the federal government. The Vice Chairman of Dangote Group, Mr. Sani Dangote while speaking to journalists had alleged that some importers currently import the product from China and in their bid to avoid the payment of duty and tariffs to the Nigerian custom, they establish large warehouse in Ghana in the free zone under the disguise of ECOWAS, the importers warehouse the product, package it and push the commodity as retail packs into the Nigerian market.

Dangote who expressed regret at the development said, “may be we were not as smart as the importers we shouldn’t have opened a factory, we should have just being importing and making our profit.” He said if they continue to produce, they might continue to run at loss adding that they have reported the matter to the Ministry of Agriculture, Finance, and National Planning but they are yet to get any result.

He further alleged that the Chinese government had reduced the price of the commodity by 50 per cent, so that they would continue to benefit from the large Nigerian market given the increasing foreign exchange. He said, “with the low duty of 5 per cent, it’s easier for the importers to bring in the product and still make a lot of gains.

“Even though Central Bank said it’s not giving any importer dollars to import tomato paste, but other countries like China have dropped their price by 50 per cent to ensure that even though there is devaluation of Naira, they will be able to sell to those who want to buy through the parallel market. As of today, the government duty is so low at 5 PER CENT, so with that low duty, China dropping their price to less than 50 per cent.”

Stressing the need for government to improve the capacity of local farmers, he said “unless government does something, there is no way we can pay a local farmer who has no capacity compared to a Chinese farmer. A farmer here gets only about 12 tones per hectare, the Chinese farmer gets over a 100 tones supported by government and other support.”

The Vice Chairman of Dangote group lamented that the government has been “talking for the past one year and up till this very moment, there is no clear policy on where they are heading. A clear-cut direction is what is hampering the situation and unfortunately, we are in the month where farmers have to start planting and there is no directive, no clear cut policy. They promised before July, there would be a policy in place, but today, there is still no policy, no guideline on what to do.”

He noted that the Minister of Industry, Trade and Investment, Mr. Okechukwu Enelamah has been talking about bringing the importers to the round table with the local producers so as to fashion out a common grounds, unfortunately, there is no way they can find a common ground when somebody’s business is about import and the other is about local production.

He pointed out that with the current situation in the tomato processing industry, there is no way any investor would want to do a backward integration. He said, “Our hope is that let the President take the initiative if the ministries have failed to take the initiative. If it gets to the president, I am sure, he won’t want to see his vision diminished by some bureaucratic process.

“But it’s very unfortunate because thousands of farmers will continue to suffer because of companies that are bent on importing to the Nigerian market. Nigeria is a big market for any tomato exporter so they will do everything possible to see that tomato keeps coming to Nigeria unless our government takes the bold step and do the right thing.”

The major objective of the Agricultural Promotion Policy of the federal government is to increase food production both for local consumption and export purpose in order to increase foreign earnings from the sector and boost the nations Gross Domestic Product.