NI-SCOPS: Coalition To Revive Moribund Palm Oil Industry

Palm Oil production has gained prominence in the international market in recent time, due to increased demand as raw material for biodiesel and strict policies on trans-fat foodstuffs in Europe and the U.S.

Despite this, Nigeria is yet to tap into this opportunity, due to several challenges.

Currently, the country relies on importation of palm kernel and allied palm products to meet domestic demand, a development considered as a threat to the Federal Government’s economic diversification campaign.

The country, which was the largest producer of palm oil in the world in the early 1950s, accounting for 40 per cent of the global output, now has a world share of 1.57 per cent, with Indonesia leading by 33 million mt; Malaysia, 19.8 million mt; Thailand, two million mt; Colombia, 1.108million mt; and Nigeria, a meager 970,000 mt.

Last Tuesday, the Senate called on the Federal Government to support improved production of palm oil to meet domestic needs and for export.

The call, which came on the heels of a motion titled: “Urgent need to revive the Palm Oil industry in Nigeria,” sponsored by Senator Francis Onyewuchi (PDP, Imo East) and co-sponsored by 15 other senators, stressed the need for improved palm oil production in order to meet the domestic needs of the market, as well as revive the moribund Nigerian Institute for Oil Palm Research (NIFOR) in Benin, Edo State.

Onyewuchi said: “Nigeria spends $500 million on oil palm importation yearly, despite being the largest producer and exporter of the product in the ’50s and ’60s. The country is now the net importer of palm oil, importing 400,000 -600,000 mt of palm oil to meet local demand.”

According to reports, Nigeria imported 450,000 tons of palm oil costing about N116.3b in the year 2017 alone.

For that year, while the country’s domestic production stood at 970,000mt, demand was 2.7million tons, leaving a deficit of 1.73million mt.

Some of the identified constraints to the development of the industry include- lack of access to timely, sufficient and good quality inputs and climate smart technologies; inadequate institutional, marketing and financial support mechanism; low level of commercialisation and the implication of oil palm production in the destruction and fragmentation of rain forests.

To address these challenges, the Sustainable Trade Initiative (IDH) and the Solidaridad West Africa (SWA), with funding from the Netherlands Government, have initiated a program- the Sustainable Climate-Smart Oil Palm Smallholders (NI-SCOPS), Nigeria, aimed at contributing to the sustainable development and growth of global oil palm economy.

NI-SCOPS is focusing on Nigeria, Ghana, Indonesia, and Malaysia, which are four major palm oil-producing countries.

The initiative seeks to improve the livelihood of smallholder oil palm farmers through increased income; increased quality and quantity of oil palm production towards the attainment of national self-sufficiency; and reduction of deforestation for the promotion of sustainable and climate-smart practices at the landscape level.

At this inception year, the program will create a multi-stakeholder framework to harness collective ideas and strengths to develop the test, validate and scale-up sustainable and climate-smart oil palm production practices that deliver benefits to value chain actors and preserve the ecosystem.

At the program launch in Lagos, the Senior Program Manager, IDH, Chris Okafor, said the program is focusing on how to build the sector, which has been abandoned for some years. “Our partners, Solidaridad is working with Cross River, Enugu, Kogi, and Akwa Ibom States, but we are starting with Ondo and Edo States. The programme is looking at how we can grow the sector without destroying the environment and making sure that smallholder farmers are not left out

“For us, we are starting with oil palm and obviously with time we’ll touch other commodities. The landscape approach is also looking at protecting the environment, making sure that crops that are growing in the landscape are done in a protective manner without destroying the environment and the farmers are getting enough money to improve their livelihoods. That is why the landscape approach is very critical.

“The Edo and Ondo are pilot states, we are going to develop the two systems there, we are going to bring together various stakeholders and agree on the intervention that will improve the livelihood of actors, not only the farmers but those who are taking-off what they are producing (the off-takers).

“And it is possible that you have a big company that needs the input of those farmers, we’ll develop what we call a sustainable delivery mechanism that will include giving those farmers training to produce and also have access to inputs, access to finance and also help those companies that may want to engage banking sector to provide long term loan, we’ll help them to de-risk investment in agriculture.”

IDH’s Program Director Global Landscapes, Palm Oil, Soy & Timber, Daan Wensing said the initiative is built on the works of IDH in the country for the past eight years, supporting smallholder farmers to increase their yields, to increase their incomes and support their families.

He said the IDH is taking the lessons learned in the country to the oil palm product as well, noting that the initiative will give farmers in both states leverage, in terms of access to finance, access to good varieties to increase the yields and quality of palm oil produced, access to buyers.

“It will also help to build production and exporting. It will also boost the ambition of the Federal Government to be sustainable in palm oil.”

Program Manager, Oil Palm, Nigeria Solidaridad West Africa, Kene Onukwube, who revealed that it has touched 1,788 smallholder farmers across states participating in its program, said NI-SCOPS would create a database of all stakeholders in the industry.

He added that aside from starting baseline studies, it would give consideration to gender and participation of vulnerable persons in the sector.

Netherlands Consul General, Jan Van Neijen, who described Nigeria as the super-power of agriculture in Africa said with the partnership with the Dutch government, considered as the super-power of Agric in the world, the two super-powers could make something happen to transform the palm oil industry in the world.

Boki Ahmed, who represented the Minister of Industry, Trade and Investment said the Federal Government is concerned about reviving the industry, noting that it has thrown its full weight behind the initiative.

Governors of the two pilot states were fully represented during the launch.