Seven years on, government policy on tomato still in limbo

In 2017, the Federal Government approved a policy on tomato to cut down on post-harvest losses, reduce importation of tomato concentrates and encourage backward integration. Seven years after, it’s been a case of motion without movement. Though the policy was reviewed in 2021, its implementation has been replete with some challenges, including lack of will power by government and rivalry among some ministries, GBENGA AKINFENWA writes.

Sometime in May this year, Nigerians, especially the people in the south and some parts of the north, experienced severe shortage in the supply of tomatoes. This caused widespread scarcity and astronomical increase in the price of the fruit (sometimes also described as vegetable) as well as culinary disruptions, which led to losses, reduced economic activities and distress for many households.

At the period, in Abuja, a big basket of tomatoes that sold for between N30, 000 and N45, 000 earlier in the year, increased in price to between N100, 000 and N120, 000. A small basket of tomatoes went as high as N50, 000.

At the popular Mile 12 International Food Market, Ile-Epo Market, Oke-Odo and other popular markets for perishable items in Lagos, the price of a basket of premium quality fresh tomatoes previously sold for between N50, 000 and N80, 000 in April, jumped to between N140, 000 and N150, 000. It was similar story in other states. The situation worsened the food insecurity in the country, particularly for vulnerable populations, as tomato is a staple ingredient in, virtually, all Nigerian dishes.

Many farmers and market analysts described the last experience as the worst in recent time as tomato price surged by over 200 per cent. Investigations revealed infestation of Tomato Ebola, high cost of inputs, insecurity, post-harvest losses and inadequate rainfall as the factors responsible.

Tomatoes are indeed popular fruits/veggies and one of the main ingredients in many Nigerian and international dishes, as well as in the beverage and pharmaceutical industries.

Nigeria is known to be one of the countries with high quality tomatoes in the world, which can be used for juice, ketchup, paste and can also be consumed raw. Nigeria is the second largest producer of tomatoes in Africa, and 14th globally, with an average yearly yield of 2.3 million metric tonnes, accounting for about 65 per cent of all tomatoes produced in West Africa.

However, the country still depends solely on importation, as the demand far outweighs the supply. Currently, the national demand stands at three million metric tonnes, leading to reliance on imported tomato paste to bridge supply gap. Nigeria ranks as the 13thlargest importer of tomato paste in the world and third in Africa, importing over 1.3 million metric tonnes of the fruit and the paste yearly.

One of the major reasons attributed by industry players and economists for the wide demand/supply gap is the acute shortage of the produce caused majorly by low yield.

For instance, between 2006 and 2016, tomato yield remained very low at an average of 5.47 tonne per hectare (ha), relative to the world average yield of 38.1 tonne/ha. This was attributed to the use of old seedling varieties, pest and weed invasion, and low soil fertility.

It was leant that about 50 per cent of fresh tomatoes produced yearly are lost to post-harvest challenges, including poor supply chain management manifesting in inefficient storage facilities and poor transportation systems.

Constant outbreak of diseases also stunts the growth of the industry. In 2016, the country experienced a major pest attack – theTutaAbsoluta outbreak, popularly called Tomato Ebola. This resulted in shortage of tomatoes for the processing industry, significant hike in the market price and increased import. According to report, in 2016 and 2017, Nigeria imported tomato paste estimated at $360m yearly and it has been increasing since then.

What really worsened the situation was the shutting down of some tomato processing industries when they couldn’t break even. The influx of imported tomato paste forced them out of market. There was also the challenge of getting fresh tomato supply from farmers.

Based on the reality on ground, the Federal Government, in 2017 launched the Tomato Policy Guideline, as part of efforts to address scarcity and promote local production.

Part of the guidelines of the policy initiated by the then President Muhammadu Buhari in March 2017 was towards reducing tomato import, increasing local production, supporting farmers and processors, improving food security and boosting the country’s economy.

