How decades of weak FG’s agro-inputs schemes affect smallholder farmers
Despite the agricultural interventions by various governments, the smallholder farmers in the country have remained the same and until recently, Nigerian agriculture remained the same as it were decades ago.
Some experts argued that the subsidy regimes because of the way they are structured, made the smallholder farmers to remain at subsistence level instead of growing to become commercial farmers.
A critical look at the chain of agricultural input from the production (manufacturer), the distribution (agro-dealers) and the final consumers (farmers) shows that it has been characterized by many problems over the years.
Dr. Eric C. Eboh, a onetime Executive Director, African Institute for Applied Economics (AIAE), Enugu, and Research Coordinator, AIAE’s Poverty, Income Distribution and Labour Market Programme, along with other scholars in a paper presented in Addis Ababa, Ethiopia, examined the history of fertilizer subsidy policy in Nigeria posited a critical question: “do government fertilizer subsidies benefit rural poor farmers in Nigeria?”
Dr Eboh observed that from independent to the mid 1970s, the level of subsidy by state governments were between 25-50% costs of fertilizer.
However, the Federal Government decided to centralized fertilizer procurement and distribution, and set the subsidy level from 1976-1979.
“The subsidy level rose to 75-85%, depending on states. Between 19801983, the policy reverted to decentralized procurement, and federal and state governments bore equal share of the 75% subsidy.
“During the 1984-1985 period, the Federal Government again centralized procurement and the subsidy levels were 38% in 1985, 25% in 1988 and 28% in 1986. Between 1986 to 1998, the Federal Government decentralized procurement, deregulated and privatized marketing of fertilizer by 1997.
“The subsidy level ranged 70-80%, with the Federal Government withdrawing from the subsidy programme in 1997-98. In 1999, the Federal Government re-introduced fertilizer subsidy level of 25% but abolished subsidy in 2000,” they said.
In the last three decades, in spite government of subsidy, the prices of fertilizer (for 50kg bag) rose from N50 in 1990 to N875 in 1996, N1200 in 1997, N1500 in 1999 and N1800 in 2000.
The product witnessed continuous increase in prices from N1,500-2000 in 2001 until it reached the all-time record high last year (2016) of N12, 000 per 50kg bag with report of it sold higher in some places.
So what really has gone wrong with the input subsidy delivery system in Nigeria? Experts shared their thoughts.
Professor G. B. Ayoola, is an expert in agricultural economics and policy and President farm and infrastructure foundation, Abuja.
He categorized the problem of agricultural inputs delivery system into three dimensions: the technical dimension, which is associated with a number of technical issues that need to be addressed in reforming the sector; the governance dimension, which is associated with a number of governance problems within the operation of the national input system and the service delivery dimension.
He also pointed the issue of policy sustainability-how stable are these farm input policies from era-to-era, regime-toregimes.
The university don worries that the national agricultural fertilizer policy and approved by the federal executive council in the era of Obasanjo regime in 2006 did not find any implementation attention adding that the policy was not legislated.
“The appropriate framework to build farm input policy is the right approach. The 2006 fertilizer policy and the 2010 seed policy that were presented for legislation did not see the light of the day” because if the policy are legislated, people will ask question if government fails to deliver such service.
“Because of lack of legal framework for such policies, nobody can challenge the authorities why certain policies have failed in the farm input sector and so they continue to roll in and rollout failed policies from point to point,” he stated.
Professor Ayoola pointed out that between the policy authority and policy beneficiaries (farmers) there is a gap that need to be managed them properly.
Expert like Dr. Innocent Okuku, an agricultural economist with Notore Fertilizer while speaking Daily Trust on subsidy issue stressed what government subsidies have done over the years were counter-productive adding that “When government brings out subsidy programme, they appoint their own agro-dealers outside the distribution structure of fertiliser companies. Genuine fertiliser business people who are part of the distribution channel, once they see the structure of the subsidy programme, they jump into it and leave their regular supply channel,” he said.
Speaking further he stressed “if you intervene as a government to help a sector to move faster, your intervention should be that you’re not going to disrupt the sector you want to push further. So if you say I want to help farmers to have access to inputs by helping the agro dealer’s structure to provide inputs more rapidly, then you need to look at the existing agro dealer structure and support them to do that. But when you bring people outside that agro dealer’s structure - they have no bases, they have no existing structure, they have no existing relationship with places where they source those products from neither do they have long term commitment to the scheme - that is a big problem.” On seeds, he said, If government rolls out a programme that gives the vast majority of farmers the impression that seeds should be very cheap, maybe as cheap as grains, you will find out that farmers are not going to be interested in buying seeds at the appropriate price. Therefore, investors in good quality seeds production are going to be wary of putting their product in the market. When government sets up a subsidy programme in which people buy grains and package as seeds and then distribute, that sends a signal to the people who receive those seeds that we don’t have good quality The product witnessed continuous increase in prices from N1,500-2000 in 2001 until it reached the all-time record high last year (2016) of N12, 000 per 50kg bag with report of it sold higher in some places seeds, because when they plant it, they will discover that there is nothing special in these seeds.
Dr Okuku advised that what the government needs to do is to intensify the production and distribution of good quality seeds rather than subsidise the seeds, noting that if government supports people who produce good quality seeds with finance to expand their production, skills, and efficiently distribute the input, and if like roads and rail network are improved, the cost of seeds will drop.
“It means the seeds will be available in the market and once farmers start getting better result, it is an incentive to come back and buy again. But once you create an atmosphere where people will rush-people who are supposed to provide good quality seeds will rather buy grains and put it on their channel and distribute. That way, you are sending a wrong signal to the market,” he opined.
Mohammed S. Idris is an expert with the International Fertilizer Development Center (IFDC) in Abuja. He enumerated the reasons for the poor access to farm input by Nigerian farmers to include lack of legal framework for the imput sector, lack of monitory of blending activities to check quality and lack of enough dealers to cover rural areas in the country.
Mr Idris also described government involvement in the distribution has create unnecessary bottlenecks and politicking getting farm inputs to farmers.
The Director Farm input management of the Federal Ministry of Agriculture and Rural Development, Engineer O B Jatto during a stakeholder meeting on farm inputs issues in Kaduna recently acknowledge that distribution of farm inputs and the quality is still a challenge, which the ministry is trying to deal with.
He expressed concern over some report of adultration and illegal fertilizer blenders who target vulnerable farmers in remote places adding that the prices of such input are so cheap to attract farmers.
The seed sector has serious problem. In 2012, government was also involved in the production of seed and during the last administration, government discovered that some people went to the market buy grains dressed as seed using the logo popular seed companies to deceive farmers.
“It is a problem were try to solve,” he stated.
Minister of agriculture and rural development Chief Audu Ogbeh recently at the farm input stakeholder engagement forum in Kaduna said upon assumption of office, set up a committee to review the Growth Enhancement Scheme (GES-a scheme that gets subsidized farm inputs to farmers through mobile phone text messages)- operating procedures and strategies with a view to addressing the challenges encountered in the implementation of the scheme.
“It is therefore notable that this present administration instead of abandoning the GES scheme, is rather aspiring to make it more efficient in the delivery of inputs to farmers thereby breaking the cycle of policy summersault in the subsector,” he said.