‘Oil palm deficit presents opportunities for investors, job creation’
Managing Director of JB Farms, Odogbolu, Ogun State, Mr Ajibola Adebutu, disclosed to FEMI IBIROGBA how lack of cheap capital, too many taxes and levies and inadequate/non-existent production data capturing hamper the development of oil palm industry, while the closure of the borders has increased demand for local crude palm oil and its derivative, vegetable oil.
What quantity of palm oil do we produce in the country and what is the deficit?
If I am going to tell you the truth, nobody can give you that information because there is no structure put in place to capture how much we produce in the country. There is no structure put in place what our demand is. The only thing I can tell you is that there is a large deficit. As I said, we took the decision some years ago to go end to end in the industry.
We have built a palm oil refinery, refining it into vegetable oil. As of today, there are about 20 to 30 palm oil refinery in Nigeria. We have the large producers of palm oil like Pressco in Edo State. It has a refinery using all its palm oil. We have Okomu in Edo State too. It has no refinery. So, it sells its palm oil to refineries. Today, there is such a demand on them that they have to give buyers allocations. For example, my refinery uses 200 tonnes of palm oil daily, which means about 6000 tonnes a month. Okomu, in January, gave me an allocation of three hundred tonnes for the month. I use 6,000 tonnes a month, but it could only supply me 300 tonnes (one-and-a-half-day raw material). So, there is a huge gap because there is no enough oil palm.
I produce palm oil that I use in my refinery, and if I add what Okomu can supply with what I buy elsewhere, there still a huge deficit of what I need. And I know it is like that countrywide. There is a huge deficit, but I will not sit here and give a figure.
Are you saying that there is room for expansion and opportunities to employ graduates through the industry?
Development of oil palm plantation is a long-term business. The closure of the borders is spontaneous and nobody knows how long it will last. So, do I want to commit money to starting a new plantation, and just as I start, three months later, the borders are opened and you are back to the status quo? So, what we have to look at is a way that it is not only the border closure that will stop the illegal importation of all the items. Even if the borders are opened, and free trade is allowed, there be mechanisms put in place that all the smuggling cannot take place again.
Youth unemployment is very high in the country. Do you think if we get it right in the agric sector, does it have the potential to reduce unemployment sustainably?
It is 100 per cent sustainable. If I can even say 1000 per cent, I will say so, because agriculture, the way we do it in Nigeria, is a huge employer of labour, especially in the oil palm sub-sector.
If you look like a country like Malaysia, they got into state now that they have to import labour from neighbouring countries to work on their plantations because they do not have enough labour. So, definitely, agriculture. If we are serious about it and do the right thing in Nigeria, is going to help our employment status a lot. We are going to employ unskilled labour. We are going to employ graduates to be trained as agric entrepreneurs and they could set up their own agric businesses and employ more unskilled workers.
How would you describe operating environment for agricultural businesses and agro-allied industry?
I will say it is tough. It is tough in the sense that there is and assumption that there is so much money in agriculture, and so you have so many government taxes. Somebody would just wake up one day and say I want to take money on this and that. How can we have a situation where somebody would come and tell you thet you have to pay because you have dung a borehole on your farm. How does that make sense when the government has not provided water?
Again, I have a plantation in Cross River State and got a call about a week ago that that a person from one ministry said we had to pay N750,000 yearly to the ministry. Why do we have to pay that kind of money? Local government would come today, state tomorrow and the Federal Government would come next. All these things are counter-productive. So, we have that problem.
Then, cited your industry or plantation in a rural area and you have created avenue for labour (employment), but you still have issues with the local community. Everybody wants a piece from you. There are too many outgoings that are not contributing to the growth of the business. If you are paying salaries, yes I am happy because I am paying salaries to people contributing to the growth of the business. If I am paying for diesel and electricity, it is good because they are contributing to the growth of the business. But when I am paying levies and levies daily that have no impact on the growth of the business, then, for me, I think, it is counter-productive.
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