The timely delivery of affordable and high-quality fertiliser in commercial quantity to farmers largely drove the revolution in the agricultural sector. It was an outcome of the Federal Government’s successful implementation of the Presidential Fertiliser Initiative (PFI) and other strategic initiatives to revitalise fertiliser blending plants across the country. But, the increase in the price of fertiliser, caused by insecurity, particularly in the Northeast, may have thrown spanner in the works. Will this threat reverse the gains of the agric revolution and hurt the drive for food self-sufficiency? Assistant Editor CHIKODI OKEREOCHA asks.
The authorities in the agricultural sector may not admit it, at least, openly. But, by now, they must be covertly and deeply troubled that the impetus that came the way of Nigeria’s push for food self-sufficiency, following the widely acknowledged revolution in the agric sector, has come under severe threats.
The increase in the price of fertiliser, which is, undoubtedly, one of the most critical farming input, has raised fears that the gains so far achieved in the agric sector by this administration, particularly in its first term in office, may be reversed, if nothing is done to check the price hike.
The Nation learnt that the scarcity and skyrocketing price of fertiliser, which have thrown farmers, especially those in the insurgency-prone states of the Northeast, into panic, were caused by the restriction of sales of certain brands of fertiliser for security reasons.
According to some farmers in the affected states, the security agencies, particularly the military, restricted the sale of some brands of fertiliser in some states, such as Yobe, Taraba, Bauchi, Adamawa, Gombe and Borno, citing the use of such brands for Improvised Explosive Devices (IEDs).
Since 2009, the Northeast has been the theatre of a bloody campaign by Boko Haram insurgents. Despite sustained efforts by the Federal Government to rein in the blood hounds, the indiscriminate bombing of mostly-soft targets, using IEDs, said to have been made from chemical components from some brands of fertiliser, has refused to abate.
As part of efforts to halt the bombings, security agencies banned the use of Nitrogen, Phosphorus and Potassium (NPK) and Urea. However, the ban inadvertently made it difficult for farmers to secure fertilisers, particularly Urea, in the open market.
The Chairman of Adamawa State chapter of Rice Farmers Association of Nigeria (RIFAN), Mr. Stephen Maduwa, confirmed this much when he said the scarcity and high cost of fertiliser in the state were as a result of the ban of NPK and Urea.
He quoted the military authorities as saying the products were being used by insurgents to produce explosives. “The scarcity situation is worrisome because it is also affecting government’s Anchor Borrowers Programme (ABP) in the state,” Maduwa lamented.
The National Vice Chairman, National Association of Agro-Chemicals and Allied Dealers, Alhaji Usman Bapullo, brought the disturbing reality nearer home. He said because of the restriction, the cost of the commodity increased by as much as 45 per cent.
Consequently, a 50 kilogramme (kg) bag of NPK, which originally sold for N4,300, now goes for N6,500, while Urea, which sold for N5,000, is now N7,000. He, however, said there was liquid NPK and Urea, which had not been banned, but farmers were not familiar with the liquid one.
The situation is the same in Yobe State, where the restriction on sales of fertiliser had created scarcity of the product. Yobe State Governor Mai Mala Buni, at a recent town hall meeting in Potiskum, said it took series of discussions between the state government and security organisations to lift the sanction on sales of NPK fertiliser.
“As for Urea fertiliser, it is still banned for sale across the state for security reasons,” the governor said.
The Nation learnt that in Yobe, a bag of NPK is sold for between N7,000 and N9,000, depending on distance and availability of the product.
Most farmers in the state depended on liquid fertiliser, with five litres of the product sold for N25,000. The governor, however, said the state government had awarded a contract for the supply of NPK fertiliser to the state for onward distribution to farmers.
Similarly, farmers in Borno State, the epicentre of Boko Haram insurgency, have also expressed concern over the high cost of fertiliser. For instance, a rice farmer at Zabalmari Village of Jere Local Government Area of the state, Hussaini Usman, said the high cost of fertiliser was affecting his production.
Usman said a small size bag of Single Superphosphate (SSP) and NPK brand of fertiliser were sold at N2,500 and N3,000, as against the old price of N1,000 and N2,000, respectively.
However, the Kaduna State Government said it has enough stock of fertiliser to be sold to farmers during the crop season in the state.
Deputy Director and Desk Officer for fertiliser distribution in the state’s Ministry of Agriculture and Forestry, Mr. Bungwun Bege, said the state government had entered into an agreement with two firms, Flour Mills and TAK Fertiliser, as the major suppliers of the commodity to farmers.
He said each of the firms had agreed to deliver 5,000 metric tons at the initial stage to farmers at government-approved rate of N5,500 per 50kg bag, “and so far, there is no price increment of the product by the suppliers.”
Bege said there was no scarcity of the commodity in the state. His words: “Flour Mills has five trucks while TAK has two trucks of 600/50kg bags in State Government stores in each of the 23 local government areas in the state.
