A glimpse at the world of Agriculture.

A few weeks before Nigeria’s 60th anniversary, President Muhammadu Buhari directed that food and fertilizer importers should not be given access to foreign exchange by the Central Bank of Nigeria.

He added that the country would rather empower more local farmers, and use agriculture as a means to solve unemployment among youths.

“We have a lot of able-bodied young people willing to work, and agriculture is the answer,” he stated.

President Buhari’s comments should not come as a surprise to anyone, as he has focused heavily on agriculture and made it one of his main economic goals, even to the point of a border closure directive, that has lasted over a year now.

The most popular agriculture scheme is the Anchor Borrowers Programme launched by the CBN and the President in November 2015, as a means to merge the value chain gap between processing companies and smallholder farmers.

The scheme provides farmers with financing to increase production. The CBN said in 2018 that since the inception of the scheme, it had disbursed over N55.526 billion to over 250,000 farmers, who cultivated almost 300,000 hectares of farmland for rice, wheat, maize, cotton, soybeans, cassava, etc.

“Two years into the implementation, the programme has contributed to the creation of an estimated 890,000 direct and 2.6 million indirect jobs,” Godwin Emefiele, the CBN governor said.

This is a part of the President’s Home Grown Feeding Programme, which was implemented to end food importation into the country, or commodities that can be grown in the country.

Other agricultural policies by the President are the Presidential Fertilizer Initiative (PFI), Youth Farm Lab, Presidential Economic Diversification Initiative (PEDI), Food Security Council, and many others.

Agriculture vs other sectors

Buhari’s agriculture programmes have seen record growth of 1.58% in the recent GDP report, as Nigeria’s entire GDP contracted by -6.1%, due to the effect of the coronavirus pandemic on the economy.

Agriculture, however, is still lagging behind the Telecommunication sector, a sub-sector of the Information and Communication sector, which grew by 18.1%.

Past administrations’ neglect of Agriculture

It is obvious to see that unlike past Nigerian leaders, Buhari has taken agriculture serious, to the point of banning food imports (border closure). However, the border closure directive has caused Nigeria’s food inflation to spike to 16%, as imports were disrupted, which meant that the limited local supply was stretched thin.

Feyi Fawehinmi, co-author of  “Formation: The Making of Nigeria from Jihad to Amalgamation” says that the reasons for the neglect of other sectors during the crude oil boom era are a direct result of getting flushed with petrodollars.

“It’s one of the ways oil damages everything else. When faced with the choice of where to channel your energy based on the potential rewards, nothing can match oil and definitely not agriculture. But it’s easy to blame the government alone. Nigerians were also afflicted by the same problem. There’s a very old 1982 article which showed that in the late 70s, 40% of the senior agric researcher jobs advertised by the government were permanently vacant with no takers,” he says.

Joachim MacEbong, the Senior Analyst at socioeconomic research firm, SBM Intelligence, says that for Buhari, it’s more of old habits dying hard.

“He closed borders before as military Head of State. He has also talked about middlemen before, way back. Why now? He’s been going to great lengths to ‘protect the Naira’. He’s just defaulting to previous ideas.” MacEbong said.

Present Agriculture scorecard

According to Nairametrics Research, the last time the National Bureau of Statistics (NBS) released data on the number of Nigerians employed in the agriculture sector was Q3 2017, which showed that 32 million Nigerians were employed in the sector. The 2019 estimates of Agriculture places the percentage of total employment at 35.1%.

Affiong Williams, the founder of the food processing company, ReelFruits, told Nairametrics earlier stated that she did not think sending more Nigerians to the farms would increase productivity because “There is very little material productivity to achieve by increasing physical labour on the farms. Productivity increases in Agriculture, which moves the needle on production output, are more impacted by things like fertilizers, mechanization, and increased technical expertise. Manual labour is no match for any of those things.”

For exports, despite lagging behind our peers in the value of exports, Nigeria’s monthly exports earnings from agriculture have improved in the past 4 years. In January 2016, agricultural exports raked in N4.1 billion, according to Nairametrics Research, rising to N25 billion by January 2017 and maintaining its momentum to exports of N26 billion for January 2018. In one year (April 2019 – March 2020), total agriculture exports hit N289 billion for Nigeria’s top ten agriculture export products.

Agriculture exports for the first 6 months of 2020 were N204.45 billion, which is a sign that productivity is increasing in the sector to enable export growth.

However, the increased productivity does not replicate itself in the food inflation index, which could be a sign that Nigeria is not producing enough to meet local demands. Food inflation has grown significantly for the past 2 years, from a rate of 13.31% in September 2018 to 16% in August 2020. Nigeria’s increased food production and agriculture exports are not enough, as the gains of curbing imports are not being felt by the customer paying higher prices for food each month.

Strategies to refocus

Affiong Williams told Nairametrics last week that Nigeria’s over-reliance on smallholder farming might be the biggest hindrance by the government to improving Nigeria’s yields per hectare.

She added that even though the current model may be seen as a ‘development activity’ it barely achieved its true aim.

To improve the output of any crop, one needs to do a lot of testing and control for so many factors to be able to arrive at the right conditions, which increase productivity. Smallholder farmers do not have the resources to do this type of ‘A/B testing’ as it were, and so it is very difficult to get true information and disseminate the right techniques that all of these farmers can apply. I think the government needs to enable more commercial farming by the private sector who are able to acquire the resources to increase productivity and disseminate such learnings at a faster pace.” Williams said.

Joachim MacEbong says Nigeria cannot deal with the food inflation problem without food imports, as the local demand is just too high to be addressed by local supply.

“Firstly, Nigeria cannot arrest food inflation without imports. The local demand is too great,” he opined

He adds that local production is also disrupted by factors like proper storage and the farmer-herder clashes, leading to insecurity in the sector.

Saying, “Secondly, Nigeria’s agricultural productivity is hampered by several factors that need to be addressed in parallel. From seeds, irrigation to appropriate storage, adequate security to allow farming carry on peacefully, to good roads to ensure the products reach the market in good time. All these issues need to be addressed in order to boost productivity. Also, smallholder farming is not ideal. Increased productivity goes hand in hand with increased mechanisation. As only 3% of Nigeria’s farming is mechanized, one of the lowest in the world. Our average yields are also very low. Types of seeds as well as irrigation and access to fertiliser are all crucial.”

Economic possibilities for Nigeria’s Agriculture sector

MacEbong says the opportunities are many but value addition to the sector needs to be a focus, followed by compliance to export market standards.

“There are a lot of possibilities, but Nigeria needs to focus on value addition to agric products, as well as strict adherence to the standards of the export markets. EU, for example, is rather strict with their standards, so in order to cultivate that market, the standards have to be followed. Also, our exporting system is so cumbersome due to our bad ports. That must also change. Many exporters have had goods go bad because of that,” he says.

Bottomline

Nigeria’s agric production and exports have increased significantly, as there is more exposure in the sector under Buhari’s administration. However, to increase production enough for the local consumer, Nigeria needs fewer bodies in the sector and larger mechanised farms. Nigeria also needs to be open to import, in order to balance out the supply deficit and deal with an inflation problem, that has already hit a rate of 16% and is expected to rise further.

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1 Reply to “A glimpse at the world of Agriculture.”

  1. Otto Spender says:

    i like this perfect post

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