The outlined strategies for achieving these goals include provision of incentives for tomato farmers and processors; establishment of tomato processing facilities; improving agricultural practices and technology; enhancing trade and market access; and encouragement for private sector investment

A letter from the Federal Ministry of Industry, Trade and Investment (FMITI)conveying the Federal Executive Council (FEC) approval to the Minister of Agriculture and Rural Development in 2017 itemised the measures to boost the industry as classification of greenhouse equipment as an agricultural equipment to attract zero percent import duty, and ban on importation of tomato paste, powder or concentrate.

Other measures are the ban on tomato prepared or preserved by vinegar or acetic acid and other; increase in the tariff on tomato concentrate and “other” concentrates from five per cent to 50 per cent and additional levy of $1,500 per metric tonne; restriction on the importation of tomato concentrate to the Seaports to address abuse of ECOWAS Trade Liberalization Scheme (ETLS), and the inclusion of tomato production and processing in the list of industries eligible for investment incentives administered by the Nigeria Investment Promotion Commission (NIPC).

As a follow up to the request, the then Minister of Finance, Kemi Adeosun, in a circular dated May 19, 2017, advised the Nigeria Customs Service (NCS) to create a new H.S. Code for agricultural greenhouses distinct from the item “Prefabricated buildings” with H.S. 9406.00.00.00 in the ECOWAS Common External Tariff (CET).

In addition, she advised the NCS to devise mechanism to guide future importation as a safeguard to potential abuse of the new H.S. Code.

“A grace period of ninety (90) days, commencing from the effective date of implementation of the measures (19th May, 2017), shall be granted to all importers who had opened form ‘M’ and must have entered into irrevocable Trade Agreement before the coming into effect of this circular, to process and clear their goods at the prevailing duty rates. However, any new import transaction entered from the effective date of this circular, shall be subjected to the new regime. Please note that the tariff changes and fiscal policy measures take effect from the date of this circular, May 19, 2017. You are, therefore, requested to ensure strict compliance please,” the letter read.

As laudable as the policy is, seven years after it was launched, findings show that it is yet to fully take effect, as farmers have continued to wallow in abject poverty, with more processing industries shutting down amid huge losses incurred on daily basis.
Though every stakeholder in the industry agreed that the policy has the potential to grow the tomato value chain in Nigeria, it is considered to have somersaulted due to poor implementation and weak monitoring, just like previous government policies.

Sometime in 2018, the leadership of the Tomato Growers Association of Nigeria (TOGAN)accused officials of the Federal Ministry of Finance, the NCS and National Agency for Food Drugs Administration And Control (NAFDAC) of frustrating government’s effort at protecting farmers through the policy.

“Some of the indigenous factories that off-take tomatoes from farmers have shut down because of lack of buyers of their concentrates. These packers would rather import from China and other countries without duty or smuggle them through Republic of Benin.

“Unfortunately, when we approached the Nigerian Customs Service regarding the motive behind the non-implementation of the policy, we were told that between the date the policy was approved and the date they were given the gazette of the policy for implementation, it had exceeded the stipulated time of 90 days, hence they couldn’t implement as it had expired.”

Aside the economic losses, industry analysts and stakeholders in the sub-sector have expressed concern as per why NAFDAC, which has publicly declared that imported tomato pastes are only 28 per cent tomatoes and the rest are additives and chemicals has failed to confiscate those products that are being imported to the country, since they consider them unfit for human consumption.

Investigations revealed that importation of the products has continued unabated and government agencies have refused to bring to justice importers and marketers of the unhealthy tomato paste as revealed by Nigerian’s Food Safety and Applied Nutrition (FSAN).

According to TOGAN, due to lack of the needed infrastructure in rural farming communities, farmers are losing over 50 per cent of their expected production yearly. The Food and Agriculture Organisation (FAO) put the yearly losses at around 1.2 million to 1.5 million metric tonnes of tomatoes, which in monetary terms is estimated at between N20billion and N30billion.

