There was therefore going to be emphasis on value chain. In other words, the ministry decided that agriculture would be run through its entire value chain – farming through processing, that is adding value and sales locally and internationally.
One year on, the logical question is, how has the agriculture ministry fared with its project that is meant to rethink agriculture in the country? The Ministry launched what it calls a ‘government-enabled, private-sector-led transformation’, which involves putting in place new waves of incentives to attract foreign and local investors to the sector.
New fiscal incentives, including zero tariff and duty on agricultural machinery and equipments were announced by the President, to drive the agricultural transformation. It is on record that the Ministry launched a major effort to work strategically with the state governments to help drive investments in their agricultural sectors.
It also decentralised its operations and put in place 36 offices, with directors of agriculture, across the country, and six regional offices, one per geopolitical zone, to help drive investments and agricultural programmes in partnership with states. The efforts are paying off, as the Ministry is working more closely with the state governments than at any period since its existence.
Indigenous companies on the move
Indigenous companies are taking advantage of the agricultural transformation agenda. Dansa Foods is establishing a tomato processing plant in Kano, Famag-Jal has a huge investment in Halal certified meat processing plants in the Federal Capital Territory (FCT); Teragro of the Transcorp Group has invested in the processing of fruits in Benue State.
Teragro Limited, the agribusiness subsidiary of Transnational Corporation of Nigeria Plc will save the nation about $8million foreign exchange annually on reduction of orange juice concentrates, mango puree and mango concentrates importation.
The plant which is first-of-its-kind in the country has installed capacity to produce up to 26,500 metric tonnes of juice concentrates per annum. Jide Adedeji, CEO Teragro, disclosed this in a press conference during the commissioning of the factory in Makurdi by President Goodluck Jonathan.
Adedeji said Nigeria spent $55 million on importation of juice concentrate in 2007, and that with what the country is producing, foreign exchange spent on importation could be conserved by ten percent in a year.
Flour Mills of Nigeria, Multitrex Integrated Foods Plc and Olam Nigeria, have all begun deploying capital to develop new agricultural operations. The Leventis Group has started new investments to revive all its previously abandoned farms and processing facilities, all due to the new reforms in the agricultural sector.
On the Nigeria Stock Exchange, agricultural companies (PRESCO, Okomu Oil) are performing well. In one year, the face of agriculture has changed, from a development programme to a business.
According to Kayode Oyeleye, special assistant to the minister on media and strategy, multilateral and bilateral agencies are providing donor-related investment support and have shown enthusiasm for the major reforms on-going in Nigeria’s agriculture by committing more $1 billion towards Nigeria’s Agricultural Transformation Agenda.
“The World Bank Group is providing $500 million. African Development Bank (AfDB) has committed $250 million. The Bill and Melinda Gates Foundation has selected Nigeria as a priority country for its investment in agriculture. The International Fund for Agriculture Development (IFAD) has put up $80 million.
“The United States Agency for International Development (USAID) has committed $60 million. The UK Government, through DFID has committed £37 million. The Tony Elumelu Foundation, Ford Foundation and UNDP are providing significant technical support facilities,” Oyeleye said.
Fertiliser supply chain
Before Akinwunmi, it was corruption galore regarding fertiliser procurement and distribution. But now all fertilisers are sold directly to farmers by fertiliser companies. Also, the old system where government bought and sold seeds, which were also fraught with corruption, with grains sold to farmers as seed has been totally dismantled.
To ensure that poor farmers got fertilisers and seeds without political interference, a new scheme called Growth Enhancement Support (GES) was launched to provide targeted support for seeds and fertilisers to five million farmers per year or 20 million farmers within four years. Hitherto, the farmers and their locations were not documented.
To make targeting easy, the Ministry launched the first-ever Know-Your-Customer initiative and developed a database of 4.5 million farmers in 2012, to aid in better targeting of subsidised fertilisers and seeds to farmers. The database will continue to be updated yearly.
The Ministry launched a Growth Enhancement Scheme, where farmers receive 50 percent subsidy on fertilisers, for a maximum of two bags, through the use of their mobile phones or Electronic-wallet system (E-wallet).
