Changing production dynamics will solve food, job challenges, says Dangote
Devakumar Edwin is the Group Executive Director, Strategy, Capital Projects and Portfolio Development of Dangote Industries Limited, with over 29 years of industrial experience in Nigeria. He speaks on why the company diversified into fertiliser production, how good inputs will multiply farmers’ productivity and income, and how sustainable farming and agribusinesses would drive industrialisation, create more job opportunities and ensure food security. Head, Aggro-Economy, FEMI IBIROGBA reports.
‘Nigeria, Brazil should feed the world’
FAO data said as of 2016, fertiliser use per hectare of land in Nigeria was 5.5kg per hectare. Now, small-scale farmers who are resource-poor are in the majority. How do you intend to drive the application of fertiliser among farmers as you are coming big into the sector?
A couple of years back, we had the Abuja Convention where it was agreed that we should work to at least 50kgs per hectare. And I think Ethiopia is coming closer to the target. But Nigeria is one of the countries with the lowest. And, what we realised this before we started was working with the farmers. We had a lot of dialogues with them and we understood some of the challenges. For example, we are trying to drive towards food security. So, the food security that the government focuses on is helpful today that we have foreign exchange problems. The country cannot be importing all its rice need, wheat, sugar, and so you need to have a sustainable strategy for food security in the country. And Nigeria has one of the highly rich fertile lands.
Brazil and sub-Saharan Africa are to be the food baskets of the world. These are the parts of the world having a lot of water, and good arable lands. But then, farming has been neglected. I came to Nigeria, and everybody abandoned farming. How many farmers are in business today? The real issue is that farming has become unsustainable.
Nigerians do businesses and are very resourceful not only in Nigeria, but in every part of the world. So, the reason why they abandoned farming was that they found it not sustainable. So, when we decided to go into this, we started focusing on specifics and also on rice. The climate is suitable to growing paddies. But we realised that if we developed their production capacity, there were no mills for the paddies. So, a lot of paddies would get disposed. So, we started working on the mill and with the farmers and we found that they hardly got two and a half to three tonnes of paddies per hectare. And there was no way a farmer can make money on that. So, we decided to bring high yielding varieties from Brazil and distributed them to farmers, with an agreement that we would give them seeds, fertiliser, pesticides and buy back their products. So, the farmer has an assured market, inputs, and we did our part by buying back the product. The Brazilian variety yielded six tonnes per hectare. So, farmers’ income doubled. Now, they are happy and realise that they can make money in rice cultivation.
We went back to them in the Middle Belt of Nigeria, where the rainy season is structured to have two crops. So, they get six tonnes per hectare now tow times in a year. They get four times the volume of what they were getting before the new variety came. Now, their family can live comfortably. They can educate their children. They can take care of their medical bills and also have savings. So, if you want people to go into farming, make the business attractive, otherwise, the guys will just abandon it.
This affected the textile industry. The textile industry was the largest employer after the government. So, Nigeria has rich soil, water and what is the problem we have? We are looking at a way farmers can go for third cycle of rice in a year. Other countries do it. India does three crops in a year. So, when farmers see that some people make money from where they have abandoned, they will come back.
We are working with the youths the same way we are working with the farmers to assist them.
With your emphasis on demand-driven production with assistance of inputs, that is applicable to rice, not all crops, how do you capture farmers who have no anchors or industries to buy back their produce to use fertiliser and improved varieties?
We have developed seeds that can yield more than 10 tonnes. So, once farming activities increase, automatically, the use of fertiliser will increase. Number two, we taught them how to apply fertiliser. As we are starting the fertiliser company, what we plan to do is setting up mobile laboratories. So, we are going to work with farmers to test their soil, to determine the micronutrient deficiency in the soil. So, we will give them fertiliser with micro-nutrients they need, which Ethiopia did and they have got the big benefit. Their farmers’ yield has increased and obviously the fertiliser use has increased because they are buying micronutrients they need in the fertiliser. So, that is the first focus of the fertiliser plant.
We are also setting up a fixed laboratory to work with farmers’ associations on their needs and we will educate them.