The Guardian learnt that due to the poor implementation of the policy, on August 30, 2018, the tomato growers, processors and marketers association petitioned the NCS, requesting total ban on importation of tomato concentrate and paste. The body frowned on the way and manner tomato pastes flood Nigerian markets at the detriment of local farmers and producers.

But in its reply dated January 17, 2019, and signed by the Comptroller, Tariff/Dispute Resolution, H.K Gummi, the Customs Service said it had fully implemented the policy as itemised.

“A Tomato Levy Pool TSA Account has been opened in the Central Bank of Nigeria (CBN), but as of December 2018, there is no record of remittance into it. You are, however, invited to avail the service with any relevant information on any observed informal import of tomato concentrate and paste,” the reply read in part.

Due to the concern raised by the industry stakeholders, the policy was in 2021 reviewed by the Federal Government. Tagged“2021 Fiscal Policy Measures And Tariff Amendments” and dated August 31, 2021, the policy was made up of Supplementary Protection Measures (SPM) for the implementation of the ECOWAS CET 2017 – 2021, with effect from September 6, 2021.
A circular signed by the Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed, confirmed the amendments.

Some stakeholders complained that the policy was reviewed without the involvement of all stakeholders that developed the framework. They said the review affected the gains that were already recording.

It was learnt that during a stakeholders meeting, the Customs confirmed that the tariffs were paid into a dedicated account at the CBN but the money seemed to have disappeared.

One of the sources said: “I don’t know what the several millions or billions of naira have been used for, either for loan or what, but the key stakeholders, which include the tomato association, don’t seem to be part of that.”

The Component 4 Lead of HortiNigeria Programme, Mr. Abdullahi Umar, who also confirmed that the policy was revised in 2021 basically to support backward integration strategy, said: “However, we observed it doesn’t achieve the purpose. Some companies are still being given the waiver to off-take pastes and that is still affecting the backward integration.

“Ideally, according to the policy, importation of one metric tonne of tomato paste needs to attract $1,500. There is a dedicated account for that with the CBN.

“And the essence of collecting that money was to further develop the value chain. So, we did convey a meeting last year, we are going to convey another one this month (October) to review the update. Part of the mandate of HortiNigeria is to see improvement in not only the tomato policy but policies that are relevant to the horticulture sector that will help develop the vegetable value chain.

“We did a learning event in Abeokuta, Ogun State in July, where all the key ministries and stakeholders were present, and they are willing to come to the table to try to see what can be improved.”

A former Managing Director, Dangote Tomato, Kano, Abdulkarim Kaita, expressed regret that government’s inaction had given leeway to importers of tomato paste into the country, noting that it has practically become near impossible for the local industries to compete with the tomato products coming from China in terms of price.

“For the past three years, Dangote Tomato has shut down. The company was sourcing local tomatoes to produce, but the high cost of energy, and the high cost of fresh tomatoes made it impossible for us to compete with the imported substandard ones coming from China. The ones coming from China is not 100 per cent tomato – they put all sorts of things like starch, flour, and just, maybe 10 per cent of tomato and add colours.

“So, these ones we are producing with 100 per cent tomatoes and buying fresh tomatoes from the farmers cannot compete. Prices are changing daily in the Nigerian market and you have to move that price or you run out of business.

“How can you compete with that? So, anybody that is in that line, to invest locally, he cannot compete with these smuggled tomatoes because they are so cheap. And because of the poverty in the nation, price is a great factor, not quality. People just buy what they can only afford to eat. There is no way these mama put will buy very expensive tomato paste because the people buying from them are common people. So, they are also looking for the cheapest food. It became almost impossible to run our operations. We had to shut down. Yes, the quality is there.”
Kaita alleged failure by the implementing agencies, noting that as the smuggling through the borders is increasing, the smugglers are making more money, which is the reason smuggling of tomato paste may never stop.

