The Plantation Palm Owners Forum of Nigeria (POFON) has denounced the imposition of produce tax and levy on certain agricultural commodities by state governments, saying that the tax is antithetical to food security in the country.

National Chairman of the Forum, Mr. Emmanuel Ibru, stated this while speaking with newsmen shortly after the Forum’s meeting in Benin.

Ibru, who is also the Chief Executive Officer (CEO) of Aden River Estates Limited, an agro-industrial subsidiary of Ibru Organisation, averred that the imposition of produce tax on farmers would negatively affect food prices, especially palm oil in the Nigeria market.

He advised that instead of produce tax, governments across the country should provide an enabling environment for farmers to thrive by assisting them with easy access to land, inputs, and security to enable them to increase their production.

He noted that Nigeria, which is the highest producer of palm oil in Africa and 5th in the world, needs to increase its cultivation to about 500,000 hectares for it to meet the local needs and also become more efficient in production.

The POFON chairman added that for competitiveness in the international market, Nigeria needs to cultivate about one million hectares of oil palm urgently.

He said the one million hectares is a far cry from meeting up with what Indonesia and Malaysia are producing.
Ibru noted that imposition of produce tax by governments would amount to multiple taxations, as farmers and plantation owners are already paying other taxes such as income, land use taxes to state governments, among others.

While assuring that POFON is not against the payment of taxes by its members, he assured that members are ready to pay legal and fairer friendly taxes levied by any state government.

Ibru, who added that investing in oil palm plantation required patience and also capital intensive, further decried the multiple taxations imposed on agricultural investors by governments.

He averred that if the issue of the multiple taxations is not given the needed attention, it might undermine the achievement of low and stable prices of the red cooking oil and its by-products in the country.

He posited that the producers may be compelled to pass the cost to the consumers, which is one of the factors that have contributed to the increase in the prices of palm oil products in the market.

“The government has to look into the issue of multiple taxation. We are battling with a lot of problems such as the high cost of inputs like fertilizers, labour, mechanisation, and security. So all these are hindrances to us to be able to expand as rapidly as we would like to.

“For instance, a situation whereby off-takers are moving its products from Edo State to Lagos State, they are most likely to be made to pay produce tax in all the states in-between and the destination state, thus increasing the final market price of the commodity.

“Government need to support food production, and for oil palm which is a crop of long gestation period, the support should include long-term financing at a very low interest rate. It is not only the large-scale plantation owners that require support, small and medium-scale farmers, and the research institutions also require support.

“So, in all, governments have to cooperate and work with the various stakeholders to enable us to achieve what we want to achieve and our goals,” he stated.

Ibru also assured that POFON would continue to play advocacy and intermediary roles to make sure that both its members and government can come together to resolve their different positions relating to the produce tax.

“So, our view is that as POFON it is our duty to ensure that the positive relationship between us and the government continues to be nurtured and maintained going forward,” he added.