The Federal Government has put in place a robust plan to cut down on the nation’s current N635 billion spending on wheat importation, BusinessDay has learnt.
One of the steps government has taken is to introduce 40 percent cassava flour content bread into the market and by so doing, drastically reduce the current N635 billion Nigerian wheat importation bill.
Akinwumi Adesina, minister of Agriculture and Rural Development, explained how the government intends to achieve its plan, at a parley with partners from the bakery industry in Abuja.
He said: “First we will work with the bakeries and High Quality Cassava Flour (HQCF) industry to develop a commercially viable process for producing Nigerian Bread. Steps have already been taken, and with our partners from Thai farms who have already developed a process with leading food science companies to attain a 30 percent blend, which is a critical first step to attaining a 40 percent blend.
“Second, we will work with the bakery industry to provide appropriate incentives for them to make the necessary investment to modify their process and supply chains. An initial incentive announced by Mr. President is a 12 percent point reduction in the corporate tax rate of bakeries that are producing Nigerian Bread, within the next 18 months. In addition, we are actively consulting with the industry to identify further incentives that will ensure a rapid adoption of Nigerian Bread.”
He said a third step would involve the ministry working to ensure adequate supply of HQCF to the industry.
This, he observed, would be done in a three step process which includes the establishment of 12 HQCF processing plants with an installed capacity of 120 ton/day, made up of two 60ton/day production lines, via a Private Public Partnership (PPP); establishment of supply chains of fresh cassava roots for the 12 HQCF processing plants, through establishment of out- grower farmers and access to inputs, finance, and tractors, and rural road infrastructure upgrade; and raising cassava productivity on-farm from 12 MT/Ha today to 25MT/Ha via the demonstration and dissemination of proven improved production technologies.
He said the feasibility study would be submitted by January 10, to two potential financiers: the China and Thailand EXIM banks, for a loan to fund the manufacture, shipment, and installation of the plants within 8-10 months.
“China EXIM Bank loan conditions state 2 percent interest rates over 20 years for government- to- government loan and 400 points above LIBOR over 20 years, for commercial loan. China EXIM Bank loan covers both machinery and civil works and it requires a 15 percent down payment of the total loan value. Thailand EXIM Bank loan conditions are subject to negotiations,” he said.
He added that the out- grower farmers’ institutions would be organised into out- grower associations, by ADP extension agents and FMARD consultants, for the bulk purchase of agro-inputs, access to finance under NIRSAL, and to tractors, via loans from the farm mechanisation intervention of FMARD. “In addition, out- grower associations will be the focal point for development of farmer capacity for improved production, scheduling of harvesting, and transport arrangements for delivery to the HQCF factory,” among other plans, he said.
And lastly, on raising Cassava Productivity on-farm from 12 MT/Ha today to 25MT/Ha via the demonstration and dissemination of proven improved production technologies, he said the key activities would involve identifying a proven package of 4-5 improved varieties with high dry matter content, fertilizer rates specific to target locations, and cultural practices for demonstration to farmers, establishing between 10-50 farmer and researcher managed demonstration trials per state, 0.5Ha in size, in locations, based on accessibility to farmers participating in an HQCF processing plant out- grower scheme and training ADP staff on supervision of demonstration trials.
Adewunmi also listed monitoring pests and diseases and responding with appropriate controls, and passing the required monitoring and management skills on to extensionists, agricultural service providers, and farmers.
“Other activities to reach the target goal of 1.06 million metric tonnes of HQCF, include sourcing of financing from IFAD for R&D support to farmers and coordination activities across private sector, federal and state government required for success,” he said.
Nigeria ’s food import bill is exceptionally high, with the top four imports consuming over N1.2 trillion in foreign exchange every year.
The food imports are growing at an unsustainable rate of 11 percent per annum, fueling domestic inflation and driving poverty.
According to figures from the Federal Government: “We are importing products that we can either produce in abundance, such as N356 billion worth of rice, N217 billion worth of sugar and N97 billion worth of fish or, we are importing products that we can easily find local alternatives for us to reduce our import bill, such as N635 billion worth of wheat.”
