Positioning agric to drive economic growth
Nigeria is set to curb imports in the face of declining revenue from oil. The agriculture sector looks good to dislodge oil as a major revenue earner and, ultimately, contribute to economic growth and development. However, with various operators in the agric sector facing hard times due to heightened risks from the COVID-19 pandemic and its emerging variants, as well as soaring inflation, experts and stakeholders are canvassing the need to strengthen the nation’s food system to position agric to drive economic recovery. DANIEL ESSIET reports.
At its launch in Maputo, Mozambique in 2003, the Comprehensive Africa Agriculture Development Programme (CAADP), which is Africa’s policy framework for agricultural transformation, proposed that African countries, including Nigeria, allocate 10 per cent of their total yearly budgets to boost agricultural productivity.
However, almost two decades after the proposal, Nigeria, Africa’s largest and most populous economy and one of the 13 countries that signed the CAADP compact, failed to implement the policy. Rather, it allocates mere two per cent of her yearly budget to agriculture. In other words, its public expenditures in agriculture are evidently far below the CAADP target of 10 per cent of total budget.
For instance, Nigeria’s budgetary allocation to agriculture rose from 1.70 per cent in 2017 to two per cent in 2018. It fell to 1.56 per cent in 2019 and 1.34 per cent in 2020, before recording a slight increase (1.37 per cent) in 2021.
Nigeria’s low budgetary allocation to agriculture is one of the reasons the sector has not recorded huge progress when measured against the African Union’s (AU’s) African Agricultural Transformation Scorecard (AATS).
Unveiled on January 30, 2018, in Addis Ababa, Ethiopia, the AATS, the first of its kind in Africa, captures the continent’s agricultural progress based on a pan-African data collection led by the AU’s Commission’s Department of Rural Economy and Agriculture (DREA), NEPAD Agency and Regional Economic Communities.
A revolutionary new tool to drive agricultural productivity and development, the AATS tracks progress in commitments made by AU Heads of State and Government through CAADP and the Malabo Declaration to increase prosperity and improved livelihoods for transforming agriculture.
It is against this backdrop that concerned stakeholders and experts in the agric sector have, therefore, called not only for an increase in funding allocated to the sector, but also improvements in the effectiveness of agricultural spending.
Although Nigeria, partly because of her meagre budgetary allocation to agriculture, failed to record massive progress in agriculture, based on the scorecard, low budgetary allocation is only a fraction of issues holding the sector down and undermining its capacity to play its critical role of galvanising Nigeria’s economic recovery and sustainable development.
Grain storage has also been identified as a big issue for farmers. For instance, a survey by SBM Intel, a research and strategic communications consulting firm, indicated that about 47 per cent of Nigerian farmers have no access to post-harvest storage facilities.
The survey said inadequate storage facilities could lead to post-harvest losses for the farmers that might not be able to arrest the situation by acquiring their own storage facilities. “The lack of storage facilities contributes to post-harvest losses, which could get as high as 60 per cent for tubers, fruits and vegetables,” the survey said.
Perhaps, to underscore the seriousness of the problem of inadequate storage facilities, statistics cited by The Nation showed that inadequate storage and processing facilities and the accompanying wastages in the tomato value chain alone is costing the country’s economy about $15 billion in Post-Harvest Loses (PHL) yearly.
Nigeria also lacks a pragmatic approach to addressing farm productivity through the supply of improved seeds and fertiliser at subsidised prices, as well as infrastructure investment in agriculture sector assets. Changing this narrative and strategically strengthening rural-urban linkages to enhance market and value chain opportunities, stakeholders say, are imperative.
They pointed out that another major factor that has been hurting the sector is insecurity, which seems to have spiralled out of control in many parts of the country, depriving farmers’ access to their farms and sending food prices soaring.
Indeed, insecurity has worsened in recent times and policy measures have been ineffective in curbing rising food prices, which pushed food inflation to its peak in 15 years. Farmers have been suffering colossal losses as a result of insecurity.
Similarly, recent studies show that agriculture still suffers from a lack of physical and virtual agricultural infrastructure, low labour productivity, a lack of technical equipment, high rental costs, high production costs, uncertainty, challenges in accessing financing, and a lack of effective leadership.
For instance, in most areas of the North, farmers are in need of support to reduce production costs, build irrigation infrastructure, prevent pest damage, build farms that are resilient to climate change, and ensure high yields.
On the whole, Nigeria has not shown noticeable progress with regard to agricultural mechanisation. So far, the sector has not recorded more than an average agricultural machinery growth rate of five per cent.
