Stakeholders, experts chart economic path for rice, sugar, dairy products
Stakeholders and experts from different states of Nigeria converged on the Federal Palace Hotel in Lagos from November 26 to 27, 2019 to brainstorm on how to re-position rice, sugar and dairy products for optimal yields so that Nigeria can harness its potentials to not only feed its citizens but also export to other countries and generate jobs.
The two-day event, titled, Re-positioning Rice, Sugar and Dairy Production for Optimal Yield, took place at a period when the Nigerian government shut the nation’s borders along the sub-regional lines due to illicit trade, particularly, imports of agricultural produce that can be grown locally and even exported out of the country.
It also presented an opportunity for stakeholders to review, evaluate and exchange views on strategies that would bring the best out of the nation’s agricultural sector. The annual event is gradually growing to become an important forum for Nigeria’s agriculture and its value chain, as well as a platform that brings farmers, investors, financiers, and small and medium enterprises together.
All discussions at the conference tilted towards achieving self-sufficiency, food security, job and wealth creation from agricultural production, poverty alleviation and rural development in the country.
The chairman of the conference, a renowned chattered accountant and co-chair of the Nigeria Agribusiness Group (NABG), Mr. Emmanuel Ijewere, said Nigeria’s agricultural system had almost collapsed and is currently in an intensive care unit where it can be saved as a matter of urgency.
He lauded the closure of the nation’s borders by the Federal Government, noting, “Some felt the border closure was premature while some felt it shouldn’t have been done. The fact remains that our agricultural system has almost collapsed and the best way is to let it go through the intensive care unit.
“As a policy, what we have is what we should be proud of. Let us have Nigerian rice. Now, some Nigerians are beginning to realise the freshness of Nigerian rice. I am not saying the sector should be at the unit for too long, but let us be patient, endure the suffering for a short period and then re-position rice in Nigeria,” he said.
The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) at the conference described the nation’s agriculture as a major and very important sector of the economy that employs about 38 per cent of the total working population and accounts for a large share of the country’s gross domestic product.
The national president of the association, Hajiya Saratu IyaAliyu, noted that recent success in the sector had demonstrated that with the right policies, Nigeria could scale up productive activities, improve food production and food security, as well as make impact within the agricultural value chain.
Hajiya Saratu, who was represented by the chairman, NACCIMA Agric Trade Group, Chief Ade Adefeko, lamented that about $35 billion was spent on food imports annually across the continent despite the fact that Africa is home to two-third of the world’s most arable uncultivated land.
“Rice is a staple in Nigeria and the country consumes about 7 million tonnes of it annually. Despite Nigeria’s potential in producing sugar for local consumption, the country has been under the stranglehold of sugar importation for the confectionary and beverage industry.
“With reference to the diary sector, it is one of the drivers of American economy, according to 2018 report of the International Dairy Food Association; the dairy industry supports nearly three million workers, generates more than $39 billion in direct wages and has an overall economic impact of more than $628 billion. The dairy sector where we are yet to tap its potentials has an extensive value chain and we must take full steps to fully harness the potentials of the sector,” she said.
While she commended the efforts of the federal and state governments towards finding a lasting solution through different programmes and initiatives to improve the productive capacity within the dairy sector; she stressed that much more need to be done regarding the policy thrust of the Central Bank of Nigeria’s policy on milk importation. Sugar Sugar is a strategic commodity that is essential in the daily life of any nation. It is consumed as a food item and also used as an industrial raw material in virtually all foods, beverages and pharmaceuticals.
The executive secretary of the National Sugar Development Council, Dr. Latif D. Busari, in his paper presentation titled, Nigeria Sugar Economy, stated that Nigeria’s sugar consumption had been on the increase since independence, with an annual average growth rate of 8per cent.
He attributed some of the reasons for the increase in demand for sugar to growth in population, increase in per capital income, urbanisation, change in taste and increased industrial usage of the commodity. However, he stated that only about 5per cent of the national demand for the commodity is produced locally, while the balance is imported with a huge foreign exchange on an annual basis.
“For every cube of sugar imported into the country, one is bringing poverty, unemployment and insecurity, among others,” he said.
He chronicled that the unacceptable situation informed the establishment of the National Sugar Development Council (NSDC) by Decree 88, 1993 (now Act Cap No.78 LFN 2004) as a focal agency responsible for coordinating the available national resources in the sugar sub-sector in order to ensure that Nigeria achieve self-sufficiency in the shortest possible time.