“While farmers in some local governments have bought up to 19 trucks, others are yet to buy up two trucks, as they buy according to their needs,” he said.
Bege added that so far, the ministry was yet to receive any complain of either scarcity or hike on the price of the commodity from farmers in any part of the state.
Why government is jittery
The Federal Government set off a major revolution in the agricsector when it came up with the PFI. Essentially, the PFI, which was inaugurated in December 2016, was aimed at delivering commercially-significant quantities of affordable and high-quality fertiliser at the right time to farmers.
The initiative was borne out of the desire to end fertiliser importation and the attendant impact on the country’s foreign exchange reserves. It was designed to stimulate significant economic activities across the agriculture value chain and catalyse growth by meeting the fertiliser demand of farmers during the wet farming season.
Before the strategic intervention, the non-availability of fertiliser was, arguably, one of the major obstacles to increased productivity in the agric sector. Its scarcity was a serious disincentive to farmers’ efforts to contribute to economic diversification through small, medium and large-scale agriculture.
But, the Federal Government, through the PFI, changed the narrative. On the strength of the PFI, the fertiliser blending industry bounced back. The initiative, which involved a partnership with the Government of Morocco for the supply of phosphate to produce fertiliser locally, resulted in the revitalisation of several fertiliser blending plants.
Nigeria, with its 11 fertiliser blending plants in bad shape in 2015, now has 22 approved plants, 18 of which are producing at installed capacity.
As at 2017, a year after the introduction of the PFI, the initiative had delivered 10 million 50kg bags (500,000 Metric Tonnes (MT) of NPK 20:10:10 fertiliser at a price of N5, 500. That was down from the price of N9, 000 per 50kg bag in 2016, representing a 40 per cent reduction.
The PFI, according to the Minister of Information and Culture, Alhaji Lai Mohammed, also targeted the delivery of 20 million 50kg bags (1 million MT), which will double the 2017 figure. He recalled that before PFI, each imported fertiliser bag was subsidised to the tune of N6, 000 per bag.
Noting that over six million bags of fertiliser had been sold to farmers at N5, 500 per bag, the Minister also said there had been a higher patronage for the country’s rail network due to movement of raw materials and finished goods.
“Also, the bag-making sector of the economy was boosted, with over 10 million packaging bags produced exclusively for PFI. Sixty thousand direct jobs and even higher number of indirect jobs have been created,” Mohammed said.
The Nation learnt that the changing fortunes of the fertiliser blending industry and by extension, the agricultural sector, where the government is pushing to achieve self-sufficiency in food production and consumption, was largely as a result of a Memorandum of Understanding (MoU) it signed with Morocco in 2016 to produce fertiliser locally.
The deal with the Moroccan Government was for the supply of phosphate to ensure the production of one million tons of fertliser locally. The agreement was anchored by Fertiliser Producers and Suppliers of Nigeria (FEPSAN) and OCP, Morocco’s state-owned company and global leader in phosphate and its derivatives.
The gradual, but steady revolution in the nation’s fertiliser blending industry following the deal, raised hopes of restoring Nigeria’s position as the food basket of the West African sub-region. This was because it reduced farmers’ overheads, boosted yield and encouraged more players to invest in the agric value chain.
To consolidate on the gains of the PFI and, ultimately, achieve self-sufficiency in fertiliser production, the Federal Government, through the Central Bank of Nigeria (CBN) also barred official foreign exchange (forex) allocation to fertiliser imports. The inclusion of fertiliser on the list of items not valid for forex took effect from Friday, December 7, last year.
A reliable source close to FEPSAN told The Nation that the ban on the importation of fertiliser has started manifesting in the form of increased inflow of investments into the agric sector, massive job creation and conservation of foreign exchange.
For instance, the fertiliser sector, according to the source, who declined to be mentioned, churned out over 100, 000 jobs in 2018 alone. The size of investment in urea production also swelled to over $9 billion, with Dangote Fertiliser and Indorama Eleme Petrochemicals Limited in Port Harcourt, the Rivers State capital, exporting about 800, 000 metric tons of urea.
He also said under the PFI, Nigeria recorded the highest fertiliser consumption figure ever. “In 2017, our local consumption was 1.56 million tonnes of fertiliser. In 2018, Nigeria recorded 1.4 million tones. The highest consumption we had previously was 1.2 million tones, and that was in 2014,” the source told The Nation.
He also pointed out that as a result of the increased capacity of local producers, NPK fertilisers are now available to farmers at affordable rates of about N5, 500 per bag, adding that “the icing on the cake” for farmers was the blending of soil-specific and crop-specific fertiliser.
However, the scarcity and high cost of fertiliser may havedeflated members of FEPSAN, farmers and indeed, the authorities and industry stakeholders. Many of them now fear that the gains of the agric revolution, especially the fertiliser segment, may be reversed, with Nigeria’s hope of reclaiming her position as the sub-region’s food basket hanging in the balance.
