Nige­ria should ex­port value-added yam prod­ucts not the tu­bers

Financial Nigeria Magazine - - Contents -

The Sus­tain­able De­vel­op­ment Goal (SDG) 2 aims to end hunger and achieve food se­cu­rity by 2030. A key tar­get of Goal 2 is also to dou­ble agri­cul­tural pro­duc­tiv­ity and in­comes of small-scale farm­ers through im­proved ac­cess to land, in­puts, fi­nan­cial ser­vices, mar­kets, and other op­por­tu­ni­ties.

In other words, in­creas­ing agri­cul­tural out­puts is a ma­jor strat­egy in help­ing to end world hunger. In de­vel­op­ing coun­tries like Nige­ria, this calls for an agri­cul­tural rev­o­lu­tion that would in­volve the use of im­proved meth­ods of cul­ti­va­tion, plant­ing of high-yield­ing va­ri­eties of crops, and the in­dus­tri­al­i­sa­tion of agri­cul­ture.

Nige­rian agri­cul­ture re­mains mostly at a rudi­men­tary stage and pro­duc­tiv­ity is still very low. A lot of food is lost post-har­vest and through waste. Ac­cess to credit, par­tic­u­larly by small­holder farm­ers, is a ma­jor chal­lenge. The coun­try is a net food im­porter and her food ex­ports are not com­pet­i­tive.

The Agri­cul­ture Pro­mo­tion Pol­icy (APP) of the cur­rent ad­min­is­tra­tion of Pres­i­dent Muham­madu Buhari aims to plug the pro­duc­tiv­ity gap and fix the sup­ply chains. Through this and other poli­cies, the gov­ern­ment is pro­mot­ing im­port­sub­sti­tut­ing in­dus­tri­al­i­sa­tion (ISI) to achieve eco­nomic di­ver­si­fi­ca­tion. The ISI pol­icy frame­work is ex­pected to help achieve a more com­pet­i­tive ex­por­ta­tion of man­u­fac­tured goods.

But the gov­ern­ment seems to have negated this pol­icy with the yam ex­port pro­gramme that com­menced last month. Ac­cord­ing to the Min­is­ter of Agri­cul­ture, Audu Ogbe, about $8 bil­lion is tar­geted in for­eign ex­change earn­ings an­nu­ally from yam ex­ports. This fig­ure was bandied about with­out de­tails on the pro­jected quan­tity of ex­ports vis-à-vis the coun­try's to­tal pro­duc­tion and what would be avail­able for do­mes­tic con­sump­tion. It was also un­clear what ef­forts were be­ing made to in­crease yam pro­duc­tion or re­duce post-har­vest loss and waste.

But while the ob­jec­tive of this plan is to in­crease sup­ply of forex, plac­ing much stock in it would de­rail Nige­ria's agri­cul­tural trans­for­ma­tion. The pro­gramme pro­vides the sense that rather than driv­ing in­dus­tri­al­i­sa­tion of agri­cul­ture, the gov­ern­ment is pri­ori­tis­ing low-hang­ing fruits of com­mod­ity ex­ports, thereby per­pet­u­at­ing the nar­ra­tive of Nige­ria as a com­mod­ity de­pen­dent de­vel­op­ing coun­try (CDDC).

As a CDDC, Nige­ria has a dis­pro­por­tion­ate share of pri­mary com­mod­ity ex­port rev­enue in to­tal ex­port rev­enue. It is a known fact that coun­tries that ex­port man­u­fac­tured goods ben­e­fit more from trade than those that ex­port pri­mary prod­ucts. Some re­search have also sug­gested that there is a neg­a­tive re­la­tion­ship be­tween com­mod­ity de­pen­dence and hu­man de­vel­op­ment. But with the ap­pro­pri­ate pol­icy, Nige­ria should have the com­par­a­tive ad­van­tage – hence the abil­ity to earn more – in the pro­cess­ing and util­i­sa­tion of yam, be­ing the world's largest pro­ducer of the crop. The same should go for cas­sava, an­other tuber­ous crop that Nige­ria is a world leader in its pro­duc­tion.

There are other draw­backs to the ex­por­ta­tion of agri­cul­tural com­modi­ties that can put a damper on the gov­ern­ment's out­look for earn­ing forex. Ac­cord­ing to the Food and Agri­cul­ture Or­gan­i­sa­tion of the United Na­tions, the two dom­i­nant fea­tures in the global agri­cul­tural pri­mary com­mod­ity mar­kets over the last two decades are price volatil­ity and de­clin­ing trend of real prices. The mar­kets are char­ac­terised by al­ter­nat­ing short pe­ri­ods of boom and long pe­ri­ods of over­sup­ply, caused by the ges­ta­tion pe­ri­ods of many agri­cul­tural prod­ucts.

Ac­cord­ing to his­to­ri­ans, the Agrar­ian Rev­o­lu­tion in Bri­tain in the early 18th cen­tury was what paved the way for the First In­dus­trial Rev­o­lu­tion. Like­wise, Ja­pan, South Korea, China and other in­dus­tri­alised economies in Asia fol­lowed an agri­cul­ture de­vel­op­ment-led in­dus­tri­al­iza­tion path­way.

Like these coun­tries, Nige­ria can fol­low the path of agri­cul­tural de­vel­op­ment to achieve her in­dus­tri­al­i­sa­tion by ramp­ing up in­vest­ment in modern meth­ods of agri­cul­ture. In the 21st cen­tury, when de­vel­oped coun­tries are in­creas­ingly adopt­ing dig­i­tal tech­nolo­gies like drones and apps in farm­ing, Nige­rian yam farm­ers – whether cor­po­rate or small­hold­ers – use hoes to make mounds in or­der to plant yam. In­spite of the pre­dom­i­nantly crude meth­ods of yam farm­ing, the coun­try has been the top pro­ducer of the crop glob­ally, with an out­put of 38 mil­lion tonnes in 2012. But by the time ma­jor­ity of yam farm­ers adopt mech­a­nized al­ter­na­tives to mound­ing, like 'ridg­ing', the out­put would ex­po­nen­tially in­crease.

With over 70% of her land area arable, Nige­ria has long been ripe for an agri­cul­ture rev­o­lu­tion. Cas­sava, yam, maize, rice, sorghum, soy­beans and many other farm pro­duce are in­dus­trial crops. But the rev­o­lu­tion can­not be re­alised sim­ply by tap­ping ex­port mar­kets for pri­mary farm pro­duce. There has to be a mod­erni­sa­tion of food pro­duc­tion, pro­cess­ing and dis­tri­bu­tion meth­ods. The sup­ply chains, in­clud­ing lo­gis­tics, mar­ket­ing, and fi­nanc­ing, have to be strength­ened.

In­stead of ex­port­ing yam tu­bers to be pro­cessed in Europe and United States or for con­sump­tion by the African di­as­pora, Nige­ria should be ex­port­ing in­stant­pounded yam flour, live­stock feed, spray starch and other value-added yam prod­ucts. The ef­fects of the value ad­di­tion will not only be im­proved food se­cu­rity; job prospects will rise, in­comes and liv­ing stan­dards of farm­ers will also in­crease. More­over, the tran­si­tion to higher pro­duc­tiv­ity in agri­cul­ture will help achieve the long-awaited struc­tural trans­for­ma­tion of the Nige­rian econ­omy.

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