President Buhari's environment-friendly agriculture reform
Nigeria's agricultural production has declined over the past decade. Africa's second largest economy is a net food importer, spending about $3 to $5 billion annually importing food items such as rice, wheat, fish, etc. To avert the country's imminent food security risk, the Federal Ministry of Agriculture and Rural Development (FMARD) has unveiled a new policy to revamp the agricultural sector. Known as the Agriculture Promotion Policy (2016-2020), the policy is designed to address what the government has identified as the two major challenges facing the country's agricultural sector, namely; the inability to meet domestic food demand, and the lack of competiveness of its food exports.
The administration of former President Goodluck Jonathan launched the Agriculture Transformation Agenda (ATA) in 2012 with fairly similar objectives as the APP of the current administration of President Muhammadu Buhari. Among the key achievements of the ATA was the establishment of the Growth Enhancement Scheme (GES) through which 10 million smallholder farmers got access to subsidised seed and fertilizer inputs. A number of funding mechanisms were created under the ATA such as the N10 billion Cassava Bread Development Fund. FMARD also joined as a key stakeholder in other agribusinessfocused initiatives such as the Nigeria Incentive-Based Risk Sharing system for Agricultural Lending (NIRSAL) of the Central Bank of Nigeria, and the Fund for Agricultural Finance in Nigeria (FAFIN), also backed by Nigeria Sovereign Investment Authority, German KfW development bank and African Development Bank.
It is commendable that the current administration did not completely reverse the ATA policy. The Minister of Agriculture and Rural Development, Audu Ogbeh, has reiterated that the APP seeks to scale up the achievements of the last administration's agriculture policy. On August 31, the government announced the renewal of the electronic wallet system that enables farmers to receive directly on their mobile phones subsidised electronic vouchers for inputs.
However, the reason for framing a new policy has been predicated on the need to correct the weaknesses in the old policy. For instance, despite the plethora of funding mechanisms under the old scheme, access to credit, particularly to small holders, remains weak. Also, the national Staple Crop Processing Zones (SCPZs) set up to attract private sector investment had little success under the previous administration. There are still wide deficits for a number of staple foods despite the goal to make Nigeria a net exporter of these commodities. Post-harvest losses are still a big issue.
The key priorities of the new policy entail the creation of a viable agribusiness economy that is capable of delivering sustained prosperity for farmers and meeting the domestic food demand of the country. Also, given the fall in oil prices, there is a renewed focus to move forward the economic diversification agenda such that food exports can generate substantial nonoil revenue for the country.
Nevertheless, an overview of the APP, also known as ‘The Green Alternative,’ shows there is a pressing need to boost productivity of the Nigerian agriculture sector by expanding access to inputs and enhancing production processes. To this end, the policy aims to simplify the process of land acquisition and promote optimal land management practices. It aims to introduce measures to improve soil fertility, increase access to high-quality inputs, and propagate policies for integrated production of livestock and fish farming.
The policy also seeks to address the country's low mechanization intensity of about 10 tractors per 100 hectares of land. Indonesia's mechanization intensity is reported to be at about 241 tractors per 100Ha. Only 0.8% of arable land in Nigeria is irrigated, compared to Thailand's 28% of irrigated arable land. Little wonder Nigeria has a low yield per hectare of 20% compared to 50% obtained in developing countries with high agricultural productivity. Antiquated harvesting practices and poor post-harvest handling of agricultural produce are also important components of value chain development that the policy seeks to address.
The federal government hopes to address these challenges by increasing budgetary allocation to the agriculture sector from an average of 2% of annual federal budgets to 10% as recommended in the Maputo Declaration. The CBN and NIRSAL are engaging with stakeholders to increase private lending to the agriculture sector from less than 5% to 10% of total lending in the banking sector. Not only that, access to finance will be supported by Good Agricultural Practices (GAP). This can be achieved by expanding the research capacities of existing agricultural tertiary institutions.
The APP imbibes the idea of climate smart agriculture promoted by the Food and Agriculture Organisation (FAO). The new policy is called ‘The Green Alternative’ because it seeks to achieve efficient use of resources to ensure environmental sustainability.
As part of its inclusive growth and sustainability agenda, the FMARD hopes to launch entrepreneurship platforms that will create a pathway for youth and women agroentrepreneurs.
These policy objectives are laudable. However, the government needs to quickly begin to delineate strategies for achieving its objectives. The APP is an alternative policy that is long on promises in terms of what needs to be done, but short on proffering salutary policy instruments for correcting the shortfalls in the previous policy. A clear and predictable policy environment is what will attract private sector investment. Certainly, there are enormous opportunities in the agriculture sector. Despite the current Nigerian recession, the agriculture sector grew by 4.53% in the second quarter of this year, exceeding the 3.09% growth recorded in the first quarter.
The government has done the sensible thing to renew the e-wallet scheme after it was suspended. The policy has helped millions of farmers. Indeed, some African countries and other developing nations have shown interest in the Nigerian e-wallet model to increase agriculture yield and boost the income of smallholder farmers.