Rising food prices justify fears
So far, the Boko Haram insurgency is limited to the Northeast region. But, like wildfire, the ripple effects of the activities of the dreaded group have spread to all parts of the country, resulting in acute shortage of food items and, of course, increase in the price of available supply.
Professor of Plant Protection and Improvement, Department of Crop Science & Biotechnology, Imo State University, Owerri, Onuh Martin, put the situation in perspective when he said the pervasive insecurity foisted on the country by insurgency and other criminalities have driven most farmers away from their farms.
Today, few farmers have the courage to go to their farms, as fear of recurring herdsmen/farmer clashes, kidnappings, rape and armed robbery, among others, have become the beginning of wisdom.
The result, predictably, has been low agricultural production, and of course, increase in prices of the few items that manage to get to the markets.
Indeed, in the last few weeks, prices of most staple food items have gone up, raising fears that these staples may soon disappear from the menu tables of many Nigerians who may no longer afford them. Some of the staples affected include rice, beans, garri, semovita, tomato, pepper, and frozen foods, among others.
The Nation’s random checks in some major markets in Lagos, showed, for instance, that a bag of 50 kilogrammes of foreign rice, which hitherto sold for between N13, 300 and N13, 800, has gone up to as much as N16, 000.
Prices of other food items such as yam, beans, tomato, onion and pepper, as well as frozen foods such as Turkey and chicken, have also gone up.While some experts blame this on seasonal shortage in supply, the displacement of most farmers across the country by rising insecurity is also a major factor.
Is food security threatened?
The Country Manager, OCP Africa, Caleb Usoh, emphasised that in addition to input, such as better seed, and farming practices, fertiliser could be a game changer in food security among smallholder farmers battling falling harvests and unproductive soils.
Usoh, who spoke at the recently-concluded African Farming Second Edition Agribusiness Summit in Abuja, urged the government to pay attention to the fertiliser industry because the future growth of agriculture lay in efficient utilisation of plant nutrients.
According to him, OCP has been playing a major part in assisting Nigeria and other African countries to feed themselves by ensuring that smallholder farmers are able to use fertiliser optimally to boost their yields.
Noting that improved access to fertiliser is key to food security, Usoh said by using more fertiliser correctly, farmers could grow more nutritious food, achieve household food security, create jobs, increase incomes and boost rural development.
Impliedly, the high cost of this critical farming input, could impinge on Nigeria’s quest to achieve food security, if urgent steps are not taken to rein in insurgents and other criminal activities hurting food production.
This is so considering the fact that most of the food items such as yam, beans, tomato, onion and pepper come from the north, where insurgency and other shades of criminality are evidently more pronounced.
AfDB, AFAP $5.4m grant to the rescue
The African Development Bank (AfDB) and the African Fertiliser and Agribusiness Partnership (AFAP), last week, signed two grant agreements to implement trade credit guarantees worth $5.4 million to support fertiliser value chains in Nigeria and Tanzania.
Both parties signed the grant agreements, which hold the potential to benefit hundreds of thousands of smallholder farmers, at the African Green Revolution Forum in Accra, Ghana on September 5, this year.
AfDB Vice President for Agriculture, Human and Social Development, Dr. Jennifer Blanke, said the agreements would provide the input needed for Africa to have “the productivity that we hope for”.
“We are just thrilled to be getting together with our partners in order to expand the efforts to make sure that we are financing the development of manufacturing and blending of fertiliser,” Blanke said. “This is an African effort, led by Africans, for Africa,” she added.
The grants are designed by the Bank’s Africa Fertiliser Financing Mechanism (AFFM) to provide sustainable financing solutions to boost the fertiliser value chain in Africa.
AFAP CEO Jason Scarpone signed the agreements on behalf of the continental body, emphasising the importance of value chain financing – bringing fertiliser financing from manufacturer, to distributor, to retailer to farmer. “Few succeed in doing it. This project will be successful,” he said.
The two deals are the first agreements signed by AFFM, which is hosted by the AfDB, since it became fully functional last year; they pave the way for the first implementation of trade credit guarantee projects for fertiliser financing led by AFFM in Nigeria and Tanzania. The AFAP will be the implementing partner operating in the two countries on behalf of the AFFM. The Partnership has substantial experience in supporting the agricultural value chain across the continent.
Scheduled for implementation over a two-year period, the projects will lead to the enhancement of fertiliser value chains in the two countries. The Nation learnt that the project will target 10 importers, five blenders/manufacturers, and 37 hub agro-dealers as direct beneficiaries, 520 retail agro-dealers as indirect beneficiaries and 700,000 smallholder farmers as final beneficiaries.
It remains to be seen how Nigeria plans to leverage on this fresh window of opportunity to make fertliser affordable to farmers and by so doing, consolidate on the gains of the agric revolution while starve off an impending food crisis.