“Most people are making money on shipping, in Nigeria in particular. How can you tag importation of rice into Lagos from Cotonou to Badagry, as smuggling? Is that smuggling? With all the checkpoints on the border roads, these produce come into Lagos and go into a warehouse, and they charge them, and you say it is smuggling.

“You’ll never hear that they were arrested, you’ll never hear some of them were charged for smuggling. This policy is just shit-talk. The will power to implement it is not there.

“So, we’ll continue on this rigmarole, only God knows when. Many people are making money. They will frustrate everything. A good case is that of our refineries that are not working all these years. The staffers are being paid salaries, sent for meetings abroad, but no refinery is working. So, our governments are never serious. They’re just taking Nigerians for a ride. It’s worse.”

The Guardian gathered that a major reason for the failure of the policy is rivalry among relevant ministries– Federal Ministry of Industry, Trade and Investment and Federal Ministry of Agriculture and Food Security.

“This is one major challenge we are facing on which ministry ought to do what. So, there is this rivalry between the two ministries, which has negatively impacted the progress of the policy.”

This was also confirmed by sources in the two ministries. A Deputy Director, Horticulture, Federal Ministry of Agriculture and Food Security, Mrs. Agbani Omotosho, who claimed that much had been done pertaining to the policy, said: “It is the Ministry of Industry, Trade and Investment that can say more on this. They see it as more of a trade thing, so, it was housed in the ministry, not even in the Federal Ministry of Agriculture and Food Security.

“We can say we are not too happy with the policy, but for them, from the meetings we have gotten, there are a lot of success stories on the policy. That’s what industry believes.

“So, our own side of the story may be one-way. I would rather you talk to maybe the agric person in charge of crop, or in charge of the quality development in Federal Ministry of Industry, Trade and Investment because for them, there’s a lot that has been going on. They believe it has fostered a lot of backward integration.

“They reduced the number of licenses that are given for importation of tomato pastes. We believe that some of the levies, why didn’t they cancel them? But they believed it has helped improve backward integration among those that have factories. For me, I’ll prefer you talk to the Ministry of Industry, Trade and Investment on the good side or the advantages. It will come from them and not us, because it’s for a purpose.

“They said that they reviewed it, but not with much input from us. I’m talking from what has happened at meetings. We are still saying that when we get this review, we don’t want the levies on the taxes to be silenced. We still want them very loud so that the agric levies can be in it, because right now, there’s no funding inside it. There is silence on the issue of levies and taxes.

“But for them, they believe that the people that were given waivers for concentrates have been reduced, because quite a number of these big companies are cutting backward integration.”

All efforts to get officials of the Ministry of Industry, Trade and Investment to speak on the progress of the policy and also react to the issue of rivalry did not succeed at press time. But it was gathered that some stakeholders on their own have taken further steps to ensure implementation of the policy. One of such steps was the National Tomato Technical Stakeholders Committee meeting convened last year in Abuja.

The objective of the meeting, jointly organised by HortiNigeriaProgramme and the National Horticultural Research Institute (NIHORT), was to identify current and enduring issues restraining progression in the tomato value chain, review the policies and initiatives hindering the competitiveness of the tomato value chain and provide solution options that will address these issues.

The participants, which included officials of the Ministry of Agric, farmer groups and researchers, unanimously agreed on the need to generate empirical data as evidence of the positive impact the 2017 tomato sector policy had or could have had so that it can be used to advocate favourable policies, particularly a revert to the initial agreement of 2017.

They also advocated the establishment of Agriculture Trust Fund; registration of more tomato products made locally in the international market; strong synergy among government agencies and other stakeholders in the implementation and review of policies; and creation of awareness, which should involve all stakeholders in policy formulations and review.

The recommendations also include policy document, which must be shared among all stakeholders up to the grassroots level, and establishment of platform to address the threats posed by emerging pest and diseases.

While all the participants agreed that the policy has the potential to grow the tomato value chain in Nigeria, policy somersault as reflected in poor implementation and weak monitoring remains a big concern.