The policy has spurred private sector activity to build supply chains that reach farmers – what they have never done before. It has empowered farmers.
State of commodity value-chain
Progress has also been made respect of cassava, rice, cocoa, maize, cotton, oil palm, sorghum, dairy, horticulture, beef/meat and poultry. Nigeria is the largest producer of cassava in the world with 34 million metric tonnes produced per annum. But the country contributes zero percent in terms of value added in global trade.
Yet our farmers grow cassava in abundance and the price of cassava has collapsed around them. But it is now the era of development of value chains for cassava that will raise income for farmers. This includes the use of cassava for high quality cassava flour (HQCF) to do partial substitution for wheat flour, cassava chips, starch, sweeteners and ethanol.
The Ministry spearheaded the production of high quality cassava flour for use in composite flours to substitute for some of the imported wheat flour being used in the baking industry. Corporate bakers have already started commercialising the inclusion of 20 percent high quality cassava flour in bread.
According to the Ministry of Agriculture, a total of 690,000 metric tonnes of rice was produced in 2012 from the interventions under the rice programme. This is said to be 140 percent higher than the target set for 2012.
New fiscal measures were announced by Mr. President raising tariff for brown rice, and levy on imported finished rice, to encourage local rice production. In response, 13 new private sector mills were established in the last 12 months, buying and processing local paddy. The total capacity of the new mills is 240,000 metric tonnes. High quality local rice rolled out on commercial scale by Ebony Rice, Ashi Rice, Mikap rice and Umza Rice.
To ensure the county has in place industrial capacity for international quality grade milled rice that can compete with imports, the Ministry of Agriculture and the Ministry of Finance concluded arrangements to facilitate the acquisition of 100 large scale integrated rice mills, with a total capacity of 2.1 million metric tonnes, to be located across the country, owned and operated by the private sector. This is being acquired under a low interest rate facility of $ 1 billion from the China EXIM Bank.
Cocoa is enjoying the release by the ministry, eight new high-yielding, fast-maturing cocoa hybrids to revolutionise the cocoa sector. These hybrids give five times the current yields and mature in two years instead of four to five years. A total of 3.6 million hybrid pods (or 114 million cocoa seeds) are being distributed to farmers, free of charge, across cocoa growing states to establish new plantations and phased rehabilitation of old plots.
Cotton, oil palm
When the new administration started there were no improved cotton seeds available in the country. The Ministry entered into MoU with the West African Cotton Ltd. (WACOT) to develop 15,000 hectares of improved cotton seed multiplication holdings in 2012 extendable to 25,000 hectares in 2015. The Ministry initiated the deployment of Bt cotton technology into the country as a viable option to enhancing cotton yield in the country.
Oil palm is undergoing transformation with the distribution of improved tenera oil palm nuts from the Nigerian Institute for Oil Palm Research, by government to farmers. Seventeen oil palm estates in 11 states have signed agreement with the Ministry to raise a total of 1.3 million improved tenera nuts into mature seedlings to plant 8,750ha in their estates in 2013.
Each of the estates will receive 75,000 to 82,500 nuts and will each plant 500-550ha in 2013. The states involved are in Kogi, Edo, Ondo, Delta, Cross River, Ogun, Akwa Ibom, Bayelsa, Abia, Osun, and Enugu.
Dairy and beef
In Oyo state, a cumulative sum of 352 tons of milk was delivered from one milk collection centre (MCC) while six out of 40 formed in Kaduna supplied 195.83 tons of milk. Five milk collections centres were established in Oyo State. Draft comprehensive breeding plan was completed to guide the breeding programs.
Three existing breeding centres at Funafuna, Niger State, Paikon Kore, FCT and Jibiro, Adamawa State have been rehabilitated as centres for community artificial insemination (AI) service. The ministry has also completed the procurement processes of importing semen and other AI kits for the cross breeding programme.