According to analysts, this is because there hasn’t been strong institutional and programmatic commitment to enhance mechanisation. The extent of public-private partnerships in the mechanisation of food value chains is still low, and more needs to be done to meet continental and international targets on agricultural transformation.
The Chief Executive Officer, Centre for the Promotion of Private Enterprises, Dr. Muda Yusuf, said Nigeria must invest in mechanised farming.
He lamented that Nigeria with a population of about 200 million is still depending on hoes and cutlasses to meet its food demands.
Yusuf said: “The projections for the sector in 2022 are not too good given all these challenges that the sector is facing. There is the problem of insecurity and there is also nothing on the horizon to show that the issue will be addressed anytime soon, even as the problem seems to be getting worse.
“If we do not fix security, how are we going to get people farming and if people are not farming, how do they produce and if they are not producing, how will the price come down? So, from the point of insecurity and logistics, inadequate application of technology to agriculture, the problems are still there.”
As a result, analysts have charged the Federal Ministry of Agriculture and Rural Development to prioritise value addition through mechanisation and infrastructure development, which are central to attaining the vision of a stable and prosperous food sector.
This is so because studies have shown that Nigeria remains vulnerable to food insecurity and is unable to meet domestic demand. This is explained by low levels of irrigation and an outdated land tenure system which have kept agricultural productivity low and caused PHL.
Water is another issue. The consensus is that if there is one intervention by the government that will address agriculture distress, it is making water available for irrigation. Innocent Mokidi, an agro entrepreneur, and indeed, other operators in the sector have been consistent in their plea that the government allocates large funds to modern infrastructure including for agric irrigation.
Last year, several agro businesses struggled with water supply challenges. The challenges were so serious, resulting in the rising cost of food and reduced menu choices. Also, despite continuous claims of subsiding farm input for easy access by farmers, many smallholder farmers lamented the lack of access to input and subventions.
Experts suggest way out
The Chief Executive, Agricorp Holdings Limited (UK), Kenneth Obiajulu, expressed worries that the agric sector contributes less to the nation’s Gross Domestic Product (GDP), attributing this partly to high cost of production, as well as the fact that country is a great importer.
To increase the agricultural sector’s capacity to drive growth and development, Obiajulu canvassed the need to improve agricultural facilities. He said for any agric sector to be resilient, it must have the skills – including entrepreneurial – in sufficient quantity to support the creation of local industries.
Although in rapid decline, the agricultural sector and its value chain boasts of artisans, technicians and engineers. These people could be harnessed and re-focused into high-tech activities that support automation and mechanisation in agriculture and agro-processing.
Obiajulu maintained that Nigeria needs a radical change in its approach to agricultural development to generate medium to long-term revenue.
For the Executive Director, Agricultural and Rural Management Training Institute (ARMTI), Dr. Olufemi Oladunni, the focus should be on stimulating agro entrepreneurs who can provide medium to high-tech services and technologies that support the value chains.
He stressed the need to push forward rural vitalisation and accelerate the modernisation of agriculture in rural areas. He said the institute is doing a lot to improve the capacities of rural agro industries such as processing to create more jobs in rural areas.
The Country Manager, OCP Fertilisers Nigeria, Mr. Caleb Usoh, said the most important factor in Nigeria’s agricultural success is continual improvement in techniques and infrastructure and the healthy development of farmers.
According to him, agricultural modernisation would enhance the country’s ability to ensure supplies of grain and major agricultural products, improve its yield per unit area of land, and optimise the trade of agricultural products.
Nigeria does not have any communicated agricultural policy. In other words, the industry lacks a blueprint for resuscitating the sector. Experts, therefore, say that fashioning out a workable agric policy will help turn the sector around.
They also canvassed the need for a nationwide data on farmers, which, according to them, is limited. They note that so far, agro businesses are grappling with the challenge of gathering reliable rural data that could inform planning and budgeting.
Same for foreign investors whose major challenge in investing in Nigeria’s agriculture is the absence of high-quality and timely agricultural data.
Last year, the sector received assurance that agricultural research institutes across the country would be revamped and repositioned to promote sectoral growth and food security.
Former Minister of Agriculture, Alhaji Sabo Nanono, had promised that the government would support the research institutes to enable them do more work on improved seeds that will be suitable to the environment.
The thinking is that with a population of about 200 million, increased domestic production and emphasis on added value are key to strengthening the economy and achieving food self-sufficiency.
For analysts, strengthening the agriculture sector would not only help in uplifting farmers, but also benefit the larger section of the rural poor who are engaged in the industry or indirectly linked with it as consumers.