“In spite of the vast potential land for the commercial sugarcane cultivation, the sugar industry did not come into existence until the early 1960s. The early post-independence government industrial policies were basically import substitution- oriented. This was aimed at producing local goods that consumed foreign exchange, and that informed the establishment of the nation’s premier sugar company, Nigerian Sugar Company (NISUCO), in Bacita, Kwara State.
The Savannah Sugar Company Limited (SSCL), Numan, Adamawa State and later, other mini plants of 100tcd and 250tcd at Lafiagi and Sunti respectively. All these sugar companies were owned and managed by government,” he said; stressing that in spite of government’s efforts to develop a virile sugar industry in Nigeria it had to halt the ever increasing gap between demand for and domestic supply of sugar, Nigeria is still a long way to self-sufficiency. Rice All states in Nigeria are said to have the capacity to produce rice if they prioritise with less dissipation of energy on wheat.
Due to the closure of borders, most Nigerians are forced to patronise the locally grown rice, but the challenge remains the high price, which has been a cause of concern.
Alhaji Muhammad Auwal Hadejia, the president of Paddy Rice Dealers Association in Nigeria, said the increase in price was a response to the law of demand and supply; noting that almost all the integrated mills in the country are over-stretched because of the high demand for local rice.
“That is why there is competition. Most of these mills now don’t keep paddy; once they process, it is going into a truck and taken to one dealer or another. Some of the dealers are even in the habit of bribing mill operators to get produce ahead of those who deposited their money earlier. So, along the value chain, after processing, some sell it, some add money. If the cost of milled rice in an integrated mill cost about N15,500, before it reaches the end customers, it may have increased to over N20,000 per bag. The rice is within the reach of Nigerians, but activities of the numerous agents increase the final price,” he said.
The president of NABG, Alhaji Sani Dangote, while presenting a lead paper on ‘The Rice Economy and Value Chain Issues,’ said rice economy was estimated at $5.2billion and projected to hit $6.3billion by 2025. Large scale processors, such as Olam and WACOT, are said to be developing out-grower schemes in conjunction with government, commercial banks, technical and financial partners and input providers.
Olam Nigeria Limited has also announced a total investment of $111million to introduce mechanised rice farming in Nasarawa State, while investors have committed additional N250 billion into Nigeria’s rice production and plan to set up additional 14 rice mills. This is in addition to the current N300 billion already invested by processors. Also, Dangote is projecting to invest $1b in the rice value chain over the next five years.
In spite of efforts by development partners to support the development of the value chain, some core challenges around scalability and sustainability of interventions still remain, as he put it, the combined improved seed production capacity at 100,000 tons satisfying less than 8per cent of national demand.
He also put the mechanisation rate at 0.3hp per ha compared to up to 8hp in China due to challenges in accessing finance, while an estimated 1million tons of rice is being smuggled and sold to local millers and retailers due to restrictive trade policies.
Dangote, who was represented by the director-general of NABG, Dr. Manzo Daniel Maigari, further said that poor branding and packaging limit off take from large scale retailers and high end consumers. Dairy products The executive secretary/chief executive officer of the National Animal Production Research Institute (NAPRI), Professor Clarence Lakpini, is of the opinion that traditional methods are employed in raw milk preservation, sanitation and transport. He noted that more than 80per cent of the milk produced by pastoral herds is not pasteurised.
Lakpini, who presented a paper titled, Re-positioning Dairy Production in Nigeria: Opportunities for Job Creation in the Dairy Value Chain, stated that lack of accessibility to low-cost or accessibility to pasteurisation technologies increased the rate of spoilage, decreases the distance producers can travel, thereby shrinking market access, as well as increases the frequency of sales at less than optimal prices.
Lakpini, who was represented by Professor Peter Barje, also said that over 80per cent of the raw milk produced was processed and packaged using traditional methods.
He said that about 63 modern milk processing plants were established by governments across the country but noted that most of them have closed down while those that are still operating do so at less than 20per cent of their full capacity.
Commenting on agricultural financing, the Nigeria Incentive-Based Risk Sharing System for Agriculture Lending (NIRSAL), said it is currently structuring four million hectares of land into 16,000 geo-coops, covering 8million smallholder farmers for the production of the chosen commodities across the different agro-ecological zones in Nigeria. It stated that a systematic collaboration between agriculture and finance was required for the realisation of the agricultural fortunes of Nigeria.