A comprehensive Breeding Plan for the Dairy and Beef Cattle has been developed. Under the programme, potential investors for the commercialisation of the Shika Brown breed bird have been identified. Over 200 cassava farmers and processors have been trained nationwide in the production of Feed Grade Cassava Grits (FGCG) for poultry feeds in April 2012. This is the first time that cassava grits will be used in poultry feed at commercial scale.
LPOs for the supply of 1120 metric tonnes of FGCG worth N34.0million were issued out to cassava farmers/processors in May 2012 by Amo Byng Feed mill. An extensive consultation was carried out with Governments, Poultry Association of Nigeria (PAN) and other stakeholders in Enugu, Lagos, Ogun and Oyo states in June 2012.
A total of 96 Live Bird Market (LBM) Operators under the programme, have been trained while 3 LBM at Uyo, Kano and Dutse were commissioned in the second week of July 2012.
Under the animal health value chain programme, 5.30 million doses of CBPP have been allocated to five states for vaccination, while 3.6million doses of PPR were allocated to nine states for vaccination.
Sorghum and others
Two new sorghum hybrids, which give five times the yield currently obtained by farmers, were released within the year. These hybrids are a major technological breakthrough. The Ministry embarked on rapid and intensive hybrid sorghum seed production in which 70ha of certified seed plots have been planted by seed companies in five states.
A total of 60,000 metric tonnes of additional sorghum was produced in 2012 for fortified foods, which was 111percent above the target set for production of sorghum for fortified foods. Fortified Foods are being developed under the transformation agenda, including sorghum flour blended with soybean e.g. ‘Soy-Akamu’, for School Feeding Programme, lactating mothers.
Malt Beverages, drinks and foods (e.g. ‘DawaMalt’ also for School Feeding Programme) are also being developed as well as High Quality Sorghum Flour (HQSF) in convenient packaging as TUWOMeal for compositing with wheat (up to 20 percent) to bake bread, up to 40 percent to produce noodles, macaroni, couscous, pancake, breakfast buns, biscuits.
The Ministry moved strategically to expand the production and processing of tomatoes and citrus. It also commenced a major effort to launch Nigeria as a major exporter of horticultural produce. It supported the establishment of the Fresh Produce Exporters Association of Nigeria, to ensure that Nigeria begins to play in the international market for horticultural produce.
Five tomato seed varieties (Roma VF, Havesta, Ronita, Rio Grandi, and UC82B) have also been identified for utilisation in dry and wet seasons. FGN will distribute 1,457kg of seeds during this dry season on GES to farmers in the North East, West and Central states to cultivate 3,000 hectares.
The Federal Government will distribute 1.44 tons hybrid tomato seeds, 4,133 litres herbicide, 5,777 litres of insecticide, and 20,545 sachets of fungicides through agro-dealers to farmers in 2012 and 122,400 seedlings in 2013.
To address this, the Ministry worked with the Nigerian private sector to put up processing plants for tomato. Dangote Foods Company is currently constructing a 1,250 metric tonnes per day tomato processing plant, to be expanded to 3,600 metric tonnes per day by 2015. This will significantly reduce the waste and turn Nigeria into an exporter of tomatoes.
For Emmanuel Ijewere, protem chairman Community of Agricultural Stakeholders of Nigeria (CASON), this is the first time that government and the private sector have sat together to identify the solution to agriculture problems.
He explained: “First Agriculture is not just farming. The entire value chain i.e. seed to table must be part of solution. This is the responsibility of the private sector. The private sector in the past has been myopic and compartmentalised. Each association has behaved as if it is an island. The concept of value chain was alien. Unfortunately, we the private sector are just beginning to put our acts together.”
He said the private sector has shied away from investing in storage business because government policies were inconsistent. The business requires a large capital outlay and cost of funding was exorbitant and there was no value chain to assure its profitability.
“Today however, the thinking has changed and a number of private investors are making serious enquiries. We at CASON have received enquiries about local partners for building storage facilities,” he said.
For Anga Sotonye, managing director Universal Quest Nigeria Limited, a commodity business venture, government has laid the foundation for the take-off of value chain in agriculture. It has also created the required awareness. He confirmed the various efforts made by government to move Nigeria’s agriculture forward.