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Importing palm oil shows we are not serious with diversification

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Essien

The Managing Director of Atlantic Imperial Farm, Mr. Bassey Essien, is calling on the Federal Government to immediately ban the importation of palm produce into the country. In an interview with ANIETIE AKPAN, he said importing palm produce has pushed the country back by 50 years.

What is the situation of palm oil production in the country at the moment?
Even though we don’t have sufficient data, but based on the performance in the local market last year, a lot of farmers have invested so much money in trying to upgrade their plantations. Apart from this attempts to improve existing farms, they are also investing so much on the maintenance of their plantations in order to achieve better yields. But for some strange reasons, the Federal Government gave licenses to importers to flood the market with the imported palm oil, even when it knows that doing that is a direct incentive to destroy the local farmers.

It is also counterproductive to the Oil Palm Transformation Agenda, a government policy, which was initiated by the Federal Ministry of Agriculture, which this administration inherited. So, to us in the industry, our thinking was that more incentives and more opportunities would be created for us as promised by the Minister of Agriculture, for the expansion of the sector. Unfortunately, the latest move by government has succeeded in crumbling the economy of the palm oil belt of the country. With what we are seeing now, there is no way we can enhance growth without government encouraging and giving incentives to plantation owners. It is also important to point out that from available data, it is only about 20 per cent of palm produce in the country that is from the formal sector, while the other 80 per cent is from the informal sector, that is to say from the wild groove.

The importation of palm oil must have jolted many farmers and local oil palm dealers. Has it not?
It definitely has, and they have lost a lot of money after investing extensively. For instance, last year, the price of a 25-litre container of palm oil went for between N20, 000 to N25, 000, but now it is as low as N6, 500. Matters are made worse because the government prefers to concede its right of leadership in this sector to international producers as against the local producers, even when we have comparative advantage.

Not long ago, a lot of people in the sector acquired more plots of land, invested a lot in buying fertiliser at very exorbitant prices, and also invested much in buying equipment to improve their processing facilities, but the latest move has caused serious financial losses and economic setbacks to people, who invested in the sector. With the cost of fertiliser gone way up, only the big players can easily access this input. We want to appeal to the Federal Government to come out with an intervention policy to save the sector from total collapse.

Does the Akwa Ibom State government has a package to encourage palm oil production or incentive for this class of farmers?
I think that question should be directed to the relevant authorities, but as a key player in the sector, I must tell you that the government has not done much in the oil palm sector. Before now, I used to source my seedlings from the state nursery, but of late, I source it directly from the Nigerian Institute for Oil Palm Research (NIFOR). We also import seedlings from Thailand, as well as Indonesia directly. So I strongly believe that Akwa Ibom State for instance, is a major player and in fact the biggest producer because when you look at it from the point of view of a smallholder unit and also the produce from the wild groove, we cultivate up to 60 per cent of the total palm produce in this country. So, it is a very serious economic setback to the people and players in the sector, and the government needs to do something about it. In fact, I am reliably informed by relevant authorities in the Ministry of Agriculture that the planting season will start next month, between March and April, but in the state nursery, we don’t even have even a seedling there. Traditionally, the state government brings in sprouting nuts from NIFOR to start raising them against the planting season of March and April when we have our first rainfall. The situation is bleak because that sector provides a lot of employment to our youths, especially in the rural areas, and it still has the capacity to employ more, but to expand the employment opportunities will depend on the ability of the Federal Government, in conjunction with the state, to actually take it up for a total ban on the importation of oil palm produce. We have the capacity to produce enough for our market and export. Akwa Ibom State, as one of the major oil palm producing states has the highest wild groove reserve of oil palm trees in the country. So, technically, if we harness this properly, I think it can give us much more money than even the money we have from the derivation revenue from the federal level, as well as, other sources of income.

Other than the lack of incentives, what are the other challenges that palm fruit farmers are facing in Akwa Ibom State?
We face a lot of challenges because the current agriculture policy does not take the oil palm producing belt into consideration. Presently, the Federal government’s Anchor Borrowers’ Programme does not cover palm oil production, which we have comperative advantage in. The programme covers maize, tomato, rice, millets and other grains, may be oil palm was left out of the scheme because of the long gestation period, but we are from the rainforest and that is the oil palm belt.

If the Federal Government is serious about developing agriculture, whenever it comes up with an agriculture policy, there should be allocation of resources to all agriculture produce, but when you come out with a policy, which favours certain sections of the country and antagonises the other sections, then the government is not being fair. Oil palm business when given appropriate attention, brings about more money or revenue because it has a value chain from the planting of the seedlings to harvesting, to processing and even to refining. So, a lot of people are involved and at the same time the marketing aspect is a whole lot of business. The refining process, which also has fabricators at the other end engages a whole lot of youths on a daily basis, so, I keep on wondering why the Akwa Ibom State government, as well as, the Federal Government are not taking oil palm production seriously.

To worsen matters, banks don’t give us loans, and in terms of benefiting from the Federal Government and other international development initiatives in oil palm development, we don’t have access to these funds.

Also, in Akwa Ibom State, the cost of surveying a plot of land is about the highest in the country, so a lot of farmers cannot even survey their plantations, talk less of having their Certificates of Occupancy (C of O). Even when farmers apply for their C of O for agriculture purposes, they only know when they apply and never when they are going to receive same. Sometimes, if they are not lucky, they may not be alive to receive the C of O. So, many people, who applied for it 10 years ago are still yet to collect theirs. This makes it practically impossible for a lot of people in the sector to access agriculture loan.

Does granting license to businessmen show that the government is serious with its economic diversification drive?
No country that is very serious with its agriculture policy will ever allow any importer to bring in any item that it can produce. They would rather give subsidy to the sector to grow more, regulate the price and also help the market develop. If the Federal Government thinks that opening the border and allowing anybody to bring any palm produce is the way to develop the local economy, I am sorry it can never work that way, and it has never worked anywhere in the world, and it can’t work in Nigeria. A lot of people started investing in the sector last year when the market was good; a lot of them by the end of this year will be looking for alternative sources to invest their money; a lot others will lose because agriculture, especially in oil palm plantation business is not something that you start this year, and break even this year.

But let me further make it very clear that giving licenses to importers to flood the market with imported palm oil has pushed us back and has created a crisis within the sector, which has pushed us behind for the next 50 years because if we are serious with creating alternative sources of income outside crude oil, as part of our economic diversification measures, one of the sectors that should be given a serious consideration, I think is the palm oil sector, which was sustaining this economy before the advent of petroleum. We have had a very rough season this year and our appeal to the Federal Government is, if you want our industrial sector to expand and grow in this regards, you just need to ban the importation of palm oil completely because these people, who are profiting from our sweat don’t put anything on ground, and do not employ anybody. They just sit down and import, clear their goods at the port, store them and then start selling.

But can we really make any headway in terms of increased production without improved seedlings?
At NIFOR, the demand for sprouted nuts has skyrocketed within the last five years and if the trend continues, it means that in the next few years, we will be exporting a lot of palm produce. So, why can we invest so much instead of allowing people to suddenly start bringing in the produce. A lot of investments have been made in this sector in the last five to six years, and by the time they mature in the next two years, it means it wont create any impact on the local economy, already some of us that used to hire a lot of farm hands have already cut down our employment to about 10 per cent because of the dwindling price of palm oil.

Like the government has done in the Anchor Borrowers’ Programme, it should device a means of putting in place a similar intervention in the oil palm sector. If the Federal Government is serious about realising its policy of giving employment to 10, 000 youths per state, especially in the South South, Middle Belt, South West and South East, this can be realised in palm plantations alone.


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