Why Malaysia overtakes Nigeria in oil palm production, by NIFOR’s boss  

FEMI IBIROGBA, Head, Agro-Economy, spoke with Dr. Celestine Ikuenobe, Executive Director of the Nigerian Institute for Oil Palm Research (NIFOR) in Benin City. He said more deliberate investments, easier access to land and cheaper capital have made Malaysia overtake Nigeria in the oil palm sector, suggesting ways the industry could be repositioned for energised economy. Excerpts:  

There is an impression that Malaysia took palm oil seedlings from Nigeria and now it has become the largest oil palm producer. How correct is this view?
All kinds of opinions are circulating around. Some of them are wrong, some of them are right, while some of them are distorted facts. The fact is that the Malaysian oil industry started between 1911 and 1917. NIFOR was established in 1939. But research in oil palm in Nigeria started in 1912 in Old Calabar plots, and improved materials were eventually planted in different parts in southern Nigeria – in Ibadan, Abba, Ogba area, Benin City here and other areas. But eventually, understanding that Nigeria had to compete favorably in the oil palm industry globally, the colonial government, between 1927 and 1938, decided to establish an oil palm research in Nigeria and that gave to the birth to NIFOR in 1939, first as the oil palm research station of Nigerian Department of Agriculture.

So, research was going on. But again, we had a very fine collection of gene plasm, that is the oil palm planting material which the world liked and in Malaysia and Indonesia, the gene plasm was very narrow and so they needed to expand the gen plasm and they decided to exchange materials around 1945 with the Malaysians. And eventually, by the 1960s, Nigeria led the world. Most of the palm oil then came from the wild groves. They were not planted because we had a natural grove of oil palm. 

The oil palm is native to West Africa and is endemic to Nigeria. Eventually, the Malaysians understood that they had to have a West Africa gen plasm and since NIFOR then or WIFOR then had established gen plasm, globally known gen plasms, they had to come and then we exchanged materials.

Meaning that they actually took samples from here? 
They took but that wasn’t the first one they took. They started with the industry before. But we exchanged materials, that is, we exchanged germplasm and by 1960 and mostly 1970s.

The most important thing Nigerians are complaining about is that we have remained at the same level, but they have become industrialised and the largest producer?
Yes. That is the point I am coming to. In Nigeria at that time, much of the oil came from the wild groves, the business people were already doing even before the colonial government. You know, palm oil was the first commodity of exchange after the slave trade….

So, why are we not growing? 
Palm oil was the first commodity after the slave trade. But again, we did not grow because people were just doing it as a personal business and after the civil war, we did not expand. But the Malaysians had a strategic plan in 1956 to expand the industry and because they had the land, they started expanding. They had the expansion, but we were not expanding. We were relying mostly on the wild groves and then don’t also forget that in Nigeria, we have land tenure problem but there, they don’t have that. 
 
Malaysians are doing it as a business with big corporations. Big corporations require land. In Nigeria, it is difficult for big corporations to acquire land. In Malaysia, 18,00 hectares are like a small-holding farm business. In Nigeria, was small businesses that run oil palm. It is only now that big corporations are trying to do it.

So, what can Nigeria do to scale up production? 
In Malaysia today, they have over six million hectares under improved oil palm planting and Nigeria is about 600,000 hectares. You cannot compare. It’s not because they came to collect the first seed, but because they have been doing it as a business, expanding and developing the entire value chains. 
 
Power Oil and Kings Oil that you see, for instance, are bleached products from the value chain development and industrial utilisation. So, that is why Malaysian oil palm is developed because there were deliberate investments in the industry’s value chains. 
 
In Nigeria, there has been no deliberate investment. So, for us to get there, we have to have deliberate investments, provide easy access to land and have access to capital. Now, capital is very expensive in Nigeria.

The Central Bank of Nigeria (CBN) talked about the policy on palm oil investments. What roles are you playing in that policy to make it a business and expand operations?
The role we are playing is that, naturally, we supply the seeds for the industry. To provide planting materials is our own part of the value chain. We are to improvise technologies, train farmers and train producers. We have always been positioned enough to play those roles very well.

What is the best variety of palm oil that you have for farmers now?
Tenera variety is the best for now. That is the general variety. That’s what is planted all over the world. People call it different names. But our materials do very well. In fact, we can guarantee that by 27 months after planting, you can get very good harvests.
Does a farmer start harvests after 27 months?

Yes. They start production. If you do good economic practices, under good rainfall conditions, you can get anything from 20 to 35 metric tonnes of fruits in a year per hectare, and that is anywhere in the world. So, we are looking for people to plant the right materials. People should stop planting fake seeds and seedlings. So, one of the problems we have.

So, are you optimistic that the CBN policy on oil palm will fly and help boost the economy?
It is not a one-stop policy. Policies have to keep revolving. And over time, don’t forget that palm oil is not a one-day investment. It’s a lifetime investment. If you plant a palm tree today, it takes 20 to 30 years. And that’s a generation. 
 
So, that is what we think. For us, we are confident that we, can as a country, get there if we have the right policy. First, to be able to meet the local demand, and also, to drive it as a business. And then also to have our own local entrepreneurs who want to grow the business. Big corporations are foreigners. 

So we should encourage many more local players?
Yes. More local players. There are more local people who will go into it as a big business. 

What do you advise state governors to do because they have landed at their disposal?
Governors don’t really have land because the communities still have the land anyway. Though the land is a place that state government holds in trust, you find that access to the land is an issue. 
 
What is your advice to farmers? Should they consider oil palm plantations?
Yes. Even people like you can be planting palm towards your retirement. So, if you start to plant one or two hectares now, that adds to the total volume in the country. So, we should not even wait to be big corporations. You can plant 10 trees and you will earn money from it. You can plant 3 million trees and 3 million hectares. However, in understanding that in Nigeria, we have issues with land, it means a model for small-scale players to grow oil palm and sell to the big corporations is acceptable. That is what can utilise where land becomes an issue.