Poor financing, insecurity mar agric in Buhari’s tenure
• Farmers commend border closure, CBN interventions
Agriculture, health, education and security sectors, among others, have suffered degrees of neglect while the country concentrates on the economy of crude petroleum. The oil and gas sector is terribly affected by corruption, incompetence and inability to emplace enabling legislative framework for the sector. Hence, FEMI IBIROGBA, Head, Agro-Economy, examines successes and failures of the Muhammadu Buhari administration in agriculture in the last one year.
Since political independence in 1960, Nigeria has consistently neglected agriculture. The country has been claiming efforts and allocating resources to diversifying the economy, but in reality, each leadership has always focused on revenue from crude petroleum. And the economy has grown, not developed, around petroleum revenue.
Crude oil exports have consistently accounted for over 50 per cent of the national revenue, but the drastic crash in the international price of crude oil and consequences of locking down the economy to contain the spread of COVID-19 have brought Nigeria’s failure to prepare for the rainy days, when there was sunshine, to the fore.
Unstructured intermittent funding interventions, policies
Infusion of targeted funds, lowering of interest and moratorium extension of intervention credit facilities by the Federal Government through the Central Bank of Nigeria (CBN), though described by many critics as tokenism and unstructured intermittent interventions, have been described as moves in the right direction by some stakeholders.
On March 16, in a circular to the money deposit banks and the public, the apex bank announced that “All CBN intervention facilities are hereby granted a further moratorium of one year on all principal repayments, effective March 1, 2020. This means that any intervention loan currently under moratorium is granted an additional period of one year.”
The bank also reduced the interest rate, indicating that “Interest rates on all CBN intervention facilities are hereby reduced from 9 to 5 per cent yearly for one year, effective March 1, 2020.”
The third intervention is the creation of an N50 billion targeted credit facility for households and small and medium-sized enterprises, including the agro-allied industries.
However, critics claim that the country needs more than tokenism called special interventions by the apex bank.
Border closure against smuggling
In the last one year, another seemingly good policy appears to be the closure of land borders. Farmers, especially those producing rice and poultry meat, have commended the closure, appreciating a huge market opportunity presented to feed Nigerians with locally-produced foods while getting value for their investments and labour.
Prof. Bamidele Omitoyin, a former Dean of the Faculty of Renewable Natural Resources, University of Ibadan, while analyzing the policies and programmes of the government within the period under review, said though thereTop of FormBottom of FormTop of FormBottom of Form has been little improvement in the agricultural sector, pointed out that “the closure of borders helps many farmers to sell their products at fairly competitive prices, particularly poultry and rice.”
He admitted that though the government had made a lot of efforts in terms of resources invested in the sector through the CBN, particularly the Anchor Borrowers’ scheme, with 9% interest rate, the outcome is a far cry from the resources given out to the farmers.
Prof. Omitoyin said, “This interest rate is still too high. Interest rate for money borrowed for agriculture and aquaculture should not be more than three to four per cent. Other major problem still remains access to finance at the right time and market access for the farmers’ produce at reasonable prices.”
The covid-19 outbreak, he added, has pushed up prices of some farm produce such as cassava, maize and turmeric, but the government would have to do more in terms of policy that would favour agribusiness as a major economic driver to prevent hunger post-COVID-19.
Specifically, he said infrastructure to rural areas where farming activities take place is still very poor, and access to farm machinery for commercial agriculture is still very expensive or non-existent in some localities.
For instance, he said, “To plough, one hectare of land is about N13,750 – 17,500. Access to quality seeds and other inputs are still major issues, while productivity in term of yield per hectare is very low and labour is too expensive for farm operations.”
The purchasing power of the people is also very low and getting lower, Omitoyin said, making it difficult for most Nigerians to buy farm produce at reasonable prices, and post-harvest loss is still high because very few companies are involved in value addition. He recommended that “All the value chains need to be strengthened at every node.”
Comatose Bank of Agriculture
Inability of the government to restructure Bank of Agriculture (BOA) for coordinated, structured and country-wide sustainable medium to long-term agricultural credit facilities and other transactions, despite the current government’s plan to do so, has incapacitated agricultural financing significantly.
The plan is to make farmers have over 40 per cent shares of the bank while the government (CBN) and the public would hold the remaining shares, managed strictly as a private sector institution for efficiency.
The only change in the bank was an appointment of Alwan Hassan as new acting Managing Director of the bank as disclosed in a letter sent to the Minister of Agriculture and Rural Development, Sabo Nanono, dated May 5, 2020.
“Commercial banks with structures and funds are not really interested in agricultural financing except interventions and de-risked facilities in off-taking arrangements,” a farm financial manager with an old generation bank who prefers anonymity told The Guardian.
Meanwhile, it has been established that treating agriculture as a way of life has failed to guarantee food sufficiency and security. The paradigm shift, agro-economic scientists have proven, is doing agriculture as a business with improved inputs, good management practices, mechanisation and value chain development for post-harvest management and better value creation. Without adequate financing, however, treating agriculture as a business is impracticable.
Adducing reasons agriculture has fared badly, Mr John-Bede Antonio, an agro-produce exporter based in Lagos, said in the last one year, there has been a loss of momentum in the agricultural sector with several distractions.
“The Fulani herdsmen constitute a major distraction and big disincentive to agriculture everywhere. The elections and change of guards in the ministry, border closure issues in the southwest only and smugglers coming in through northern states, non-existence of the Bank of Agriculture are difficulties in the sector,” he said.
