Grain importation and the case for the Nigerian farmer

by Deji Rotimi

October 5, 2017 | 12:36 am
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In recent days, there has been quite a lot of noise about importation of grains precisely maize and the dearth of the Nigerian farmer.

After filtering through the various chatter across platforms, I deduced the gist of the whole situation. Some agricultural based groups are complaining about the importation of maize at relatively cheaper prices by various industrial agribusiness companies and how it will crowd out the market for local farmers; thus requesting the government ban grain importation.

As a stakeholder in this industry, I am privileged to have a holistic view to situations across the value chain; from engaging local farmers via contract off-take to advising government on various issues.

There are various viewpoints I can employ to address this issue, but I will stick to one. The realistic one.

There are several statistics bandied around on the annual national demand for maize; 5 million MT, 7 million MT, 10 million MT, but for this conversation, the number that matters is 500,000 MT.

500,000 MT of maize is the annual demand of just one of the industrial companies that operates in Nigeria.

I will proceed to describe the onerous task and resources it takes produce half a million metric tonnes of maize per annum.

Firstly, assuming we estimate a generous production yield of 3 Mt per hectare, a land size of 150,000 hectares will be needed to cultivate at a cycle. That is 1,500 km2. The entire land size of Lagos state is 999.6 km2. With the current land reform or lack thereof, acquiring such contiguous land mass without much bureaucratic and legal hurdles will be a miracle.

Secondly, to clear and prepare the entire ‘Lagos’ ( sorry, I mean land) , at the current rate of 450,000 naira per hectare, a ‘modest’ cost of 67.5 billion naira will be expended. Bear in mind, all this is just bare land.

Thirdly, we would need about 1,500 tractors to operate on 100 hectares each for efficiency. At my last check, a quality tractor of up to 45Hp sold between 15 million and 25 million naira. That is another 37.5 billion naira.

We will not even touch on the lack of qualified personnel to operate and manage these tractors. That will be for another day.

Alternatively, we can rely on our aging farmers, who in the next 5 to 10 years will average 75 years of age, and will be dead or subjected to unimaginable penury worse than they currently experience now. Since, we as a nation have not diligently, constructively and sustainably integrated our young adults into the agribusiness industry. Agricultural extension is an option.

At a rate of 2 hectares per farmer, we will have to mobilise about 75,000 of our aging parents and grandparents to perform back-breaking slave labour.

By the way, we will have to import about 75,000 hoes and cutlasses from our friendly neighbours from Ghana and Benin Republic, because currently we do not produce much of them. I will not bother putting a cost to this.

Fourthly, after cultivation and the miraculously drying of 500,000 MT of maize to specification in 3 to 6 months through sun drying methods. We have to store them in silos (I hope you are not considering 50 kg bags in warehouses).

Where do we have existing silos with capacity to store such quantities? Alas! We are in luck, the federal government just concessioned some silos across the country. However, the highest single location capacity is only 32,000 MT; that is far from 500,000 MT needed. We need a lot more.

By the way, to build a 500,000 MT capacity silo, it will cost a princely sum of 100 billion naira.

The cost implications of a few steps in the  production process I identified above is 205 billion naira, which is in no way exhaustive. The total agricultural intervention by the Central Bank of Nigeria  (CBN) is less than 300 billion naira.

If by some extraordinary miracle, we are able to get all the funding from both government and private sector and map out a patriotic strategy with all stakeholders  (government, industries, farmers) to produce 500,000 MT of maize for one company, we still have to factor time to the variable.

Ideally, we will need about 5 to 8 years of intense and consistent work to attain a level of process expertise. With the current ‘now now’ mentality, very few individuals, entities and even government leadership can muster such virtue.

Furthermore, the processing plant that has been established by the processing company with billions of naira, has created jobs and a guaranteed market for local farmers. But it takes two to tango. In this case, maybe three. Industry, farmers and government. Every partner must be on the same page for things to work.

In addition, it is in the company’s best interest to source local maize from local farmers because of their exposure to the perpetual currency volatility.

It will be full hardy to have a long term processing plant business strategy based on importation of raw materials.

As individuals, we all make economically viable decisions daily; from buying the most affordable tomatoes, okra and garri in the market without consideration of whether the market woman is making profit or just selling to avoid total loss due to its perishability. We mostly care about getting the best deal for our money.

Unfortunately, we do not have an economically ideal business ecosystem in  Nigeria, but it is all our responsibility to ensure we make the system work.

The economy cannot function sustainably without the private sector which includes the industries and farmers alike.

Let us all (government, industries, farmers) , collectively and sincerely start implementing our myriads of agricultural strategies that have been designed over the years. No matter how small, just do something. Enough of talk. In the end, we will all be winners.

So, before we all look to government to solve all our challenges, we must have solved or tried to solve our immediate challenges. Then, the larger challenges can be solved collectively, because we are the government.

As we farmers say, “Great Farmers, Great Nation; No Farmers, No Nation.”

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by Deji Rotimi

October 5, 2017 | 12:36 am
  |     |     |   Start Conversation

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