Coming back to the other aspects, we have seen some countries exactly like Nigeria where they were totally dependent on food import transformed into producers of food. We are starting the revolution by educating the farmer, which is what we have done in rice. We want to do the same thing with other crops. We are already bringing some of the farmers to our modern farms in Katsina to see what we are doing and how we do it. We want to train the farmers through the radio, television and other media.
So, we will train them how we are producing crops, times and how to apply fertiliser, the quantity to use and other agronomical practices. Sometimes, farmers use fertiliser more than they need. So, first of all, we want to test the soil. Number two, we will educate the farmers on what to do.
With major competitors like Notore and Indorama, what differentiates your fertiliser? Are you making it cost-effective for farmers?
There are two primary manufacturers today. One is Notore and the other is Indorama. Their capacity is also low. In your question, 5.5kgs of fertiliser is used per hectare. And if we go by the Abuja Convention to increase usage to 50kg per hectare, that is more than times eight. That means we can saturate the market with fertiliser. So, the opportunities are there. We have seen it in cement. Today, a lot of fertiliser is still imported, and it does not come at the right time and is not distributed well. So, establish the capacity, do the distribution very well, reach out to farmers, educate them, train them, and they will use it. This is what we have done in cement, where we have set up complete different models to work with block moulders. The primary consumption is driven by the block-making industry. We set up the means of working with block makers. We work with them, train them, and today, we have almost 60 per cent of the market.
Affordability has prevented most farmers from using good inputs …?
I have a Chemical Engineering graduate who was driving somebody and paid N30,000. What could he afford? Now I have given him employment here and because he holds a master’s degree, he started as a senior engineer. And his income has increased about eight times. He has a medical benefit, a pension fund, and other benefits. He is earning much more, and so his lifestyle has changed. He can afford things he could not afford before. Same as farmers’ income. If he grows with good yields, the farmer can afford more and perform better.
What is the yearly capacity of the plant, and what would be the economic impacts?
The capacity of the plant is 3 million metric tonnes yearly and our primary focus is meeting home demand, but there is export potential. So, we have an advantage of quality products. Our primary interest is to saturate the local market. Training farmers will help to sustain farming activities, and this will ensure food security. Number two, a lot of food is still imported into the country. Rice import has come down, to a large extent, but a lot is still smuggled into the country. So, if we change the dynamics, the country will solve a lot of problems. The country will get a lot of people employed, because farming activities will keep a lot of people sustainably engaged.
Now that we are into fertiliser, some people would say why are we still importing pesticides? Why should we import tractors? At least a tractor assembly plant will help. Somebody would say, let me open a tractor assembly plant. And then, from assembly plant, somebody would say he would manufacture spare parts and he would expand the supply chains by manufacturing parts. So, the potential for expansion of businesses is huge, employment potential is phenomenal, and we will have a lot of economic benefits.
Is there any partnership with international and local research institutes on improved varieties of seeds?
If there is a wheel, why must we reinvent the wheel? Since there are centres that focus on improved seeds and planting materials, it does not make sense to start our own. We will always work with them to understand what they have done, and will join them so that farmers can enjoy the varieties. We brought improved seeds from Brazil.
As you rightly mentioned, if you have the right type of seeds, we will do well, because a seed that is successful in one country may not in another. Climatic conditions differ; water available also differ. That is why our focus is on internally sourced resources and varieties.
When is the fertiliser plant likely to commence operations?
Actually, the plant is mechanically completed. The power plant for train one and two is being commissioned. The ammonia section is getting commissioned this month. God willing, this month, we will produce ammonia and train two will be ready in about 30 days. So, before the end of next month, the products should reach the farmers.
On human capital development of host communities?
At the Lagos Refinery site, we realise most of the communities are into fishing. We are procuring fishing boats for them. We are training women in fashion and assisting them with sewing machines. What we did at Obajana was that we gathered the women, trained them in fashion, for example, and gave them machines. So, all staff uniforms are given to them. So, they have a kind of assured business. This is how we maintain good relationship with them. We identify their problems. We realise that relating with chiefs of the community, people still complained that they were neglected. We now start to consult with women wings, youth wings and we understand their needs and step in.