Some positive developments, Anthonio added, include the increase in rice production, “which is not sustainable and may collapse by 2022. NIRSAL and CBN are pushing hard with some initiatives, but Nigerians are waiting to see the results.”
He added, “Overall, I give the government 45 per cent because the political, technical and financial capacity is not available. The results show that we cannot feed ourselves because we are majoring in minor issues and minoring on majors.”
Paltry funds allocation and poor budget implementation, as well as grossly inadequate credit facilities in the sector, are counter-productive to the spirit and intent of the Maputo and Malabo declarations on agriculture, which stipulate a minimum of 10 per cent of the yearly budget of each of the African countries to the agro-allied sector.
However, while expressing a contrary view, Prof. Lateef Sanni, ex-Deputy Vice-Chancellor, Federal University of Agriculture, Abeokuta (FUNAAB), said the agricultural sector achieved growth in the production of some commodities, especially rice, due to border closure and forest restriction against food-related importation.
He also identified more specialised financing and interventions through the government’s Anchor Borrowers’ programme as good steps, saying, “the commercial banks are also working with the CBN.”
However, Prof. Sanni admitted that there is little or total neglect of the development of post-harvest sectors, saying, “We need to reduce post-harvest losses of tomato, mango, oranges and other root crops.”
Pitching tents with Anthonio, he particularly said on-farm insecurity has been a major cause of losses of lives, crops, displacement of individuals and community, and resultant threats to job and food security.
“We need to integrate and harmonise agricultural interventions by inter-governmental agencies. Donor-driven agricultural projects should align with the private sector for maximum impact. COVID-19 is challenging us to ramp up more production, processing and marketing of immune-boosting agricultural crops and foods.
“This is the time for timely funding to our citadel of knowledge to set up food-based fortified value-added products using a combination of ginger, Tumeric, zobo, cocoa, orange-flesh sweet potato, yellow cassava and so on,” Sanni said.
He added that the foregoing would ensure consistent raw material supply for industries adding value to crops and that deepening industrialisation of crops would make them very export-driven, which could also boost businesses of local agro-allied fabricators who are able to manufacture small to medium-sized processing machinery.
“They need government support. Finally, the government should consider a three-year tax holiday to fabricators, processors and food investors in Nigeria,” he suggested.
Weak agric ministry, poor policy implementation, incompetence
The factional president of the All Farmers Association of Nigeria (AFAN), Mr Ibrahim Kabir, disclosed to The Guardian that the sector has performed abysmally low in the last one year due to incompetence, inexperience and inability to utilise good advice or professionals in the public administration of the sector.
“To candidly answer your question, I must say that in the last nine months since the current Minister of Agriculture assumed duty, we have not seen any achievement. The rhetoric about mechanisation through the loan-in-kind from Brazil is yet to materialise. So also is the training of 50,000 extension agents,” Kabir said.
The Livestock Transformation Plan, the AFAN president added, has been slowed down by lack of focus and coordination, adding that “The minister does not seem to have any specific schedule. So, he is not visible. The HMA is yet to unveil a new National Agricultural Policy after several meetings of the committee to fashion an implementation strategy he inaugurated some time ago.
“The results of a Seed Fund Retreat held in Zaria is still not out. On the whole, the performance of the ministry has been very poor. He, unfortunately, did some rural development projects in Kano, which are not given publicity because they are surrounded by nepotism and lack of national focus. The agricultural sector in Nigeria has fared badly in the past year conclusively, unfortunately,” he said.
In the same vein, Prof. Damian Chikwendu, Team Lead, Cultivating New Frontiers in Agriculture (CNFA), while assessing the sector, said: “crop production last season was generally good.”
However, supporting Prof. Sanni’s point on post-harvest losses, Prof. Chikwendu said the extended rainfalls into October made it difficult for farmers to harvest and dry their grains properly. In some cases, this led to the destruction of some of the crops and growth of moulds on the grains, thereby creating a good environment for contaminants like aflatoxin and fumonisins to thrive, he added.
“We should not produce considering only the quantity. We should also consider the quality of what we produce, as what we consume has a direct impact on our health status. In this regard, farmers require good facilities that can dry their produce even when rain is still falling,” he advised.
Shortage of farm labour
Uncoordinated activities and policy summersaults in the agricultural sector have caused poor industrialisation of crops, and low demand for primary produce. These, in turn, have worsened post-harvest losses, caused little or no profitability and the inability of farmers to sustain crop production, as well as discouragement of millions of youths to participate in the agro-allied businesses. This is compounded by commercialisation of motorcycles, which has engaged a larger number of younger people who could be useful in agricultural production.
The crises of a shortage of farm labour and disinterestedness in agriculture are further compounded by consequences of the lockdown employed as a measure to stem the spread of COVID-19. The Food and Agriculture Organisation (FAO) has projected that the impact of COVID-19 on the sector would reach its peak in April and May 2020.
According to the UN agency, lockdowns across the world would take a toll on food production, agricultural supply chains, and markets, leading to a global food crisis. This has manifested in the inability of poultry, fish and crop farmers to supply products to urban centres, hotels, eateries and other small-scale businesses that off-take such products because they remain closed. And, this is aggravated by the government’s inability to offtake products for the national strategic grain reserves as an N48 billion fraud allegation recently rocked the Federal Ministry of Agriculture.
Analysts say this could lead to erosion of farm capital, inability to sustain farm operations and food crisis for the country in particular and Africa in general.